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Common Responses to Why DTC Genomics is Dead: Coriell PMC

August 27th, 2008 by Andrew Yates

First, thanks for the great comments about my Coriell PMC post yesterday.

“To use the Coriell service you have to actually walk in the door. If you’re not in the neighbourhood then it may be easier and cheaper to use 23andMe.”

Right, but that’s because Coriell have no incentive to rush to seize a market. Coriell could mail their saliva oragene collection kits and probably, eventually will. Remember, Coriell is an international biobank. It’s their business to send and receive biological samples by mail.They don’t because requiring participants to physically visit their office carefully limits the scale of their program. Coriell will probably be forced to send kits by mail to achieve their goal of 100,000 participants.

Further, for the $2500 cost of a Navigenics test, a better, free, declaratively medical test from Coriell is worth the daytrip and flight for the majority of people. The same is true for a $1000 23andMe or deCODEme test. Come on, this isn’t some fire sale at some outlet store in Kansas, this is an expensive medical test.

“Coriell will not give you access to your raw data, only their interpretation of items that they consider ‘medically actionable.’”

So? I don’t get back the raw data of any other medical tests I take. If you just want a SNP sample of your genome because it’s cool, go buy a 23andMe or deCODEme test. That’s like getting an x-ray because you “want to see what your bones look like.” OK, some people may want to do this… and hey, I bought a 23andMe test for this reason… but most people aren’t choosing their x-ray test provider based on whether they get to keep their x-rays.

“The author is naive if he thinks that this initiative is going to wipe out all the for-profit ventures in this arena.”

No, of course DTC genomic companies aren’t going to be immediately wiped out. People will continue to buy DTC genomic tests, and most of the fly-by-night competitors have already been swept away by regulatory scares.

The problem is that DTC genomic companies aren’t profitable. They are investment-funded companies. (deCODE is a public company, but it too has never been profitable and operates by spending investment.) To raise additional capital to continue operation, these companies must convince investors that they will earn a return on their investment. However, given the Coriell PMC, investors must be convinced despite that

  • The current market price of a genomic test has dropped from $1000 to $0 for the first 100,000 customers.
  • The government has proved that will fund competing efforts to offer the same services and perform the same research. These efforts will use superior, better established institutional resources and have no obligation to return capital.
  • (BIGGEST) The existing medical research establishment has proved that it will conduct its own genomic services and research rather than work with venture-funded startups like Navigenics.

Especially for Navigenics, the idea is that these tests will eventually be medical information to be used by doctors and purchased by pharama companies. That is the investment. Unfortunately, the Coriell PMC is a political statement that clearly states: “No, we don’t want or need your company. We will provide these ourselves, we will undermine the market for your genomic data by conducting the same research better than you can, and we’re not going to help you.” This is FAR worse than the former two points because it extends to hypothetical genomic products like sequencing, not just SNP set tests. Otherwise, one could make a credible argument that the Coriell PMC will prime the genomic testing market with government money, and once the project concludes, a company like Navigenics would be ideally suited to serve that market (assuming it was well-enough funded to weather the government-sponsored “free trial.”)

“Actually, GINA says that insurers/employers cannot request or require that you take a genetic test. So discrimination based on *not* having a test is still illegal.”

This merits its own post (coming)…

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