Tuesday, February 17, 2009

Why 23andME? Why Now?

A few people have been asking me these questions after my recent blog post. Andrew and Daniel (Two prolific bloggers in the personalized genomics space) are both asking these questions and rightly so.

1) Why did 23andMe take such a risk? They had a nice Novelty genetic testing game working (albeit flawed). Why risk by going into truly defined medical practice?

I think this move rests on 3 assumptions

A) Most people won't buy a dunkin' donut's coffee today as they cut back costs. Why spend 399 on a vanity bobble?

Thus B

B) People pay for medical necessities still. So to sell tests, they can make it look like a medical need.

C) Most investors are looking to shorten their ROI time frame especially in this economy.

2) Why now? Why take the risk now? Aren't they risking their already set income stream by rocking the boat?

A) Have you seen the economy? The FDA isn't exactly priority number one in Washington now.

B) California is about to go bankrupt, I don't think CDPH will be focusing on these tests at this moment, leaving 23andME to force their way into medicine without being regulated.

C) If they don't make this move now, they may never have the chance again. Take a look, in 6 months the economy will be better. The FDA/CDC will have their joint Genomics department set up to police these measures AND WILL HAVE STIMULUS monies behind them to bring down the hammer...

So now is the perfect time to move...........The attention is on the Economy Stupid!!!!

The Sherpa Says: If the organized specialties such as ACMG, NSGC, ACP, CAP etc. move on this, they will be left with scratching their heads as to where their lab monies have gone? Let's face it, the clinical department is only kept around at these centers because of the profits which are brought in by the labs.....


Anonymous said...

The economy isn't the only reason. I will respond back in a couple of days....as I'm busy traveling out of state right now.


Steve Murphy MD said...

Still waiting ;)

Anonymous said...

Reasons? Competition! The direct to consumer companies are now in direct competition with each other. As one company drops their price for services, the others follow. As one company develops a test, the other companies develop (or steal) the same test or make minor versions of the same test.

If one company can show their testing for a specific condition is superior to the other companies, they will get more clients (for the consumers who actually do their homework) and the other companies will lose clients.

Why go medical? How can they not go medical? After all, every single A, T, G, C in our body, when mutated in some form (if their is a protein change), COULD lead to a health condition that needs treatment, etc.

Myriad Genetics is still the grandmother of all of these similar type of companies and will remain so.

23andMe has two choices: become a genetic testing company or become a research company that collects data and outsources the lab research (do they already do this?).

NONE of these DTC companies are going to be billion dollar companies if they require consumers to pay as much as a month's rent or a mortgage payment. That is reality! Therefore, offer a "medical test" and they can try to get new (and more) clients. Offer a specific test that only affects certain groups of our population and you have a target audience.

I'm just waiting for the first "smart" 23andMe consumer to sue 23andMe for providing medical tests when their terms of service says they do not. Heck, in a few weeks when I get my tax refund I might just order a test from this company to see what they really do there and ask a whole bunch of legality questions and see if they know what they are really doing (I will pull up the literature and cite the literature myself). I will first search for the most questionable test they offer and compare it to my own sequence that I can do at work for free (lol).