How Bad Can a House Investigation be for DTC Genomics?

Ok, so you've been summoned to Congress to testify

It won't be that bad if you know what you are in for. So let's review.

1. A chart listing the conditions, diseases, consumer drug responses, and adverse reactions for which you test;

2. All policy documents, training materials, or written guidance materials regarding genetic counseling and physician consultations, including documents regarding what conditions, diseases, drug responses, or adverse reactions trigger the need for genetic counseling or physician consultation, and documents governing communications with consumers regarding individual genetic testing results;

3. All documents relating to the ability of your genetic testing products to accurately identify consumer risk, including:

a. internal and external communications regarding the accuracy of your testing;

b. documents describing how your analysis of individual test results controls for scientific factors such as age, race, gender, and geographic location;

c. third party communications validating the association between the scientific data your company uses for analyzing test results and the consumer's risk for each condition, disease, drug response, or adverse reaction as identified by the results of an individual test; and

d. documents relating to proficiency testing conducted by your clinical laboratories.

4. All documents regarding your policies for processing and use of individual DNA samples collected from consumers, including:

a. policy documents and protocols regarding collection, storage, and processing of individual DNA samples;

b. policy documents and protocols relating to protection of consumer privacy; and

c. documents regarding collected DNA sample uses other than to provide individual genetic counseling to a consumer, including documents relating to third-party use of collected DNA samples.

5. All documents regarding compliance with the Federal Food, Drug, and Cosmetic Act and

U.S. Food and Drug Administration (FDA) regulations.

And you should have that to them in about 2 weeks.

What could be so harmful?

If you know anything about the history of such investigations, they are mostly a dog and pony show that ends up in one of a few options.

1. Public Pillorying that leads to a slap on the wrist and a consumer base who doesn't trust you anymore (See Toyota)

2. A massive class action lawsuit from some enterprising attorneys who review the publicly available documents that the House requests via Freedom of Information.

3. The Congress forces you to behave like normal society rather than a bunch of radicals trying to take over the world.

4. Some clone company sees all your internal documents via a Freedom of Information Act, copies the good, removes the bad and launches in like 6 months.......

5. Someone goes to jail, perp-walk style.

Since 5 is not realistic, I think we can expect some combination of 1-4 for these companies.

The worst outcome is probably Number One here.

The consumer base already doesn't trust Google/23andSerge

Navigenics already has a distribution network, but if the physicians don't trust the test, they won't order it.

Pathway will have a bump in the road and no retail launch.

Number 2 could hurt too, especially Ms Wojiciki who could get personally named in the suit as well as investors like Dyson.

If I was the lawyer, those are the deep pockets I would be after. Navigenics is owned by P&G now and their corporate counsel will likely shield them.

Pathway has probably the least customers to be exposed to such a lawsuit, unlike 23andSerge's 30k

Number 3 stinks for the "Research Revolution, Che Style" but probably won't hurt Navigenics or Pathway.

Number 4 is a definite reality. I have already heard that scuttlebutt on the street.

So, I ask. Is getting companies to behave responsibly and acknowledge that some of what they are doing is medical testing so bad? Ryan made the move. Very smartly Ms. Phelan. I knew she would.

The Sherpa Says: This certainly is a nice distraction from Tar Balls and Toyota...