The Business Effects of Regulatory Uncertainty in Genetic Testing
The business of genetic testing has progressed rapidly, if unevenly, over the past several years. Like any business based on new and rapidly developing science, the promise of new products and markets is counter-balanced by the obstacles of developing commercial products from raw science, fostering markets for those products, constructing profitable business models and overcoming novel legal and regulatory hurdles.
The Regulatory Environment Turns Negative. Until May 2010, the regulatory challenges in the genetic testing world seemed relatively benign, with most attention focused on patent and related IP issues (e.g. the Myriad gene patent litigation) and a challenging economic climate which made commercial operations and capital raising difficult for most businesses.
The Unexpected Impact of Genetics on the Business World
Recent advances in genetic science are remarkable. In 2003 the first full human genome was sequenced after 13 years of work at a cost of over $3 billion. Today, the cost to sequence any individual’s entire genome is approaching $1,000. Genetic tests for specific genes linked to cancer and other diseases exist today and many more are being developed. We hear of a new era of “personalized medicine” in which drugs and therapies will be prescribed based on the individual patient’s specific genes.
All of this may seem to have little direct relevance to companies outside of biotechnology. However, the development of genetic knowledge and technology already has spawned new laws, regulations and patent uncertainties that impact almost all businesses in some way.
Privacy and Nondiscrimination. The federal Genetic Information Nondiscrimination Act of 2008 (GINA) represents the most comprehensive effort to date to regulate the use of genetic information. GINA initially only prohibited health insurers and group health plans from using genetic information to deny coverage or set payment rates. Another section, which just became effective in November 2009, affects all private and public employers with more than 15 employees.
