Health care disruptors must navigate treacherous regulatory waters

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Nov 27, 2013

This week 23andMe, a popular and well-funded genetic testing start-up, received a warning letter from the FDA indicating its product is being classified as a Class III medical device and therefore requires pre-market approval to legally market its product, a level of regulatory approval the letter indicates the company is reportedly nowhere near achieving. While I am admittedly not an expert on FDA rules and statues, requiring 23andMe’s genetic testing product to pass the same level of regulatory scrutiny as medical devices that are implanted in the human body to sustain life seems a bit extreme.

It is disappointing, though not surprising, to see a disruptive health technology struggle with regulatory and market access issues. This is particularly true for disruptive diagnostics, which must overcome a regulatory framework that is explicitly geared to prioritize only those diagnostics, devices, and therapies that are sustaining improvements to the best available solution.

In this case, the best available solution for genetic testing is a lab at an academic medical center filled with complex, expensive equipment and expert scientists to run and interpret the tests. This mode of genetic testing is neither affordable nor accessible to regular people. 23andMe is much more affordable and accessible, and though it may not achieve perfect precision nor provide a comprehensive mapping of the genome, it is good enough for the needs of average users.

So why is FDA so concerned about 23andMe? In its letter, FDA indicated their concern over “potential health consequences that could result from false positive or false negative assessments for high-risk indications… For instance, if the BRCA-related risk assessment for breast or ovarian cancer reports a false positive, it could lead a patient to undergo prophylactic surgery, chemoprevention, intensive screening, or other morbidity-inducing actions, while a false negative could result in a failure to recognize an actual risk that may exist.”

While false positives and negatives may be possible in 23andMe’s test, I am surprised at the lack of any mention of clinicians in the articulation of FDA’s concerns. I’m not aware of anyone obtaining a mastectomy or other similar procedures without it being ordered by a clinician. Indeed, 23andMe tests may induce patients to go to doctors requesting treatment they don’t need. While this may be annoying to clinicians, it does not rob them of their ability nor excuse them from their responsibility to have a reasonable conversation with patients and validate the 23andMe test results via more accurate means where necessary prior to ordering any treatment.

What can innovators learn from this situation? Here’s a few key lessons:

  1. Don’t ignore your regulator. Whether you agree with FDA’s action or not, if their letter is accurate, 23andMe has been unresponsive to FDA’s communications for nearly six months. This is never a good idea, for obvious reasons.
  2. Target regulatory white-space with your product and marketing. 23andMe would never have made it to market trying to prove it was better performing technology than the hulking academic medical center labs. Rather, it was successful in finding an interesting white space, but apparently didn’t engage with the regulator to define what would be acceptable in that space. The mobile health app ecosystem is an example of how to do this effectively, though it has taken over ten years to shape what ‘acceptable’ is in that space from a regulatory perspective.
  3. Deploy your technology in a business model that is not threatening to the status quo. 23andMe may have thought they did this in targeting consumers with no explicit clinical claims. However, once patients started acting on the content of the report, clinicians and regulators claimed concern over the validity of the tests. If 23andMe had just targeted family lineage claims, with health results sent to the doctor as a courtesy, we may not have seen a letter from FDA in this case.

Services like 23andMe are admittedly not as yet as good as comprehensive sophisticated tests in labs. Thankfully markets and regulators have allowed ‘good enough’ but imperfect innovations in nearly every industry historically (e.g., computing, tax accounting, air travel, automobiles, and personal communications). Here’s hoping ‘good enough but imperfect’ personal genetic information will continue to be affordable and accessible to patients in the future.