23andMe: An Evolution Post-2015 FDA Ruling

Since its establishment, the direct-to-consumer genetic testing company, 23andMe, has taken the world by storm with its innovative approach to genetic ancestry, health risk assessments, and personal genetic insights. However, in late 2015, the company faced a significant regulatory challenge from the Food and Drug Administration (FDA). While it seemed like a major setback, the outcome was far from the end of the journey for 23andMe.

The FDA Ruling and Its Impact

The FDA did not 'kill' 23andMe's business model altogether. Instead, it issued a directive that halted the company from displaying one key component of the genetic data analysis: disease risk profiles. For users who had already undergone the testing, the company's website featured a comprehensive risk assessment for various diseases. For example, my test indicated a 25% risk of prostate cancer, significantly higher than the general population's 17.8% risk.

While the FDA acknowledged that the public might take these risk profiles at face value and potentially make hasty decisions without medical advice, it did not view the ancestry testing or familial line information analysis as high-risk activities. Consequently, 23andMe continued to offer these services, including ancestry reports, relative searches, and insights into maternal and paternal lines, all under the supervision of healthcare professionals.

Post-Ruling Compliance and Recovery

Following the FDA's ruling, 23andMe diligently worked to comply with the necessary regulations and restructured its offerings to align with the guidelines. This involved a revamp of the company's services to ensure that any genetic risk information provided would require proper interpretation by a medical professional. As a result, 23andMe reintroduced health risk assessments, albeit in a modified and more controlled manner. The company now emphasizes the importance of consulting a doctor before taking significant health-related actions based on genetic test results.

The Business Model Beyond Genetic Data

The business model of running 99 genetic tests for individuals may not be particularly lucrative on its own. However, 23andMe recognizes the potential to leverage the vast pool of genetic information to advance the field of precision medicine. By allowing researchers and pharmaceutical companies access to this information, 23andMe could play a pivotal role in developing more targeted and effective treatments for various diseases. Moreover, as with any tech company, the primary revenue stream often lies in the data itself.

Similar to Facebook, who monetizes its user base through targeted advertising, 23andMe could use the anonymized genetic information of its millions of users to identify genetic markers associated with particular traits or conditions. This data can then be sold or licensed to biotech and pharmaceutical companies, enabling them to create more personalized and effective drugs. While 23andMe is not explicitly stated to engage in this practice, the potential benefits are considerable, as it could significantly expand the company's revenue streams beyond genotyping tests.

Conclusion

The story of 23andMe in late 2015 is not one of failure but of adaptation. The company overcame the initial regulatory hurdles and has since evolved into a more comprehensive genetic testing service. With a renewed focus on compliance, 23andMe continues to provide valuable insights into genetic ancestry and risks, while exploring innovative ways to monetize the vast data it collects.