The Baltimore Business Journal is reporting that life sciences companies spent a record amount on lobbying efforts in 2007–some 32 percent more in 2007 than in 2006.

The Baltimore Business Journal reported:

The industry unleashed a $168 million lobbying effort last year, the largest among all sectors and 90 percent of which was dominated by three biotech and pharmaceutical trade groups and 40 global companies. . . . Among top company spenders were British-based AstraZeneca PLC, which owns Gaithersburg-based MedImmune and tallied $4.1 million in lobbying efforts, and Israel-based Teva Pharmaceuticals, which owns Rockville-based CoGenesys and tallied $2.3 million. Amgen Inc., based in Thousand Oaks, Calif., topped the company list with a $16.3 million total contribution last year.

As the California Biotech Law Blog previously reported, BIO spent $6.6 million in lobbying efforts in 2007.

According to The Baltimore Business Journal, the industry’s investment seems to “have paid off.”

Was the investment really dollars well spent?  Well, clearly the industry has had some success with respect to delaying the passage of patent reform legislation, which was largely viewed as being more favorable to high tech companies than biotech companies.  Likewise, the lobbying efforts seem to have had some success in the SBIR area, as we previously reported in a recent blog posting.  So, the industry has definitely seen some success in Washington this past year, although that success has not been felt uniformly across the board.

There is no doubt that having a voice in Washington is taking on increasing importance for the life sciences industry, particularly in light of the lobbying efforts of the technology world.  It seems likely that the industry’s investment in lobbying will continue to grow in the near future, as the topic of health care reform continues to be a key political issue and the interests of technology and life sciences companies continue to diverge.  As I’ve suggested before, however, it is rather stunning to consider how much money that has to be invested these days in order to maintain a presence in Washington politics: $168 million is certainly not pocket change.

Wired.com is reporting that three DNA testing companies are pulling out of the California direct-to-consumer market, as a result of California’s recent action to send cease and desist letters to thirteen DNA genetics testing companies (See our recent  blog posting).

Alexis Madrigal for Wired.com reported yesterday that HairDx decided “on advice of legal counsel, to require California (and New York) residents to order their tests through a doctor.”  Then today, Madrigal reported that two additional genetics companies, Sciona and SeqWright, have decided to pull out of the California market.  According to Madrigal, SeqWright “ceased allowing tests from the state without even getting rapped by regulators.”

Will other DNA testing companies soon follow suit? It seems that the State of California’s actions may very well prove to have had a chiling effect over the whole DNA direct-to-consumer industry.  As Madrigal in his Wired.com column suggests, this may have very well been the intended result.

At least one company, however, may be prepared to take this fight to the next level.  Madrigal reported today that 23andMe seems to be standing its ground.  The company appears to be taking the position that it is in compliance with California law and is going to continue to sell in California at this time.  There is no word yet as to whether any other DNA testing companies are prepared to stand up to the state and challenge its regulatory actions.

It’s hard to see how these developments are good for the State of California.  One would have expected that a state as proactive as California with respect to promoting biotechnology and stem cell research would not have taken such a hard stance against direct-to-consumer DNA testing.  Will this incident ultimately prove to be the nail in the coffin for DNA testing services?  Certainly, California’s actions have the potential to initiate a wave of similar actions across the country, as other states may feel pressured to follow California’s lead.

The California Biotech Law Blog will continue to follow developments on this issue as they arise.

The fallout over California’s attempts to regulate genetic testing continued today as more facts over the California action came to light.

As the California Biotech Law Blog reported earlier this week , California’s Department of Health sent out cease and desist letters to thirteen genetic testing companies, including Navigenics, Inc. and 23andMe, Inc, demanding that these companies halt sales in the state until they can demonstrate that their laboratories are certified by the state and federal governments and that the tests have been ordered by a doctor as required by state law.

Wired.com is following the controversy, and has obtained copies of the letters that went out to at least two of the recipients.  Alleging that the companies violated California law, the letters cite eight statutory provisions of California’s Business and Professions Code in support of their allegations: Sections 1206(a)(4), 1220(d), 1241, 1246.5, 1265(a)(1), 1281, 1287(b)(3), 1288. 

These provisions state as follows:

• 1206(a)(4):"Clinical laboratory test or examination" means the detection,
  identification, measurement, evaluation, correlation, monitoring,
  and reporting of any particular analyte, entity, or substance within
  a biological specimen for the purpose of obtaining scientific data
  which may be used as an aid to ascertain the presence, progress, and
  source of a disease or physiological condition in a human being, or
  used as an aid in the prevention, prognosis, monitoring, or treatment
  of a physiological or pathological condition in a human being, or
  for the performance of nondiagnostic tests for assessing the health
  of an individual.

• 1220(d) (1) Each clinical laboratory shall perform all clinical
  laboratory tests or examinations classified as waived under CLIA in
  conformity with the manufacturer’s instructions.
     (2) Except for those clinical laboratories performing only tests
  or examinations classified as waived under CLIA, each clinical
  laboratory shall establish and maintain all of the following:
     (A) A patient test management system that meets the standards of
  CLIA in Subpart J (commencing with Section 493.1101) of Title 42 of
  the Code of Federal Regulations.
     (B) A quality control program that meets the requirements of CLIA
  in Subpart K (commencing with Section 493.1201) of Title 42 of the
  Code of Federal Regulations.
     (C) A comprehensive quality assurance program that meets the
  standards of CLIA in Subpart P (commencing with Section 493.1701) of
  Title 42 of the Code of Federal Regulations.

• 1241: This chapter applies to all clinical laboratories in
  California or receiving biological specimens originating in
  California for the purpose of performing a clinical laboratory test
  or examination, and to all persons performing clinical laboratory
  tests or examinations or engaging in clinical laboratory practice in
  California or on biological specimens originating in California,
  except as provided in subdivision (b).
     (b) This chapter shall not apply to any of the following clinical
  laboratories, or to persons performing clinical laboratory tests or
  examinations in any of the following clinical laboratories:
     (1) Those owned and operated by the United States of America, or
  any department, agency, or official thereof acting in his or her
  official capacity to the extent that the Secretary of the federal
  Department of Health and Human Services has modified the application
  of CLIA requirements to those laboratories.
     (2) Public health laboratories, as defined in Section 1206.
     (3) Those that perform clinical laboratory tests or examinations
  for forensic purposes only.
     (4) Those that perform clinical laboratory tests or examinations
  for research and teaching purposes only and do not report or use
  patient-specific results for the diagnosis, prevention, or treatment
  of any disease or impairment of, or for the assessment of the health
  of, an individual.
     (5) Those that perform clinical laboratory tests or examinations
  certified by the National Institutes on Drug Abuse only for those
  certified tests or examinations.  However, all other clinical
  laboratory tests or examinations conducted by the laboratory are
  subject to this chapter.
     (6) Those that register with the State Department of Health
  Services pursuant to subdivision (c) to perform blood glucose testing
  for the purposes of monitoring a minor child diagnosed with diabetes
    if the person performing the test has been entrusted with the care
  and control of the child by the child’s parent or legal guardian and
  provided that all of the following occur:
     (A) The blood glucose monitoring test is performed with a blood
  glucose monitoring instrument that has been approved by the federal
  Food and Drug Administration for sale over the counter to the public
  without a prescription.
     (B) The person has been provided written instructions by the child’
  s health care provider or an agent of the child’s health care
  provider in accordance with the manufacturer’s instructions on the
  proper use of the monitoring instrument and the handling of any
  lancets, test strips, cotton balls, or other items used during the
  process of conducting a blood glucose test.
     (C) The person, receiving written authorization from the minor’s
  parent or legal guardian, complies with written instructions from the
  child’s health care provider, or an agent of the child’s health care
  provider, regarding the performance of the test and the operation of
  the blood glucose monitoring instrument, including how to determine
  if the results are within the normal or therapeutic range for the
  child, and any restriction on activities or diet that may be
  necessary.
     (D) The person complies with specific written instructions from
  the child’s health care provider or an agent of the child’s health
  care provider regarding the identification of symptoms of
  hypoglycemia or hyperglycemia, and actions to be taken when results
  are not within the normal or therapeutic range for the child.  The
  instructions shall also contain the telephone number of the child’s
  health care provider and the telephone number of the child’s parent
  or legal guardian.
     (E) The person records the results of the blood glucose tests and
  provides them to the child’s parent or legal guardian on a daily
  basis.
     (F) The person complies with universal precautions when performing
  the testing and posts a list of the universal precautions in a
  prominent place within the proximity where the test is conducted.
     (7) Those individuals who perform clinical laboratory tests or
  examinations, approved by the federal Food and Drug Administration
  for  sale to the public without a prescription in the form of an
  over-the-counter test kit, on their own bodies or on their minor
  children or legal wards.
     (8) Those certified emergency medical technicians and licensed
  paramedics providing basic life support services or advanced life
  support services as defined in Section 1797.52 of the Health and
  Safety Code who perform only blood glucose tests that are classified
  as waived clinical laboratory tests under CLIA, if the provider of
  those services obtains a valid certificate of waiver and complies
  with all other requirements for the performance of waived clinical
  laboratory tests under applicable federal regulations.
     (c) Any place where blood glucose testing is performed pursuant to
  paragraph (6) of subdivision (b) shall register by notifying the
  State Department of Health Services in writing no later than 30 days
  after testing has commenced.  Registrants pursuant to this
  subdivision shall not be required to pay any registration or renewal
  fees nor shall they be subject to routine inspection by the State
  Department of Health Services.

• 1246.5: Notwithstanding any other provision of law, any person may
  request, and any licensed clinical laboratory or public health
  laboratory may perform, the laboratory tests specified in this
  section.  A registered clinical laboratory may perform the laboratory
  tests specified in this section if the test is subject to a
  certificate of waiver under CLIA and the laboratory has registered
  with the department under paragraph (2) of subdivision (a) of Section
  1265. A program for nondiagnostic general health assessment that
  includes a laboratory test specified in this section shall comply
  with the provisions of Section 1244.  The results from any test may
  be provided directly to the person requesting the test if the test is
  on or for his or her own body.  These test results shall be provided
  in a manner that presents clear information and that identifies
  results indicating the need for referral to a physician and surgeon.

     The tests that may be conducted pursuant to this section are:
  pregnancy, glucose level, cholesterol, occult blood, and any other
  test for which there is a test for a particular analyte approved by
  the federal Food and Drug Administration for sale to the public
  without a prescription in the form of an over-the-counter test kit.
  A test approved only as an over-the-counter collection device may not
  be conducted pursuant to this section.

• 1265(a)(1):A clinical laboratory performing clinical laboratory
  tests or examinations classified as of moderate or of high complexity
  under CLIA shall obtain a clinical laboratory license pursuant to
  this chapter.  The department shall issue a clinical laboratory
  license to any person who has applied for the license on forms
  provided by the department and who is found to be in compliance with
  this chapter and the regulations pertaining thereto.  No clinical
  laboratory license shall be issued by the department unless the
  clinical laboratory and its personnel meet the CLIA requirements for
  laboratories performing tests or examinations classified as of
  moderate or high complexity, or both.

• 1281:It is unlawful for any person to own, operate, maintain,
  direct, or engage in the business of operating a clinical laboratory,
  as defined in this chapter, unless he or she possesses a valid
  clinical laboratory license issued by the department.  In the event a
  health facility does not perform clinical laboratory services, but
  provides laboratory services to its patients under an agreement with
  another person or entity that holds and is operating under a valid
  clinical laboratory license, the health facility shall not be
  required to obtain a clinical laboratory license.

• 1287(b)(3):  The enforcement remedies provided under this section are not
  exclusive, and shall not preclude the use of any other criminal or
  civil remedy.  However, an act or omission punishable in different
  ways by this section and any other provision of law shall not be
  punished under more than one provision.  Under those circumstances,
  the penalty to be imposed shall be determined as set forth in Section
  654 of the Penal Code.

• 1288:Any person conducting or operating a clinical laboratory may
  accept assignments for tests only from and make reports only to
  persons licensed under the provisions of law relating to the healing
  arts or their representatives.  This section does not prohibit the
  acceptance of evaluation specimens for proficiency testing or
  referral of specimens or such assignment from one clinical laboratory
  to another clinical laboratory, either licensed or exempt under this
  chapter, providing the report indicates clearly the laboratory
  performing the test.  A report of results issuing from a clinical
  laboratory shall show clearly the name and address of the laboratory
  and the name of the director.

The letters demand that the party submit a plan before June 23, 2008 advising how the company will prevent further violation of the law.

It is impossible to determine from these letters whether or not these companies actually are in violation of the law;  however, assuming the allegations are in fact accurate, is this really the whole story?  Or is something else actually responsible for this "attack" on genetic testing companies?  What is prompting this interest in genetic testing?

I cannot help but wonder if the medical community is at the heart of this controversy.  But if this is in fact the case, what is the issue?  Is there a concern by doctors that they are going to be found guilty of malpractice simply as a result of something they either overlook or do not know how to respond to in the genetic testing report?  As we suggested in our previous blog posting, there is certainly some debate as to how accurate various genetic tests actually are and what, if anything, should be done in response to certain results.  On the other hand, is there a fear by the medical community that the public will not know how to handle the data in the report?  Or is there at the heart of this issue an entirely different matter entirely?

It is interestng that in the same week that this controversy has erupted, Newsweek ran a story about Dean Ornish’s new book, where he looks at how changing lifestyle can change genes.  The prospect of potentially changing your genetic predisposition by making lifestyle changes is perhaps the best argument for why the public should have direct access to these tests.  Thomas Goetz of Wired.com also makes a compelling argument for direct access, arguing that "Frankly, it’s insulting and a curtailment of my rights to put a gatekeeper between me and my DNA." 

To date, this controversy has erupted in only two states: New York and California.  There are forty-eight other states yet to take this issue up.  Those states will be looking to New York and California to see how they deal with the controversy.  Perhaps the California legislature should jump to the forefront of this issue and look at changing the law to ensure direct public access to genetic testing.  Such an action would undoubtedly set an important precedent for the other forty-nine states, which might very well follow in California’s footsteps.  California: will you rise to the challenge? 

The California Biotech Law Blog will continue following this controversy as it further unfolds.

California’s Department of Health has taken a first step towards regulating genetic testing companies by sending out cease and desist letters demanding that they halt sales in state until they comply with quality and reliabilty standards, reported SF Gate. 

According to SF Gate, thirteen companies received the letters, including the two most visible genetic testing companies, Navigenics INc. and 23andMe Inc.

SF Gate reported:

All the companies have two weeks to demonstrate to regulators that their laboratories are certified by the state and federal governments, said department [of health] spokeswoman Lea Brooks. They must also show that the tests currently being sold to California residents have been ordered by a doctor as required by state law. . . . Companies face fines of up to $3,000 a day if they don’t comply.

The California action follows a similar action taken by the New York Department of Health earlier this year, as we discussed in our May 14th blog posting.

Having just spoken last week at the Beyond Genome Conference in San Francisco, where we were discussing the ins and outs of the recent advances in genetic testing , I was a bit surprised to read that California–given our robust biotech industry–was following in New York’s footsteps on this issue.  Moreover, I was surprised to discover that there is a state law in California requiring that genetic tests be ordered by a physician.

While perhaps it makes some sense to require the laboratories of these companies to be certified by the state and federal governments (although I confess that I do not know what is involved in the certification process), does it really make sense to require that all genetic testing be initiated by a doctor’s order?  Is this really good public policy? 

As I indicated in my prior posting on this issue, I personally would be rather reluctant to pursue genetic testing even if I was interested in the results simply because I would not want the results to get into the hands of the insurance companies.  Requiring that no testing can be pursued without a doctor’s order makes it virtually impossible to run the tests without the insurance companies obtaining copies of the results.  According to Ryan Phelan, the CEO and Founder of DNA Direct, who also spoke at the Beyond Genome Conference last week, genetic test results are not even considered uniformly reliable across the board; some tests are viewed as being more reliable than others.  Would this be understood, however, by the insurance companies evaluating the results?  I personally would not be willing to take that risk.  Then again, as I have shared with blog readers previously, I have had first-hand experience with the challenges that can be encountered with obtaining health insurance even when young and in relatively good health, as my COBRA insurance was terminated six months after my previous employer closed its doors and I was forced to go out and look for insurance on the open market before I had "exhausted" my COBRA under state law.  Based on my experience, it is not inconceivable to think that an insurer would label you "uninsurable" solely on the basis of your genetic testing results. 

In evaluating the debate over genetic testing, I cannot help but  wonder what is at the crux of the fears over confidential genetic testing.   Is the medical community concerned that a public that already has access to HIV and pregnancy testing over-the-counter somehow cannot handle genetic testing results?  Is there a concern about protecting the public from reliability issues arising from some of the genetic tests?  Is there a worry about what the public will do with the information, or what the public will expect physicians to do with the information? Or is something else entirely at the heart of these concerns?

I’m interested to hear any commentary on the genetic testing debate: should there be laws in place to require physicians to be involved with genetic testing, or to order the tests?  Would you be deterred from pursuing testing because of a physician’s involvement?  Do the laws need to be changed so that states cannot in essence "shut down" genetic testing start-ups that are emerging in the marketplace? 

The California Biotech Law Blog will continue to follow this issue as it unfolds, and we will keep you posted on any feedback we receive on the issue.