- California lawmakers passed a law that gives consumers more agency over the data they pass along to genetic testing firms.
- Boosted transparency and trust could translate into more D2C sales, despite the patchworked legal landscape.
California lawmakers passed a law that allows consumers to revoke consent for genetic testing companies like 23andMe and Ancestry to use their data, mandating the companies to destroy the DNA samples within 30 days, STAT reported in its weekly newsletter.
California law boosts genetic data privacy.
Business Insider Intelligence
For context, direct-to-consumer (D2C) DNA testing firms often give customers the opportunity to opt into research by consenting to pass along their samples: For instance, 8 million of 23andMe’s network of 10 million users have opted in to participate in research. States are taking the helm at passing D2C genetic testing regulation, while federal lawmakers remain mum—creating a patchworked legal landscape for genetic testing companies to operate in.
Privacy laws have yet to be enacted on a federal level, so state lawmakers are stepping in: Florida recently passed legislation prohibiting insurance companies from accessing members’ genetic insights, which could impact the type and cost of coverage. But as states take charge putting forth their own laws, genetic testing companies will be faced with new obstacles, and it’s unclear how they’ll navigate adhering to the changing legal ecosystem.
In reference to the new law passed in California, Justin Yedor, a Los Angeles-based data privacy attorney, was cited in Bloomberg asking, “are (D2C companies) going to provide these rights strictly for Californians or are they going to extend them to all consumers regardless of jurisdiction?” Contending with new rules passed on a state-by-state basis could cause hangups in operations, exacerbating the already softening D2C genetic testing market.
While a hodgepodge of legislation across the US will be a hurdle, increased privacy laws could assuage consumers’ fears and translate into more sales. In a recent YourDNA survey, 40% of consumers who had never taken a DNA test cited privacy concerns as the driving reason for why they’ve shied away. But if companies are transparent about granting consumers more autonomy over their data and how it’s handled, they may be more likely to take the plunge.
Still, we think high-flying genetic testing firms will lean more heavily on their healthcare-focused initiatives as they navigate the shifting D2C realm: Some DNA testing firms like Color and YouScript—the latter of which is now owned by Invitae—are powering hospitals’ precision medicine initiatives, for example.
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