Personalized Medicine Watch
By John Russell

Sept. 16, 2008 | Last week 23andMe slashed the price of its genotyping service from $999 to $399. Good news, you say, and likely to help jump start the mass market for consumer genomics.

Maybe. But maybe not. Writer David Hamilton makes just the opposite case in a posting: 23andMe’s Price Cut: The End of Commercial Personal Genomics?

Hamilton agrees that prices from competing services may also plummet. But he argues the basic business model of the new crop of consumer genomics companies isn’t to sell DNA genotyping to consumers; it’s to sell access to the vast amounts of genomic data they expect to accumulate to the biomedical research and healthcare industries. The consumer services, he says, are basically loss-leader activities.

The fly in the ointment is that declining sequencing costs and an effort by non-profit academic medical institutions build their data banks will undercut commercial providers like 23andMe by soon providing access to data essentially for free. Moreover, their data is likely to be better curated, says Hamilton, since the non-profits will embrace the open source/access approach which mobilizes the mass of academic researchers. He argues this is what happened to Celera et al. in trying to build a business around selling access to genomic data.

Not everyone agrees. I think he’s right and wrong. The size of the consumer market is very large, and commercial services with easy-to-use interfaces may well be able to survive, but Hamilton may be right about the 23andMe crowd not succeeding in becoming the preferred supplier of genetic and genomic data to the professional biomedical community (pharma, physicians, payors). His point of view is worth reading.

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