Will Funding Break Through the Bioinformatics Bottleneck?
Earlier this month, the NIH announced the renewal of a grant program that awards up to $275,000 over two years to academic institutes, small businesses, non-profits and other groups, to support research aimed at developing new ways of managing, manipulating and interpreting genomic and other biological data. But the utility and necessity of such grants is not entirely clear.
To be sure, the biomedical community has recognized a potential for a “bioinformatics bottleneck” as the cost of genome sequencing plummets and the sheer quantity of raw data rises, potentially without a corresponding increase in the capacity to interpret that data. And the NIH’s focus on funding innovative, “high risk/high impact” research projects is certainly welcome. But it is far from clear that a handful of two-year, $275,000 grants will produce the right type of innovation, on the right time-scale, to put a dent in the problem. And perhaps more to the point, it is worth taking a closer look at whether any amount of public funding would address some of the other issues at the root of the impending shortfall in biomedical informatics and computational biology research and development.
It is nearly tautological to point out that excess demand for biomedical services, including genomic or genetic interpretation, will be the very cause of any bottleneck. There also appears to be no dispute that those demanding genomic data are willing to pay for it, as evidenced by the expansion of the DTC genomics market, including the recent entry of sequencing giant Illumina and start-up Pathway Genomics. As more discoveries about the significance of one gene or another emerge, consumers’ interest in having genomic data interpreted is only expected to grow. Indeed, as we’ve discussed, this very potential in the interpretation market (at least in the DTC space) has led at least one genomics-watcher (Daniel MacArthur of Genetic Future) to question the wisdom of Illumina’s decision to limit their DTC services to providing genomic raw data and leave the interpretation of it to others.
But it is unusual for smart people who run smart companies to make economically questionable decisions. So, why might Illumina have decided to forego (at least for now) the part of the genomics business that promises to bring repeat customers and the opportunity to compete on the more subjective playing field of data interpretation? The arena it has chosen—that of merely generating the genomic data—requires competition on much more objective metrics: For now, a genome is a genome, and today’s fastest, cheapest and most accurate producer of genomic data is tomorrow’s dinosaur. The competition is fierce and there must be at least some doubt as to how long Illumina, or any company, can continue to maintain its edge—particularly while fighting off patent lawsuits.
Maybe Illumina (and who knows how many other existing companies or would-be entrepreneurs) simply don’t perceive the personal genomics segment of the bioinformatics market as a particularly lucrative one. But as a lawyer, I fall victim to the occupational hazard of frequently suspecting that regulatory costs are at least partially to blame for the reluctance, if it is that, of companies to enter a market facing the promise of excess demand.
In our own genomics practice, we have found that the uncertainty regarding future regulation and the existing web of conflicting regulation play a significant role in shaping our clients’ strategic decisions about how to grow their business. And it should. Although, of course, a number of companies have entered the DTC genomics market despite the current regulatory environment, those companies face an ever-changing and tangled web of regulatory oversight—both foreign and domestic (pdf)—the moment they provide bioinformatics services to consumers or patients. Perhaps even more unsettling than the existing regulatory environment is the proliferation of hand-wringing over the possible (though as-yet unsubstantiated) dangers of DTC testing, which has fueled a trend of proposing or threatening onerous legislative and regulatory measures. Just last year, a number of DTC genetic testing companies were sent “cease and desist” letters from California regulators and letters threatening fines and jail time from New York’s Department of Health, with both of those states alleging non-compliance with regulations that were not specific to genetic testing. The companies argued they complied with all relevant laws, but in the words of Illumina CEO Jay Flatley, the regulatory environment for “this consumer stuff” is “tricky.” As we have also discussed, although there is no regulation (yet) specifically governing the advertising of DTC testing services, the FTC has sent warning signals (pdf) that it is disagrees with many of the claims made by DTC test companies. It is therefore little wonder that 23andMe took it upon itself to draft a bill that would regulate the DTC industry, particularly bioinformatics, in California; or that the Personalized Medicine Coalition has proposed Industry Standards (pdf) with respect to the scientific validity of genetic tests.
Although the NIH grant program serves an important research purpose, addressing the bioinformatics bottleneck will require more than granting relatively small amounts of money to a marketplace facing more demand than it can meet. Perhaps the larger problem is (1) the patchwork of existing regulation that frequently does not fit well into the genomics space; coupled with (2) the threat of legislation or regulation driven by speculation, rather than facts, about the dangers of DTC testing, and without adequate thought given to what an appropriate regulatory regime might entail. The Genomics Law Report has grappled with this latter issue already, frequently urging caution before rushing forward with new regulatory action. The bioinformatics bottleneck is yet another good reason for legislators to demand that those urging quick, severe regulation firmly support their claims that such regulation is truly and urgently necessary. If, on the other hand, regulation means the cool-headed application of a clear set of appropriate rules, the DTC genetic test industry might find it economically advantageous to welcome such direction.