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Follow-Up to 23andMe’s Price Drop

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Yesterday I wrote about 23andMe’s decision to lower their price to $399 (down from $999) while adding more genealogically-relevant SNPs and partnering with Ancestry.com.  Although I don’t have any further information about the new SNPs, I’ve seen a couple of interesting articles about the price drop around the blogosphere.

Aaron Rowe at Wired science writes “Human Genetics is Now a Viable Hobby.”  He notes that the new price is “well within the reach of cash-strapped grad students, frugal genealogy buffs and other not-so-early adopters.”  The comment thread is an interesting read as well.

“Cheap as chips”

Daniel MacArthur of Genetic Future writes “Cheap as chips: 23andMe slashes the price of personal genomics” at his new scienceblogs location.  Daniel also notes that the updated product “will certainly be popular with genetic genealogists” because of the addition of Y-DNA and mtDNA SNPs, and agrees with my hypothesis that other companies will follow suit and lower their prices.  Daniel also mentions the Personalized Medicine Collaborative (PMC) at the Coriell Institute for Medical Research, which is offering free personal genome scans to 10,000 individuals this year.

The Death of DTC Genetics?

Andrew Yates at Think Gene has suggested that free testing by the PMC will kill Direct-to-Consumer (DTC) genetics.  However, as Ann Turner commented on his post, the PMC does not return raw data, only interpretation of items they consider “medically actionable.”  This is the exact reason why PMC will not kill all DTC testing.  I think Andrew fails to appreciate that this is not a new world of genetic testing; genetic genealogists have been doing this for over 8 years now, and all we care about is the raw data.  The more raw data, the better.  Thus, history suggest that at least to the early adopters, raw data is vital.  Andrew answers Ann’s concerns by saying:

“So? I don’t get back the raw data of any other medical tests I take. If you just want a SNP sample of your genome because it’s cool, go buy a 23andMe or deCODEme test. That’s like getting an x-ray because you “want to see what your bones look like.” OK, some people may want to do this… and hey, I bought a 23andMe test for this reason… but most people aren’t choosing their x-ray test provider based on whether they get to keep their x-rays. “

But genetic genealogists (and undoubtedly many others) DO chose their testing provider based on the results they receive.  Sure, we like to know which haplogroup we fit into, but ultimately the most useful aspect of genetic genealogy is the comparison of Y-STR numbers (i.e. the raw data).  And genetic genealogy is an enormous market that has yet to be completely tapped.

(The other problem with Andrew’s assertion is that interpretation of genetic information (unlike a broken bone in an x-ray) varies; a SNP might mean one thing to company A based on study X, while it means another to company B based on study Y.  And this is, of course, an unavoidable result of the current stage of genomic science.  But why should I rely on just one source to interpret my genetic data?  Why can’t I interpret it myself or allow another entity to interpret it?  This is why entities such as SNPedia have recently been created.  After all, to use an analogy, aren’t you supposed to get a second opinion from a different doctor?)

And last but certainly not least, David P. Hamilton at bnet writes “23andMe’s Price Cut: The End of Commerical Personal Genomics?“  David suggests that 23andMe’s price cut is “an attempt to jump-start the data collection in order to kick the real money engine [data mining a large database of genotype/phenotype information created by 23andMe] into gear.”  However, he notes that this is a problem because it is difficult to extract phenotypic information from users, and because scientists can now afford to do their own large-scale genomic studies as the result of lowering prices (and free tests via the PMC).

Blaine Bettinger

Intellectual property attorney, genealogist, and author of The Genetic Genealogist since 2007

12 Comments

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  2. Regarding “frugal genealogy buffs”, in 2nd paragraph, I believe the main reason most genealogists have NOT taken the plunge into DNA testing and Human Genetics is, in fact, the price (minimum ~ $100) for the initial analysis. It’s not like sampling a few genealogical computer software programs. Also, the lack of understanding of DNA Genealogy is directly proportional to the number of acronyms and jargon in this field. Keep it minimal.

    Robert C. Kramp’s last blog post..Kiepenkerl- Keepers of news and history

  3. Blaine, thanks for the link. The main issue here is that falling prices for genotyping will make more open-source data-collection projects possible, which by definition that undermines the core commercial model of startups like 23andMe. In other words, unless someone figures out how to make substantial money simply by offering genotyping plus analysis tools — which I’d guess is a low-margin business at best — these companies are going to have to retool radically or throw in the towel.

  4. Robert – great points. I think the $999 price point was keeping many genealogists away from the product, but I’m curious as to how a lower price will change that. Or if it SHOULD change it; is this product relevant enough to genetic genealogists?

    David – I agree that sequencing isn’t where the money will be in the future. I do wonder, however, if analysis is a poorly-performing business model as you suggest. I’ve often wondered if free analysis (such as SNPedia and PMC) will be able to replace paid analysis.

  5. Just a small caveat to the SNPedia reference as a free analysis. SNPedia doesn’t exactly offer a free analysis. You have to have the SNP data first from 23andme or deCode (so you’re out of pocket already). Then you use a nice piece of software called Promethease which will run an analysis of the raw data you’ve paid for against the SNPEdia data. I’ve posted my own SNP data and analysis on our blog at http://genomealberta.ca/blogs/main_08070801.aspx if you want to see what is produced and get the links to SNPedia and Promethease.

    As for the death of DTC I’m not so sure. If the prices across the companies comes to a point where more people can afford it there will be a growing market I think. Like many technologies there will be a segment of the population in search of a turnkey product from the sequencing to the analysis. Not everyone is prepared to take the raw data, run it through a 3rd party such a SNPedia, then wade through it all.

    Interestingly enough 23andme has also offered early adopters of their product a discount coupon for additional tests so you can get other members of your family tested for more like $200.00 which move it WAY down there. They will also be offering current customers an discount on ‘upgrading’ their initial analysis but they haven’t told us exactly what that means yet.

    Mike

  6. Mike – thank you for more clearly stating that point; I was operating under the assumption that eventually the sequencing will be incredibly cheap and easy (and therefore not profitable). Thus, at that point, you won’t be out the currently expensive sequencing costs. And you are absolutely right, many people won’t be interested in wading through the ‘free’ reports. However, if such a service is available, will it bring down prices all around?

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