Now For Sale at Fire Sale Prices: Thousands of People's Genomes

By Aline Reynolds | November 18, 2009 4:47 pm

dna-sequence-webDeCode Genetics, a genome sequencing and drug development company, found out the hard way that predicting disease risk simply by reading someone’s genes isn’t so straightforward. On Tuesday, deCode filed for chapter 11 bankruptcy protection in Delaware. The company’s financial problems have also raised some troubling questions about genetic privacy.

DeCode’s mission was to uncover genetic risk factors for common diseases and to develop personal genome scans so individuals could learn their risk. DeCode quickly became the leader in the worldwide race to identify the causes of common disease. The company’s researchers discovered mutations linked to schizophrenia, heart disease, diabetes, prostate cancer and many other illnesses. Its approach was to identify the mutations first in Icelanders and then to confirm them in other populations [The New York Times]. Iceland was seen as an ideal spot for genetic studies, because the population was fairly isolated and the country has excellent medical and genealogical records. However, the company’s early successes did not translate into dollars, in part because the mutations they found only account for a small percentage of the overall incidence of a given disease.

DeCode published high profile scientific research on the human genome, but the company has struggled to survive for the past year as it took too long to convert discoveries into marketable products and opportunities for raising cash faded with the global credit crunch [Bloomberg]. Last year, the company began offering personal genetic tests in which customers sent in cell samples swabbed from the insides of their cheeks and got back reports on their genetic vulnerability to certain diseases. Many experts have argued that such tests have little value.

Despite their scientific advancements, deCode has been a failure as a business, burning through $700 million and failing to generate a single quarterly profit. When deCode filed for chapter 11 bankruptcy protection, they listed estimated total assets in the range of $50 million to $100 million and estimated total liabilities in the range of $100 million to $500 million [Reuters]. Saga Investments LLC placed the first bid on deCode for near $14 million.

Saga could continue the human genome research if they so choose. However, some privacy advocates are already worrying about what will happen to the genetic profiles from all of deCode’s customers. A deCode executive said that Saga would be bound by a privacy policy that prevents disclosure of data to third parties such as insurers, employers or doctors…. [But] pooled and anonymised information, for example, could be sold to academic researchers or pharmaceutical companies [The Times].

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Image: iStockphoto

CATEGORIZED UNDER: Health & Medicine
  • http://www.patientprivacyrights.org Deborah C. Peel, MD

    Congress passed a ban on the sale of protected health information in the stimulus bill. The idea was to prevent sales of Americans’ sensitive health information by corporations, UNLESS they get our consent. The Coalition for Patient Privacy pushed for this consumer protection.

    So DeCode can still sell Icelanders’ genomic data, but not Americans’ genomic data.

    See: the letter from the bipartisan Coalition for Patient Privacy, representing 10 million Americans, that pressed Congress for this and other new consumer protections to stop the worst abuses of patient privacy in electronic health systems. URL: http://www.patientprivacyrights.org/site/DocServer/CoalitionPatPriv_Final01.14.09.pdf?docID=4701

    * American Recovery & Reinvestment Act, H.R. 1 (stimulus bill)

    2/17/09: On February 17, 2009 President Barack Obama signed the stimulus bill, the American Recovery & Reinvestment Act into law. Over $19 Billion is included in this bill to promote health IT, and overall, it is a positive step forward. The privacy protections Congress passed are the first major step towards safeguarding our basic, fundamental rights to keep our health matters private in federal law. This new law:

    * Prohibits the sale of our medical records without consent. There are exceptions for research, public health and treatment.
    * Limits marketing.
    * Requires any entity using an EHR (covered entities and business associates) to keep an audit trail of all people and organizations with whom they share your information.
    * Requires the policy committee to consider setting standards for technology systems to segment sensitive information so we can easily keep an x-ray tech from seeing our pap smear results.
    * Requires the policy committee to consider setting standards for encryption of data.
    * Increases monetary penalties for violations, grants Attorneys General authority to file suit on behalf of a state’s citizens, requires monitoring of contracts and reporting on compliance.
    * Grants funds for non-profits to participate in the regulatory process.
    * Requires breach notification.

  • http://decode.com Edward Farmer

    A quick but fundamental clarification to your piece on deCODE genetics’ bankruptcy filing: the Iceland-based subsidiary that performs all of deCODE’s human genetics work – manages its population resources, conducts its research and services, offers and processes its tests and genome scans, and whose scientists and laboratories are licensed to undertake this work – is not in bankruptcy. It continues all its operations without interruption. This subsidiary (Islensk Erfdagreining, or IE) does so under the same data and privacy protections as ever, rooted in the Icelandic community and within a tried and tested regulatory environment.

    The long and the short of it is that under the Chapter 11 process, IE, currently owned by deCODE genetics, will likely be sold to another group of investors as a going concern. Such a change in ownership of the operating company will have no bearing on the terms under which the Icelandic
    subsidiary manages and analyzes samples and data. Indeed, given the tone of your story it seems important to emphasize that the Icelandic subsidiary does not own these samples or data. They are owned by the individuals who provide them and are only utilized for the specific purpose, whether
    research or testing, agreed upon with those individuals and under the regulatory protections under which we work. Thus these resources cannot be sold and are not for sale, and IE’s genetics operation cannot be put in a box and taken somewhere else.
    Yours sincerely,
    Kari Stefansson
    CEO, deCODE genetics

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