There are two types of testing: genetic and genomic. Genome sequencing reads each one of the three billion base pairs crammed into 23 chromosomes and their inter-relationships. Genetic testing doesn’t. The two lend themselves to very different markets and produce different results. What does this mean for operators and patients?
Genetic testing tends to look at much smaller and specified areas of DNA. Whole-genome sequencing is a much harder sell straight to consumers, and as such testing takes place, a service explaining what the results garnered actually means is necessary. That service, known as genetic counselling, is required by law in Europe and is also partly what makes genome sequencing so expensive. Geneticists, who have the ability to read and interpret DNA sequences, are a rare and expensive breed. It’s estimated that between a half and two-thirds of all genetic counselling vacancies remain unfilled (Wired, 2018).
What of cost? Veritas International has just dropped its genome sequencing price from $999 to $599 in the USA but HBI hears that it can’t knock off a similar discount in Europe because of the counselling requirement. Another European whole genome sequencing company, Dante Labs, says it keeps costs at €599 for sequencing and basic analysis because it does minimal marketing and sales outreach to doctors and hospitals.
The cost of tests is actually only around 17% of total lab costs, according to research from Dante Labs. The rest is made up of sales and marketing (23%), research and development (44%) and admin (16%). Its SEC filings showed it made $2.3m in FY 2018 with a net income of $376k. The previous year it actually made a loss of $239k against sales of $250k.
How does that compare to its upstart simpler sibling, genetic testing? Genetic testing is much easier to market to a B2C audience. It often appears packed in a friendly parcel labelled ‘wellness’ or ‘lifestyle’ with infographic-friendly test results that give tailored advice on exercise, what kinds of foods to eat and the risk of developing certain types of cancer. Frothier and more throwaway this might be – and it’s easy to criticise the end product as lacking compared to genome sequencing – but the market for these tests is growing.
Partly, this is down to price. DNAFit offers tests for £89 and 23andMe for £149.
Where does that leave us? Genomic testing might be much more valuable to the patient but it’s much harder to sell it to them – and has a far bigger price. It’s a bigger B2B market because it’s expensive and requires the support and counselling that often comes from within integrated healthcare systems. Genetic testing is potentially much less valuable to the patient – especially those with the greatest need – but is far easier to sell.
The price of genomic testing is coming down, as are processing times but for the moment we expect to see significant investment and growth in the genetic testing market – possibly to the detriment of the more expensive alternative.
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