September 21 | 2018
Your Genetic Data Is The New Oil. These Startups Will Pay to Rent It.
Kristen is a science journalist, specializing in the areas of psychology, medical innovations, and the intersection of sociology and culture. Her focus is in making science information accessible and meaningful to a wide variety of individuals. Originally from North Dakota, Kristen is currently based in Vancouver, Canada. She received her degree in English from Simon Fraser University. A lifelong learner with many interests, she has completed certificates in epigenetics, personalized medicine, genetics and evolution, and physiology. Kristen hosts the Humans of Earth podcast.
A doctor conducts a test on DNA.
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Perhaps you're one of the 12 million people who has spit into a tube in recent years to learn the secrets in your genetic code, like your ancestry, your health risks, or your carrier status for certain diseases. If you haven't participated in direct-to-consumer genetic testing, you may know someone who has.
It's for people who want more control over their genetic data--plus a share of the proceeds when and if that data is used.
Mountains of genomic data have been piling up steeply over the last several years, but according to some experts, not enough research and drug discovery is being done with the data collected, and customers rarely have a say in how their data is used. Now, a slew of ambitious startup companies are bringing together the best of blockchain technology and human genomics to help solve these problems.
But First, Why Is Your Genome So Valuable?
Access to genetic information is an obvious boon to scientific and medical progress. In the right hands, it has the potential to save lives and reduce suffering — by facilitating the development of better, safer, more targeted treatments and by shedding light on the role of genetics in countless diseases and medical conditions.
Research requiring access to direct-to-consumer (DTC) genomic data is already well underway. For example, 23andMe, the popular California-based DTC genetic testing company, has published 107 research articles so far, as of this May, using data from their five million-plus customers around the world. Their website states that, on average, of the 80 percent of their customers who have opted to share their genomic data for research purposes, each "individual contributes to 200 different research studies."
And this July, a new collaboration was announced between 23andMe and GlaxoSmithKline, the London-based pharmaceutical company. GlaxoSmithKline will be using data from 23andMe customers to develop new medical treatments, while 23andMe will receive $300 million from the four-year deal. Both companies are poised to profit significantly from their union.
Should 23andMe's customers share in the gains? Peter Pitts, president of the Center for Medicine in the Public Interest, believes they should. "Are they going to offer rebates to people who opt in, so their customers aren't paying for the privilege of 23andMe working with a for-profit company in a for-profit research project?" Pitts told NBC. So far, 23andMe has not announced any plans to share profits with their customers.
But outside of such major partnerships, many researchers are frustrated by the missed opportunities to dig deeper into the correlations between genetics and disease. That's because people's de-identified genomic information is "essentially lying fallow," siloed behind significant security blockades in the interest of preserving their anonymity. So how can both researchers and consumers come out ahead?
Putting Consumers Back in Control
For people who want more control over their genetic data -- plus a share of the proceeds when and if that data is used -- a few companies have paired consumer genomics with blockchain technology to form a new field called "blockchain genomics." Blockchain is a data storage technology that relies on a network of computers, or peer-to-peer setup, making it incredibly difficult to hack. "It's a closed loop of transactions that gets protected and encrypted, and it cannot be changed," says Tanya Woods, a blockchain thought leader and founder of Kind Village, a social impact technology platform.
The vision is to incentivize consumers to share their genomic data and empower researchers to make new breakthroughs.
"So if I agree to give you something and you agree to accept it, we make that exchange, and then that basic framework is captured in a block. … Anything that can be exchanged can be ledgered on blockchain. Anything. It could be real estate, it could be the transfer of artwork, it could be the purchase of a song or any digital content, it could be recognition of a certification," and so on.
The blockchain genomics companies' vision is to incentivize consumers to share their genomic data and empower researchers to make new breakthroughs, all while keeping the data secure and the identities of consumers anonymous.
Consumers, or "partners" as these companies call them, will have a direct say regarding which individuals or organizations can "rent" their data, and will be able to negotiate the amount they receive in exchange. But instead of fiat currency (aka "regular money") as payment, partners will either be remunerated in cryptocurrency unique to the specific company or they will be provided with individual shares of ownership in the database for contributing DNA data and other medical information.
Luna DNA, one of the blockchain genomics companies, "will allow any credible researcher or non-profit to access the databases for a nominal fee," says its president and co-founder, Dawn Barry. Luna DNA's infrastructure was designed to embrace certain conceptions of privacy and privacy law "in which individuals are in total control of their data, including the ability to have their data be 'forgotten' at any time," she said. This is nearly impossible to implement in pre-existing systems that were not designed with full control by the individual in mind.
One of the legal instruments to which Barry referred was the European Union's General Data Protection Regulation, which "states that the data collected on an individual is owned and should be controlled by that individual," she explained. Another is the California Privacy Act that echoes similar principles. "There is a global trend towards more control by the individual that has very deep implications to companies and sites that collect and aggregate data."
David Koepsell, CEO and co-founder of EncrypGen, told Forbes that "Most people are not aware that your DNA contains information about your life expectancy, your proclivity to depression or schizophrenia, your complete ethnic ancestry, your expected intelligence, maybe even your political inclinations" — information that could be misused by insurance companies and employers. And though DTC customers have been assured that their data will stay anonymous, some data can be linked back to consumers' identities. Blockchain may be the answer to these concerns.
Both blockchain technology and the DTC genetic testing arena have a glaring diversity problem.
"The security that's provided by blockchain is tremendous," Woods says. "It's a significant improvement … and as we move toward more digitized economies around the world, these kinds of solutions that are providing security, validity, trust — they're very important."
In the case of blockchain genomics companies like EncrypGen, Luna DNA, Longenesis, and Zenome, each partner who joins would bring a digital copy of their genetic readout from DTC testing companies (like 23andMe or AncestryDNA). The blockchain technology would then be used to record how and for what purposes researchers interact with it. (To learn more about blockchain, check out this helpful visual guide by Reuters.)
Obstacles in the Path to Success
The cryptocurrency approach as a method of payment could be an unattractive lure to consumers if only a limited number of people make transactions in a given currency's network. And the decade-old technology underlying it -- blockchain -- is not yet widely supported, or even well-understood, by the public at large.
"People conflate blockchain with cryptocurrency and bitcoin and all of the concerns and uncertainty thereof," Barry told us. "One can think of cryptocurrency as a single expression of the vast possibilities of the blockchain technology. Blockchain is straightforward in concept and arcane in its implementation."
But blockchain, with its Gini coefficient of 0.98, is one of the most unequal "playing fields" around. The Gini coefficient is a measure of economic inequality, where 0 represents perfect equality and 1 represents perfect inequality. Around 90 percent of bitcoin users, for example, are male, white or Asian, between the ages of 18 and 34, straight, and from middle and upper class families.
The DTC genetic testing arena, too, has a glaring diversity problem. Most DTC genetic test consumers, just like most genetic study participants, are of European descent. In the case of genetic studies, this disparity is largely explained by the fact that most research is done in Europe and North America. In addition to being over 85 percent white, individuals who purchase DTC genetic testing kits are highly educated (about half have more than a college degree), well off (43 percent have a household income of $100,000 or more per year), and are politically liberal (almost 65 percent). Only 14.5 percent of DTC genetic test consumers are non-white, and a mere 5 percent are Hispanic.
Since risk of genetic diseases often varies greatly between ethnic groups, results from DTC tests can be less accurate and less specific for those of non-European ancestry — simply due to a lack of diverse data. The bigger the genetic database, wrote Sarah Zhang for The Atlantic, the more insights 23andMe and other DTC companies "can glean from DNA. That, in turn, means the more [they] can tell customers about their ancestry and health…" Though efforts at recruiting non-white participants have been ongoing, and some successes have been made at improving ancestry tools for people of color, the benefits of genomic gathering in North America are still largely reaped by Caucasians.
So far, it's not yet clear who or how many people will choose to partake in the offerings of blockchain genomics companies.
So one chief hurdle for the blockchain genomics companies is getting the technology into the hands of those who are under-represented in both blockchain and genetic testing research. Women, in particular, may be difficult to bring on board the blockchain genomics bandwagon — though not from lack of interest. Although women make up a significant portion of DTC genetic testing customers (between 50 and 60 percent), their presence is lacking in blockchain and the biotech industry in general.
At the North American Bitcoin Conference in Miami earlier this year, only three women were on stage, compared to 84 men. And the after-party was held in a strip club.
"I was at that conference," Woods told us. "I don't know what happened at the strip club, I didn't observe it. That's not to say it didn't happen … but I enjoyed being at the conference and I enjoyed learning from people who are experimenting in the space and developing in it. Generally, would I have loved to see more women visible? Of course. In tech generally I want to see more women visible, but there's a whole ecosystem shifting that has to happen to make that possible."
Luna's goal is to achieve equal access to a technology (blockchain genomics) that could potentially improve health and quality of life for all involved. But in the merging of two fields that have been unequal since their inception, achieving equal access is one tall order indeed. So far, it's not yet clear who or how many people will choose to participate. LunaDNA's platform has not yet launched; EncrypGen released their beta version just last month.
Sharon Terry, president and CEO of Genetic Alliance — a nonprofit organization that advocates for access to quality genetic services — recently shared a message that reflects the zeitgeist for all those entering the blockchain genomics space: "Be authentic. Tell the truth, even about motives and profits. Be transparent. Engage us. Don't leave us out. Make this real collaboration. Be bold. Take risks. People are dying. It's time to march forward and make a difference."
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Kristen is a science journalist, specializing in the areas of psychology, medical innovations, and the intersection of sociology and culture. Her focus is in making science information accessible and meaningful to a wide variety of individuals. Originally from North Dakota, Kristen is currently based in Vancouver, Canada. She received her degree in English from Simon Fraser University. A lifelong learner with many interests, she has completed certificates in epigenetics, personalized medicine, genetics and evolution, and physiology. Kristen hosts the Humans of Earth podcast.
February 27 | 2023
Breakthrough therapies are breaking patients' banks. Key changes could improve access, experts say.
Single-treatment therapies are revolutionizing medicine. But insurers and patients wonder whether they can afford treatment and, if they can, whether the high costs are worthwhile.
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CSL Behring’s new gene therapy for hemophilia, Hemgenix, costs $3.5 million for one treatment, but helps the body create substances that allow blood to clot. It appears to be a cure, eliminating the need for other treatments for many years at least.
Likewise, Novartis’s Kymriah mobilizes the body’s immune system to fight B-cell lymphoma, but at a cost $475,000. For patients who respond, it seems to offer years of life without the cancer progressing.
These single-treatment therapies are at the forefront of a new, bold era of medicine. Unfortunately, they also come with new, bold prices that leave insurers and patients wondering whether they can afford treatment and, if they can, whether the high costs are worthwhile.
“Most pharmaceutical leaders are there to improve and save people’s lives,” says Jeremy Levin, chairman and CEO of Ovid Therapeutics, and immediate past chairman of the Biotechnology Innovation Organization. If the therapeutics they develop are too expensive for payers to authorize, patients aren’t helped.
“The right to receive care and the right of pharmaceuticals developers to profit should never be at odds,” Levin stresses. And yet, sometimes they are.
Leigh Turner, executive director of the bioethics program, University of California, Irvine, notes this same tension between drug developers that are “seeking to maximize profits by charging as much as the market will bear for cell and gene therapy products and other medical interventions, and payers trying to control costs while also attempting to provide access to medical products with promising safety and efficacy profiles.”
Why Payers Balk
Health insurers can become skittish around extremely high prices, yet these therapies often accompany significant overall savings. For perspective, the estimated annual treatment cost for hemophilia exceeds $300,000. With Hemgenix, payers would break even after about 12 years.
But, in 12 years, will the patient still have that insurer? Therein lies the rub. U.S. payers, are used to a “pay-as-you-go” model, in which the lifetime costs of therapies typically are shared by multiple payers over many years, as patients change jobs. Single treatment therapeutics eliminate that cost-sharing ability.
"As long as formularies are based on profits to middlemen…Americans’ healthcare costs will continue to skyrocket,” says Patricia Goldsmith, the CEO of CancerCare.
“There is a phenomenally complex, bureaucratic reimbursement system that has grown, layer upon layer, during several decades,” Levin says. As medicine has innovated, payment systems haven’t kept up.
Therefore, biopharma companies begin working with insurance companies and their pharmacy benefit managers (PBMs), which act on an insurer’s behalf to decide which drugs to cover and by how much, early in the drug approval process. Their goal is to make sophisticated new drugs available while still earning a return on their investment.
New Payment Models
Pay-for-performance is one increasingly popular strategy, Turner says. “These models typically link payments to evidence generation and clinically significant outcomes.”
A biotech company called bluebird bio, for example, offers value-based pricing for Zynteglo, a $2.8 million possible cure for the rare blood disorder known as beta thalassaemia. It generally eliminates patients’ need for blood transfusions. The company is so sure it works that it will refund 80 percent of the cost of the therapy if patients need blood transfusions related to that condition within five years of being treated with Zynteglo.
In his February 2023 State of the Union speech, President Biden proposed three pilot programs to reduce drug costs. One of them, the Cell and Gene Therapy Access Model calls on the federal Centers for Medicare & Medicaid Services to establish outcomes-based agreements with manufacturers for certain cell and gene therapies.
A mortgage-style payment system is another, albeit rare, approach. Amortized payments spread the cost of treatments over decades, and let people change employers without losing their healthcare benefits.
Only about 14 percent of all drugs that enter clinical trials are approved by the FDA. Pharma companies, therefore, have an exigent need to earn a profit.
The new payment models that are being discussed aren’t solutions to high prices, says Bill Kramer, senior advisor for health policy at Purchaser Business Group on Health (PBGH), a nonprofit that seeks to lower health care costs. He points out that innovative pricing models, although well-intended, may distract from the real problem of high prices. They are attempts to “soften the blow. The best thing would be to charge a reasonable price to begin with,” he says.
Instead, he proposes making better use of research on cost and clinical effectiveness. The Institute for Clinical and Economic Review (ICER) conducts such research in the U.S., determining whether the benefits of specific drugs justify their proposed prices. ICER is an independent non-profit research institute. Its reports typically assess the degrees of improvement new therapies offer and suggest prices that would reflect that. “Publicizing that data is very important,” Kramer says. “Their results aren’t used to the extent they could and should be.” Pharmaceutical companies tend to price their therapies higher than ICER’s recommendations.
Drug Development Costs Soar
Drug developers have long pointed to the onerous costs of drug development as a reason for high prices.
A 2020 study found the average cost to bring a drug to market exceeded $1.1 billion, while other studies have estimated overall costs as high as $2.6 billion. The development timeframe is about 10 years. That’s because modern therapeutics target precise mechanisms to create better outcomes, but also have high failure rates. Only about 14 percent of all drugs that enter clinical trials are approved by the FDA. Pharma companies, therefore, have an exigent need to earn a profit.
Skewed Incentives Increase Costs
Pricing isn’t solely at the discretion of pharma companies, though. “What patients end up paying has much more to do with their PBMs than the actual price of the drug,” Patricia Goldsmith, CEO, CancerCare, says. Transparency is vital.
PBMs control patients’ access to therapies at three levels, through price negotiations, pricing tiers and pharmacy management.
When negotiating with drug manufacturers, Goldsmith says, “PBMs exchange a preferred spot on a formulary (the insurer’s or healthcare provider’s list of acceptable drugs) for cash-base rebates.” Unfortunately, 25 percent of the time, those rebates are not passed to insurers, according to the PBGH report.
Then, PBMs use pricing tiers to steer patients and physicians to certain drugs. For example, Kramer says, “Sometimes PBMs put a high-cost brand name drug in a preferred tier and a lower-cost competitor in a less preferred, higher-cost tier.” As the PBGH report elaborates, “(PBMs) are incentivized to include the highest-priced drugs…since both manufacturing rebates, as well as the administrative fees they charge…are calculated as a percentage of the drug’s price.
Finally, by steering patients to certain pharmacies, PBMs coordinate patients’ access to treatments, control patients’ out-of-pocket costs and receive management fees from the pharmacies.
Therefore, Goldsmith says, “As long as formularies are based on profits to middlemen…Americans’ healthcare costs will continue to skyrocket.”
Transparency into drug pricing will help curb costs, as will new payment strategies. What will make the most impact, however, may well be the development of a new reimbursement system designed to handle dramatic, breakthrough drugs. As Kramer says, “We need a better system to identify drugs that offer dramatic improvements in clinical care.”
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Gail Dutton has covered the biopharmaceutical industry as a journalist for the past three decades. She focuses on the intersection of business and science, and has written extensively for GEN – Genetic Engineering & Biotechnology News, Life Science Leader, The Scientist and BioSpace. Her articles also have appeared in Popular Science, Forbes, Entrepreneur and other publications.
In today's podcast episode, law professor Gaia Bernstein talks about the challenges of keeping control over our thoughts and actions, even when some powerful forces are pushing in the other direction.
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Each afternoon, kids walk through my neighborhood, on their way back home from school, and almost all of them are walking alone, staring down at their phones. It's a troubling site. This daily parade of the zombie children just can’t bode well for the future.
That’s one reason I felt like Gaia Bernstein’s new book was talking directly to me. A law professor at Seton Hall, Gaia makes a strong argument that people are so addicted to tech at this point, we need some big, system level changes to social media platforms and other addictive technologies, instead of just blaming the individual and expecting them to fix these issues.
Gaia’s book is called Unwired: Gaining Control Over Addictive Technologies. It’s fascinating and I had a chance to talk with her about it for today’s podcast. At its heart, our conversation is really about how and whether we can maintain control over our thoughts and actions, even when some powerful forces are pushing in the other direction.
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We discuss the idea that, in certain situations, maybe it's not reasonable to expect that we’ll be able to enjoy personal freedom and autonomy. We also talk about how to be a good parent when it sometimes seems like our kids prefer to be raised by their iPads; so-called educational video games that actually don’t have anything to do with education; the root causes of tech addictions for people of all ages; and what kinds of changes we should be supporting.
Gaia is Seton’s Hall’s Technology, Privacy and Policy Professor of Law, as well as Co-Director of the Institute for Privacy Protection, and Co-Director of the Gibbons Institute of Law Science and Technology. She’s the founding director of the Institute for Privacy Protection. She created and spearheaded the Institute’s nationally recognized Outreach Program, which educated parents and students about technology overuse and privacy.
Professor Bernstein's scholarship has been published in leading law reviews including the law reviews of Vanderbilt, Boston College, Boston University, and U.C. Davis. Her work has been selected to the Stanford-Yale Junior Faculty Forum and received extensive media coverage. Gaia joined Seton Hall's faculty in 2004. Before that, she was a fellow at the Engelberg Center of Innovation Law & Policy and at the Information Law Institute of the New York University School of Law. She holds a J.S.D. from the New York University School of Law, an LL.M. from Harvard Law School, and a J.D. from Boston University.
Gaia’s work on this topic is groundbreaking I hope you’ll listen to the conversation and then consider pre-ordering her new book. It comes out on March 28.
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Matt Fuchs is the host of the Making Sense of Science podcast and served previously as the editor-in-chief of Leaps.org. He writes as a contributor to the Washington Post, and his articles have also appeared in the New York Times, WIRED, Nautilus Magazine, Fortune Magazine and TIME Magazine. Follow him @fuchswriter.