U.S. Markets closed

23andMe vs. The FDA: Is the Government Putting the Kibosh on Innovation?

Daily Ticker
23andMe vs. The FDA: Is the Government Putting the Kibosh on Innovation?

The Food and Drug Administration recently warned the Google-backed (GOOG) genetic testing company 23andMe to stop selling and marketing its home saliva test kits. The FDA says the company has not received regulatory clearance for these “medical devices,” which cost $99 and claim to provide users with information about their health, lineage and genetic makeup.

Some critics argue that this is an example of the type of regulatory overreach that impedes innovation, entrepreneurship, and ultimately the economy.

Related: Want to Cut Government Waste? Find the $8.5 Trillion the Pentagon Can't Account For

One of those critics is CNBC Senior Editor John Carney.

“At every step when you invent something new, the government too often seems to be standing there saying ‘woah buddy, let's spend time checking this out’,” Carney tells us in the accompanying video. “I can understand that with certain things. If you’re going to invent a new kind of plane, we probably don’t want that falling on houses…but this is not a public danger in any way."

Related: Problem for Housing Recovery is Regulation, Not Rates: Whalen

Carney argues that 23andme is providing users with essential information, “in most fields we think giving consumers more information is better – that should apply to your genetic profile as well.”

The Food and Drug Administration argues products designed to diagnose, mitigate or prevent disease are medical devices that require approval. The agency says 23andMe falls in this category.

The FDA also expressed concerns that false positives for certain breast or ovarian cancers, for example, could lead a patient to undergo preventative surgery like a mastectomy.

It seems unlikely that a doctor would perform a double-mastectomy based on a $99 at-home test that aims to provide people with potentially helpful information, not diagnoses. Check out the video to see Carney’s response to the FDA’s rationale.

At the same time, the company does claim to have a test that is “saving lives,” which will provide “health reports on 254 diseases and conditions.” Doesn’t the FDA have a responsibility to put the kibosh on this device and its marketing if it doesn’t actually work?

Related: “If You Didn’t Do It, Don’t Settle”: Top Bank Lobbyist’s Advice for Banks

Carney says no.

“23andMe is very clear that any information you get from this is based on people with similar genetic profiles to you,” he notes. “It’s not saying you have this condition…It’s just more information.”

He also argues that the company is not giving the public anything to consume that could be dangerous – it’s not the “tonic sales guy from 1800s giving you something that will actually poison you.”

Tell Us What You Think!

And don't forget to follow us on Twitter and Facebook!

More from The Daily Ticker

Stocks Are Headed Even Higher: Michael Holland

Abolish Tipping to Eliminate the $2.13 Minimum Wage

How Three 20-Somethings Can Help Obama Fix HealthCare.gov

How to Never Pay Full Price for Anything --Ever Again