Direct-to-consumer (DTC) genetic testing has become increasingly popular in recent years, with several companies offering customers personalised and targeted genetic tests. These tests can assess an individual’s predisposition to specific medical conditions or predict their ancestry, gender, or traits. The growing market is also making accessible a variety of tests that examine genes associated with health and fitness, nutrition, mental health and even drug responses.
The increasing availability of these tests has profoundly impacted the direct-to-consumer genetic testing market. Consumers now have more access to information about their DNA than ever before and are exposed to a wider range of data points that enable them to make informed decisions about their health. This access further changes the future of genomics by furthering research into key areas such as public health, technology, ethical considerations and accuracy/quality control.
As the industry continues to evolve and the regulatory landscape adjusts accordingly, DTC genetic testing is becoming an important tool for individuals seeking personalised information about themselves to make empowered choices concerning their well-being.
Overview of the direct-to-consumer genetic testing market
The direct-to-consumer genetic testing market is a rapidly growing sector with a great potential for growth in the coming years. This market includes companies such as 23andMe, which recently announced it is going public via Richard Branson’s Special Purpose Acquisition Company (SPAC). This move has huge implications for the direct-to-consumer genetic testing market and could increase competition and opportunities for existing players.
In this article, we will discuss the current state of the direct-to-consumer genetic testing market and the potential impacts of 23andMe’s move.
23andMe to go public via Richard Branson’s SPAC
23andMe is a direct-to-consumer genetic testing service that provides customers personalised information about their health, traits and ancestry. Originally launched in 2006, 23andMe has become the direct-to-consumer genetic testing market leader. The company provides customers access to more than 95 health, traits and ancestry reports on its website and mobile app.
23andMe’s user base has experienced tremendous growth over the years, with more than 10 million users worldwide. Among these users, 6 million have accessed their health and trait reports. In contrast, 3 million have taken advantage of 23andMe’s Ancestry Reports featuring a unique breakdown of ethnic regions and populations based on the customer’s DNA profile.
In addition to providing access to general genetic reports, 23andMe also offers customers access to its Health Risks report—a comprehensive assessment of an individual’s potential risks for several diseases or conditions based on scientific studies conducted over several years. With these types of offerings, 23andMe has become an industry leader in both genomic analysis data services and providing comprehensive insights into individuals’ genetics and general population genetics, which can then be used for disease research and development of new medical treatments.
How 23andMe’s move to go public affects the direct-to-consumer genetic testing market
The direct-to-consumer genetic testing market is rapidly evolving and 23andMe’s recent move to go public changes the landscape in a big way. This move by 23andMe gives the company access to the resources and capital that will help them expand their services, research, and product offerings. It also provides other direct-to-consumer genetic testing market players with a model for going public or staying independent but still scaling up operations.
In turn, this could spur more competition as players in the space look to build out their capabilities and become more profitable. Increased competition could mean better costs for customers who want genetic testing services such as health reports, ancestry information, or personalised recommendations.
At the same time, it’s important to note that 23andMe still faces considerable regulatory hurdles before they can officially become a publicly traded company — mainly fulfilling FDA requirements for their health-related reports which have been reported as recently as January 2021. Such regulatory requirements have raised concerns around consumer data privacy, potentially affecting how existing and new players operate within this space. Moreover, as 23andMe works towards becoming a listed company on one of America’s biggest stock exchanges, the ripples in this market are far from done yet — with consumers most likely having more choices than ever before when it comes to direct-to-consumer genetic tests.
The Impact of 23andMe’s Move
23andMe’s decision to go public via Richard Branson’s SPAC is a major development for the direct-to-consumer genetic testing market. It signals the increasing growth and acceptance of the sector, and will likely spur further investments and innovations in the space.
In this article, we will discuss the impact of this move, and what it could mean for the future of direct-to-consumer genetic testing.
Increased competition in the market
The direct-to-consumer (DTC) genetic testing market has recently seen an influx of new players and competition, spurring innovation and lowered prices. 23andMe’s move into the space is a major development. The company is entering the market with many competitive advantages, including public recognition, several investment rounds totaling hundreds of millions in capital, and vast amounts of funding for research activities.
The impact on the DTC genetic testing market can be seen in multiple areas. For starters, the presence of established players such as 23andMe is bringing more attention to personalised health monitoring technology and fueling its rapid development. As a result, consumers now have more choices. For example, 23andMe carries tests that offer real-time notification when you are at risk for developing conditions like Type 2 diabetes; this data was unavailable just a few years ago. Additionally, because there are now more options on the market, consumers are paying less than before; this creates an overall healthier marketplace where available offerings are continually enhanced through increased competition.
In addition to lowering prices, the entrance of big names such as 23andMe into the market has provided more assurance to customers who may have hesitated to use lesser-known products due to concerns over accuracy or results interpretation from smaller companies which often lack expert oversight or scientific knowledge. The presence of trusted industry giants increases consumer confidence and will undoubtedly increase uptake for DTC testing products.
Increased investment in the market
In 2018, the direct-to-consumer genetic testing leader 23andMe announced its collaboration with GlaxoSmithKline and, in November 2019, Roche holding took a majority stake in the company. This move has increased investment in the market, paving the way for more personalised healthcare offerings.
As 23andMe expands its offerings to include not just ancestry but also health and wellness information, other players in the market are also capitalising on this trend. Companies such as Color Genomics, Helix and Invitae have launched direct-to-consumer genetic tests with special emphasis on conditions such as cancer screening.
Furthermore, studies suggest that customers would be willing to pay for medically approved direct-to-consumer genetic tests if provided with an easy checkout process and access to counselling services or additional support. This suggests that there is potential for growth within this particular healthcare sector even beyond what is currently available.
By leveraging partnerships with pharmaceutical companies such as GlaxoSmithKline and Roche Holding Ltd., 23andMe has been able to access larger pools of investment and expertise which will help them further develop their product range. This increase in investment is likely to catalyse increased competition between players in the direct-to-consumer genetic testing market and a wider range of offerings available to consumers interested in learning more about their genetics.
Increased regulation of the market
In January of 2021, 23andMe announced that they were significantly reducing the scope of its direct-to-consumer DNA testing services, citing “regulatory challenges” as the reason for their decision to stop offering health reports to customers. This move will likely have far-reaching implications for the direct-to-consumer genetic testing market, given that 23andMe is one of the most popular and trusted companies in this space.
The decreased availability of health reports from 23andMe means increased regulation for other companies in this market. Likely, government regulators may now require more stringent restrictions on how these services can be advertised and sold to consumers. For example, companies may need to provide more information about potential risks of each test before allowing a consumer to purchase one. Furthermore, companies will also be required to adhere to guidelines on how personal data obtained from these tests can be used or stored by third parties.
These changes are likely to impact existing providers of direct-to-consumer genetic testing services and those looking to enter the market in the future. The increased regulation could make it more difficult or expensive for smaller companies just starting in this space, as additional costs will be associated with meeting all regulatory requirements. Further, increased oversight could lead to higher prices for consumers looking for these services and less availability, depending on how strictly authorities enforce regulations.
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