Fledgling technologies like genetic testing require a free market to thrive and mature — a market free from onerous regulations. As we’ve repeatedly seen with products such as home computers, DVD machines, and MP3 players, new consumer technologies follow a typical market trajectory. The initial products are expensive and often flawed, appealing only to “early adopters.” But these early adopters help establish a viable market for the product, creating incentives for existing manufacturers to lower costs and improve their quality, and for new manufacturers to enter the market. This attracts new “middle adopter” customers, which in turn spurs further innovation, attracting yet more customers in a virtuous cycle.
The early adopters who purchased the first Apple iPods in 2001 spent $400 for a device with only 5 GB memory. But because of the market created by the early adopters, in 2004 middle adopters could buy a $400 iPod with 40 GB memory. Today in 2010, customers can buy an iPod Classic for only $250 containing a whopping 160 GB memory.
But what if government regulators had prevented early adopters from purchasing the initial crude iPods? They would have strangled the infant iPod market in its cradle, to the detriment of millions of future iPod customers. Yet that is precisely what the government is threatening to do with the infant consumer genetic testing industry.
Thwarting the early adopters for consumer genetic testing could also thwart important future medical innovations. In September 2008, Google co-founder Sergey Brin stunned the technology world when he announced that genetic testing had revealed a mutation which increased his chance of developing Parkinson’s disease. As a matter of rational self-interest, he has chosen to donate $50 million of his fortune to Parkinson’s disease research which may someday bring enormous benefits for himself — and for millions of Parkinson’s disease patients around the world.
Admittedly, Brin is an unusual early adopter. According to Wired, he is “likely the first who, based on a genetic test, began funding scientific research in the hope of escaping a disease in the first place.” But he may not be the last.
If government regulators had prevented Brin from gaining access to this information, who knows what future medical advances might never be discovered?
Opponents of direct-to-consumer genetic testing typically raise three standard objections, including: (1) the test results may be inaccurate; (2) even if the results are accurate, customers will not know what to do with the information; and (3) customers may learn about genetic defects that could make health insurance prohibitively expensive or impossible to purchase. However, a truly free market in health services and health insurance would address all of these concerns.
Customers concerned about the reliability and accuracy of their test results are best served by a free market that subjects products to the pitiless scrutiny of consumers seeking the best value for their money. Of course, if an unscrupulous company makes fraudulent claims about its services, it should be punished to the fullest extent of the law. Protecting consumers against fraud is one of the proper functions of government. But if personal genomics companies otherwise truthfully describe the capabilities and limitations of their tests, then the early adopters should be left free to exercise their best judgment as to whether they wish to purchase those services.
Over time, competition between genetic companies making truthful claims about their products will spur innovation as they seek to address customers’ needs for accurate results. Furthermore, independent reviewers would also spring up to assess the quality of these services, much along the lines of the above-mentioned Venter experiment — just as there are already countless independent reviewers to help customers purchase computers, cars, or camping gear.
With respect to potentially confusing test results, in a free market genetic counseling services would quickly spring up to help customers understand and interpret their significance. These genetic advisors may vary in quality, just as financial advisors currently vary in quality — some may be excellent, whereas others may be mediocre. But a free market would allow customers to find advisors that best suited their needs and preferences. Because genetic science is evolving so rapidly, it is each individual’s responsibility to perform his due diligence and consult with his personal physician before making major medical decisions based on a genetic test result.
Finally, concerns about so-called “genetic discrimination” would also be addressed by a fully free market in health insurance services. George Mason University professor Alex Tabarrok has proposed allowing people to purchase “genetic insurance,” where they pay insurers a premium prior to getting tested in exchange for promise of payments to cover higher health and/or life insurance costs if they subsequently learn that they have an unfavorable genetic profile.
University of Chicago professor John Cochrane has proposed a variant known as “health status insurance,” where customers could pay their insurers an additional small fee now to lock in their ability to purchase insurance in the future, even if future test results or other changes in their health status might otherwise render them uninsurable.
(Those who are interested in further discussion of such issues might also enjoy the paper by Manson and Conko of the Competitive Enterprise Institute, “Genetic Testing and Insurance: Why the Fear of ‘Genetic Discrimination’ Does Not Justify Regulation.“)
Although these concerns raised by the opponents of direct-to-consumer genetic testing are legitimate, they would be addressed in a free market, precisely because service providers (e.g., testing companies, genetic counselors, and insurance companies) would have a powerful economic incentive to meet the demands created by customers seeking to better their lives and their health.
In summary, the central issue is whether you should be free to acquire knowledge about yourself that will help you act according to your best judgment for your benefit — in particular, by helping you treat, mitigate, or prevent bad diseases.
The federal government wants to deny you that freedom, essentially saying, “You can’t handle the truth. Instead, we’ll decide what’s best for you.”
Any self-respecting adult who wishes to exercise his responsibility (and his right) to manage his own life as he sees fit should be offended by this paternalistic attitude. Our lives are our own. Americans already know this. Let’s demand that our government recognize it as well.