Wednesday, November 27, 2013
Say you are a gene-testing company and you get a public letter of warning from the Food and Drug Administration that states what you are offering is a form of consumer fraud. How do you recover your reputation after that? This is what has happened to 23 and Me, the best-known brand of genetic testing businesses. The FDA letter in effect put the company out of marketing. Yes, it can do gene-testing but no, it can't report proclivities to various diseases. So why get tested in the first place? 23 and Me is facing a prolonged period of brand reformulation and it might have to give up much of what made its offering distinctive. It also cannot escape the letter and warning, so it will have to carefully work around it. Were I the CEO of the company, I would be plenty worried. Were I the spokesperson for the company, I would be tongue-tied. There is a good chance that 23 and Me will go out of business and the millions it has raised will disappear without a return to investors. The mystery is why the company ignored the FDA in the first place. There might be a case study in that -- how not to do it.