According to the San Jose Mercury News, 23andMe has gotten in trouble with the FDA. Their service allows an individual to test their personal DNA and compare it to a database of almost 1 million DNA samples. The idea is that the comparison will tell the client if the individual shares genetic information with someone with particular diseases. The results might provide insight into the client’s health that can then me used by the client’s physician to work towards better health. It sounds like a really interesting idea that would yield interesting results. One company back is Google, so they have deep pockets.
The problem? The FDA has ordered 23andMe to stop marketing their genetic tests. Within days of the FDA order, the company became the subject of a class action lawsuit regarding their product.
I have no idea if their service works or not. But, I do know that 23andMe ran afoul of a common small business trap: compliance. The larger a company becomes the more complex the compliance issues. By 3 employees, the company should have a worker’s compensation policy in Georgia (though the company is responsible for worker injuries after 1 employee). 401Ks require certain paperwork. Eventually the company is subject to laws and regulations such as PPACA, FMLA, HIPAA, and the FLSA and has to manage issues with state and federal agencies.
Another company who has been in the news recently concerning compliance issues is UBER. They offer a web-based black car service that users rave about. Their challenge is that they often run into taxi and limousine regulations. Generally, UBER chooses to fight both legally and in the public forum. They also have very deep pockets to fight regulatory structures.
The problem for the business manager is we do not have unlimited resources. The challenges can end up in court or with stop work orders. There are settlements. The agency with oversight can literally close the company down or make it impossible to continue on.
Our company is newly large enough to realize the joy of regulation and compliance. We’re big enough to have the challenges, but small enough not to have the resources for handling everything easily. We’re committed to understanding the rules, but don’t to spend all our time on compliance issues. We’re involved in health care, so these issues are all around us. We have to be good at it. We’ve also discovered the joy of checklists.
I’ll write more on this issue, but suffice it to say, I can’t get overly excited by the compliance issue I face; however, I see the value in developing expertise in this area.
Any other thoughts?
Ned Morgens 