Medco Acquires DNA Direct

Last week Medco announced that it was acquiring DNA Direct.  (Medco Release) DNA Direct is a firm that manages genetic testing and related services, primarily on behalf of payers.  It is URAC certified as a utilization manager, focusing on appropriate use of genomic information.   It operates largely through a call center and online model, utilizing trained genetic specialists.  Medco has had an extensive interest in genomic medicine, particularly in regard to how genetic testing might guide drug use.

Medco’s acquisition follows CVS Caremark’s announcement of an investment in Generation Health.  Generation Health’s CEO had been Per Lofberg, a long time PBM veteran, more recently involved in Merck’s venture activities.  CVS wanted Lofberg to run its troubled PBM, and the investment in Generation Health may have been part of the price.  (CVS Release) Generation Health had also styled itself as a “genetic benefit management” company.   The two firms already had a partnership whereby Generation provided  pharmacogenetic testing for Caremark’s members.  Generation purports to develop evidence-based clinical models regarding use of genetic testing, including cost and health coutcomes and to deliver that information for patients, providers and payers.

The two transactions give credibility to the notion that personalized medicine will expand rapidly and that payers, patients and providers will need help in understanding how to appropriately use the information provided by these tests.   In fact, at  this point, much genetic testing has little clinical utility and often has sketchy accuracy.  Having established health care companies involved in overseeing use of genetic information will help ensure that personalized medicine is trusted and grows carefully, in accordance with the actual clinical value of test results.