Lanhee J Chen, Columnist

Silicon Valley Learns to Think Inside the Box

The 23andMe episode seems to suggest that some entrepreneurs, venture capitalists and others around Silicon Valley misunderstand a few things about Washington and the regulatory process.

July 16, 2014 at 5:19 PM UTC

By Lanhee J Chen

Lanhee Chen is a research fellow at the Hoover Institution who also teaches public policy at Stanford University. He was the policy director of Mitt Romney's 2012 presidential campaign. Chen was a senior official at the U.S. Department of Health and Human Services in the George W. Bush administration. He practiced business litigation with the law firm of Gibson, Dunn & Crutcher LLP and served as the Winnie Neubauer visiting fellow in health policy studies at the Heritage Foundation. Chen earned his doctorate and master's degree in political science from Harvard University, his law degree from Harvard Law School and his bachelor's degree in government from Harvard College.

Anne Wojcicki and 23andMe learned a costly lesson in how to deal with federal regulators. — Anne Wojcicki and 23andMe learned a costly lesson in how to deal with federal regulators.

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Late last year, the Food and Drug Administration decided to take down a rapidly growing Silicon Valley startup called 23andMe Inc., a personal genomics and biotechnology company backed in part by Google Ventures and Russian venture capitalist Yuri Milner. The FDA ordered 23andMe to stop marketing health results from its genetic information product after a lengthy colloquy with the company that (according to the agency) lasted four years and included dozens of meetings, written communications and hundreds of e-mail exchanges.

What was perplexing about the case was the decision by 23andMe to ignore the regulators in the six months before the cease-and-desist order. There were no phone calls, letters or conversations (again, according to the agency) in this period. When the FDA forbade the company from selling its headline product, the reaction was mostly unanimous: It didn't have to be this way.