Privacy Protection, Personalized Medicine, and Genetic Testing

This paper explores how state genetic privacy laws affect the diffusion of personalized medicine, using data on genetic testing for cancer risks. State genetic privacy regimes employ and combine up to three alternative approaches to protecting patient privacy: Rules requiring that an individual is notified about potential privacy risks; rules restricting discriminatory usage of genetic data by employers or insurance companies; and rules limiting redisclosure without the consent of the individual. We find empirically that approaches to genetic and health privacy that give users control over redisclosure encourage the spread of genetic testing, but that notification deters individuals from obtaining genetic tests. We present some evidence that the latter reflects costs imposed on the supply of genetic testing by hospitals. We find no effects of state genetic antidiscrimination laws on genetic testing rates. The online appendix is available at https://doi.org/10.1287/mnsc.2017.2858 . This paper was accepted by Chris Forman, information systems.