Maybes and Could Bes

Illumina is a company that makes platforms that do genetic sequencing for the likes of Covid variants and fetal abnormalities. Grail is a company that has blood tests that can detect DNA from cancer cells before people show symptoms. At the outset, Illumina created Grail for that purpose then spun the company off so each could focus on what it does best.

Grail succeeded, strongly.

Now Illumina wants to (re)acquire Grail, and Grail wants to be (re)acquired. Illumina says its regulatory satisfaction expertise can greatly facilitate bringing Grail’s tests to market and to the benefit of countless folks at risk of any of the 50 cancers Grail’s tests can detect quickly and reliably, along with the 12 most deadly cancers with 60% accuracy. All with a simple blood draw.

Potential competitors petitioned the Federal Trade Commission to block the merger, and the FTC agreed and has sued to block the merger.

That’s a problem. The FTC’s case centers on two premises and a false underlying assumption. The merger would, according to the FTC,

lessen competition in the US multi-cancer early detection (MCED) test market by diminishing innovation and potentially increasing prices.

“Diminishing innovation”—not at all. Aside from the lack of actual evidence of such a diminution—this is just tacit speculation—this sort of development only spurs competition (my own, no more or less valid speculation).

“Potentially increasing prices”—again, not at all. That first word says it all: the plaint is just overt speculation. There are no increasing prices here, and there’s no evidence that increasing prices are per se anticompetitive (as opposed, for instance, due to too high demand for too little product. Never mind that neither demand nor product yet exist.)

The false underlying assumption is that a market for this sort of thing even exists. It does not, and that lack renders both of those speculations, individually and severally, wholly irrelevant.

Maybes and could bes in a nonexistent market—what a way to regulate.

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