China's gene testing products: overpriced

"Take a saliva swab, send it to the gene testing company and soon you will get a detailed report of your gene, including ancestral analysis and genetic disease detection."

Zhang, who works in Beijing, paid 799 yuan ($127) for gene testing services in 2017, which suggested she was likely to suffer from vertigo and lactose intolerance, and was unlikely to get addicted to alcohol.

Gene testing is becoming increasingly popular in China, with simple methods of service. The price for gene testing currently ranges from hundreds to tens of thousands of yuan.

For example, on Taobao, China's leading online shopping website, a "Kids' Memory Gene Test" package detecting 3 genetic loci is priced at 599 yuan ($95) while the "Obesity Gene Test" package of 4 genetic loci testing is priced at 1,780 yuan ($283).

"The pricing of different gene testing products is unreasonable, with some hugely overpriced," according to WeGene CEO Zheng Qiang. WeGene is a gene testing company in China. "The average cost of low-flux gene tests for a single genetic locus ranges from 10 to 20 yuan ($1.6-$3.2)."

Regardless of the costs of logistics and research and development, the net profit rate of the above-mentioned gene testing products is up to 90 percent. Most of the margins go to agents. Especially in children's gene testing products, agents can get a margin rate as high as 90 percent.

Children's genetic testing is especially well-received by Chinese parents who are eager to learn their kids' talents. The test can cover everything, from their ability to learn languages to music appreciation, athletic ability, interpersonal skills and aptitude for mathematics.

A package of kids' talent gene testing often costs tens of thousands of yuan in China. However, "such packages can test 10 genetic loci at most, whose prices far outweigh their cost," according to experts.

In addition, the effects of kids' talents gene testing are often highly exaggerated. According to Sun Yingli, a researcher in the Beijing Institute of Genomics of the Chinese Academy of Sciences, the scientific evidence on the effectiveness of these talent gene tests is too weak to back their use.

"The reason behind unreasonable pricing of gene testing products lies in the asymmetry of information between customers and producers, since gene testing is an unknown area for most Chinese," says Zheng Qiang.

Currently, gene testing is unregulated in China without unified standards, which means companies can price their products on their own. As an emerging industry, China's gene testing industry is at a starting point in terms of pricing and regulation.