The population is believed to be very homogeneous genetically, which should make it easier to narrow down the search for genes that cause disease.
DeCODE, a private company involved in genetic research, has been granted access to the medical records of Iceland's 277,000 people.
Critics within the Icelandic Medical Association felt the law permitting the database, passed by Prime Minister David Oddsson's ruling Conservatives, trampled human rights.
Many argued the 1998 legislation violated international conventions on medical research involving human subjects. Iceland's citizens had to opt out, rather than choose to participate, in the deCODE database. More than 5 percent of the population has taken advantage of the opportunity to exclude themselves.
In a joint statement Monday, the Icelandic Medical Association and deCODE said that if genetic information from patients had already been collected on a Health Sector Database and the individual wished to remove that information, "it shall be done immediately" and the cost would be paid by deCODE.
Both deCODE and the medical association also agreed that when the World Medical Association - which promotes medical ethics - issues its policy on health databases, that policy would be regarded as guidelines for the Icelandic project. If necessary, both deCODE and the medical association would urge amendments to the Icelandic law to "ensure the law's conformity with these rules," the statement said.
The Icelandic Medical Association and deCODE also agreed to urge all Icelandic physicians to honor the agreement, signed by the biotech company's founder Kari Stefansson, and Dr. Sigurdur Gudmundsson, medical director of the Icelandic Medical Association.
The joint statement said the two groups were "very pleased that an agreement has been reached and hope that the mutual trust reflected in the joint statement will continue to guide their approach to all future matters of common importance."
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