John Lubbock investigates why domestic lateral flow test manufacturers are still being left out in the cold by the Government

At least £980 million worth of lateral flow tests (LFTs) were ordered in the last four months of 2021 from companies that rely heavily on Chinese supply chains, an investigation of Government contracts by the Byline Intelligence Team has revealed. 

Such reliance on Chinese-made testing kits, despite it being more than two years since COVID-19 first emerged in Wuhan, raises questions about why the UK appears to be reluctant to support the production of domestically-produced LFTs – with opposition MPs accusing the Government of “stifling” British manufacturers.

In December 2021, at the height of the Omicron wave, there was a national shortage of LFTs – the home-applied tests that form a core part of the national ‘Test and Trace’ system. In response, the Government spent hundreds of millions on lateral flow tests over the New Year from foreign firms, which use foreign production lines, to meet an “urgent and unforeseeable” demand – despite the fact that UK-manufactured LFTs have been readily available for more than a year. 

One company awarded at least £752 million in three new testing contracts in December 2021, for instance, was Innova Medical Group. Innova was already the single-biggest winner of UK Government contracts during the Coronavirus pandemic. Innova is an American company and its tests are almost entirely produced in China. 

These newly-awarded contracts take Innova’s total income to £4.5 billion from the UK Government during the crisis – equivalent to the 2020 budgets of the Department for Environment, Food and Rural Affairs (£2.1 billion) and the Foreign Office (£2.4 billion) combined.

Due to commercial confidentiality, it is not possible to find out how many LFTs the UK has bought from Innova.

Such an over-reliance on a single company, though, raises concerns about supply chain integrity.

In March 2021, Innova was forced to recall almost 80,000 tests in the US due to a “risk of false test results”. The Food and Drug Administration issued a statement “warning the public to stop using the Innova Medical Group… test for diagnostic use”, adding that it had “significant concerns that the performance of the test has not been adequately established, presenting a risk to health”.

Despite such concerns, following a June 2021 review by the UK Medicines and Healthcare Products Regulatory Agency (MHRA), the UK Government decided to continue sourcing LFTs from Innova.

Although it is not known how much Innova has made in profits on its UK contracts (private US companies do not have to file public accounts), Dr Charles Huang, CEO of Pasaca Capital, which owns Innova, donated considerable amounts of money to external causes in 2021.

In September, the University of Strathclyde announced that it had received its largest ever donation from an individual. £30 million of this £50 million gift to the university will go towards a new building named after Dr Huang. Dr Huang has also donated $40 million to Wuhan University, in the city where he was born and grew up. A news item paid for by the Charles Huang Foundation said that the money, “will be used to support six programmes named after Innova Medical Group Inc and Pasaca Capital”.

Innova’s lucrative contracts have also helped one British firm. Disruptive Nanotechnology, which was in debt at the end of 2019, made profits of £20.5 million last year, helping to secure Innova’s LFT contracts.


The Domestic Market

Some argue that such shortages could be averted if there was a greater plurality of supply options of LFTs, including sourcing the testing kits from British supplies.

Professor Prashant Yadav, a supply chain expert at INSEAD, told Byline Times that “building resilience in the supply chain for rapid tests is extremely important” and that “while resilience doesn’t mean having all of rapid test production in the UK, a better balancing of supply is definitely needed”.

“In the short-term it may be seductive for a government procurement team to buy from manufacturers with large capacity who can supply quickly, but that loses track of the medium/long term objectives of building a sustainable manufacturing base,” he added.

Despite such calls to action, a number of UK-based companies that were given funding by the Government to produce LFTs have faced hurdles in getting their products accredited.

The Government’s scientific laboratory at Porton Down has refused to accredit an LFT produced by UK company Mologic, for instance, saying that its LFT had failed its tests. 

Professor Sanjeev Krishna, of St George’s University of London and a consultant to Mologic, said of the rejected tests: “If Porton Down couldn’t get [them] to work then we need a powerful spotlight on this… what are the procedures, how are they being done?”

“What we’re seeing here,” Professor Krishna added, “is some process which is at variance with international processes to passing these tests.”

Opposition MPs who talked to Byline Times also criticised the Government’s inaction on the domestic production of COVID tests.

Liberal Democrat Deputy Leader Daisy Cooper said that “it’s deeply concerning that UK manufacturers may have been overlooked when the Government was handing out large contracts”.

“It becomes clearer every day that we need a truly independent inquiry into the Government’s handling of the pandemic, right now,” the MP added.

Meanwhile, Labour MP Florence Eshalomi said: “It’s two years since the pandemic began and it is unacceptable that the Government is stifling the ability for British manufacturers to support testing. Labour will work with British manufacturers to make sure we always have a supply of tests when we need them.”

A UK Health Security Agency spokesperson told Byline Times: “All tests used by the UK Government must go through a rigorous validation process to ensure they are highly effective at detecting people who are infectious with COVID-19. Manufacturers that are unsuccessful in completing the validation process are not eligible for procurement but we remain committed to supporting British manufacturers and suppliers, wherever possible.”

Innova did not reply to Byline Times’ request for comment.

This article was produced by the Byline Intelligence Team – a collaborative investigative project formed by Byline Times with The Citizens. If you would like to find out more about the Intelligence Team and how to fund its work, click on the button below.

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