This week, we take a closer look at the development of testing kits in the response to the COVID-19 crisis.
Testing, testing, 1, 2, 3…
First, it’s worth clarifying what we mean by “testing kits”. Broadly speaking, testing for COVID-19 can be done in three ways, by using:
- sampling kits, where the sample is collected at home or in a mobile environment and sent to a lab for analysis;
- home testing, where a consumer can conduct the test and read the result at home; or
- laboratory or point-of-care testing, carried out by healthcare professionals.
Virus vs antibodies
Whether a patient is being tested for the virus itself, or the presence of antibodies, will determine which testing method is used.
Testing for the virus
This involves the use of a swab or saliva sample, and a positive test will show that the person being tested is currently infected with COVID-19. A sample can be self-administered or taken with assistance. In the EU, sampling kits that have a valid CE mark can be sold to members of the public and used by them privately.
Testing for antibodies
This test is intended to determine whether someone has previously been infected with COVID-19, and may now have antibodies against the virus. This type of test involves taking a blood sample (typically, a finger prick), and is generally performed by healthcare professionals.
Regulation of testing kits
In the EU, COVID-19 testing kits are regulated as “in vitro diagnostic devices” or “IVDs”; the definition of which includes tests performed on human samples for a medical purpose. Currently, COVID-19 tests placed on the EU market will be subject to the requirements under Directive 98/79/EC (the “IVD Directive”) (as we have blogged about previously, the new In Vitro Medical Devices Regulation (IVDR) will apply to IVDs from 26 May 2022).
Before placing a COVID-19 testing kit on the EU market, a manufacturer must ensure the device complies with essential requirements laid down in Annex I of the IVD Directive, and draw up a technical file which shows that the test is safe and performs as intended.
The EU regulatory regime draws a distinction between:
- tests that are intended for use by health professionals, where the manufacturer can complete the Declaration of Conformity and affix the CE-mark when the requirements of the IVD Directive are satisfied; and
- self-tests intended for use by consumers, which require a notified body to carry out additional verification of the technical documentation.
In the US, both active virus tests and antibody tests may follow a product or service route to market. Testing kits sent to home, points-of-care, or laboratories are in vitro diagnostic (IVD) medical devices that ordinarily require FDA 510(k) clearance or PreMarket Approval, but may currently request Emergency Use Authorization, or “EUA”, by submitting validation data meeting required specificity and sensitivity standards established by FDA. It is important to note that even once authorized under an EUA, a manufacturer of active virus or antibody testing kits must continue to monitor for FDA updates to the scope and requirements of the EUA, as several have been issued since the beginning of the pandemic emergency. Importantly, performance requirements have increased as the need for reliability in antibody testing has come to the fore. On this front, manufacturers should be mindful of performance claims and disclaimers used in the labeling and promotion of testing kits, so as not to overstate the attributes permitted under an EUA.
For laboratory service offerings in the active virus and antibody test market, the Laboratory Developed Test, or “LDT”, pathway for a high-complexity CLIA certified laboratory remains an option. In this scenario, the laboratory validates the performance characteristics of the test it performs and results must be qualified as such. The advantage of the product testing kit route to market are inherent in accessibility for patients as more tests are authorized for use at point of care or for home specimen collection.
Throughout the world, supply chains have been disrupted due to concerns related to the COVID-19 outbreak. Moreover, demand for certain medical-grade supplies has spiked, which has forced manufacturers to be creative when sourcing raw materials, and workforces have been subjected to quarantines, lockdowns, and work-from-home rules leading to complete cessation of manufacturing in significant parts of the world. As a result, manufacturers are facing increasing stress in fulfilling supply contracts.
An unfortunate, but all-too-common, issue that arises during a stressed supply chain environment is the possibility of counterfeit items being provided. From a manufacturer’s standpoint, documented diligence protocols are required to ensure that the product received is of the quality that was requested and paid for. In the US, to the extent the supplied good is not of the appropriate quality or is otherwise problematic, the most robust tool available to a manufacturer is its supply agreement. The supply agreement contains the terms defining “excusable delay” and force majeure, both of which can have significant implications on the manufacturer moving forward (both regarding its supplier as well as any downstream customers it may have). Beyond the agreement, manufacturers can look to their respective commercial code— in the US, the uniform commercial code —to explain any rights or remedies available in these atypical circumstances.
Home sampling and home testing will always bring challenges for manufacturers, as there is the potential for human error in both obtaining the sample and preserving the sample whilst it is shipped to a laboratory for analysis. In addition, there are added complications in the context of COVID-19, as many governments want to be closely involved in the testing process – which has become highly political in some European countries.
In the UK, for example, a Position Paper by the Department of Health and Social Care last month revealed that it has begun a partnership with universities, research institutes and private companies to create a “mass testing infrastructure”. Similar plans are being put forward by governments across the EU.
It is clear that these are unprecedented times, which call for a novel approach to supply chains. Many businesses, whilst willing to help the government in the distribution of testing kits, may be wondering how to balance this with a need to ship their own products, in order to keep their business afloat, and how government involvement will affect their compliance responsibilities and liability risks.
Once commercial testing kits become widely available in the EU, these are expected to be treated in the same way as any other home test kits (e.g. pregnancy tests) as a form of consumer product. Consumers will have the full complement of EU consumer rights available to them if the product is not, for example, fit for purpose or of satisfactory quality, including the potential right to a refund or a replacement product – or to pursue an action for damages. These rights are exercisable against the retailer in the first instance, who can recover subsequently against the manufacturer.
As is the case for any online goods purchased in the EU, consumers of testing kits online will also be entitled to return (unused) testing kits bought online within 14 days of delivery, a so-called “cooling off period”. This right may well be exercised by consumers whose symptoms clear in the time between ordering a testing kit and the kit arriving in their home, especially if delivery delays continue. This risks further complicating manufacturers’ supply chain issues.
In the US, from a consumer standpoint, the end product is expected to perform as advertised. But if the product is defective or unreliable, the consumer can work with its respective consumer commission, the third-party seller (to the extent one exists), or the manufacturer itself to try and resolve the issue. In the COVID-19 environment, in the US it will be very difficult to recover for any defective good absent a showing that the manufacturer acted with willful misconduct.
The European Commission has issued Guidance condemning unfair commercial practices, which includes its stance that companies should not expect to seek to excessively profit from the current COVID-19 pandemic by overpricing products through aggressive commercial practices.
In the EU, testing kits produced during COVID-19 are subject to the usual liability regimes. As will be the case for all products produced during this time, the time when the product was put into circulation will be a relevant consideration when it comes to assessing the safety which a person is entitled to expect as part of the test for whether a product is defective under the strict liability regime in the EU (Product Liability Directive). Whether the context of COVID-19 lowers or raises consumers’ expectations remains to be seen, as does the weight placed on the social utility of the supply. The time of supply, as it relates to the phase of disease control, will also likely change litigation outcomes. However, EU law does clearly provide that products will not be considered defective merely because a better product is subsequently produced. Moreover, there may be scope for arguing the Developments Risk Defence applies, where available.
In the US, testing kits designed in the wake of the COVID-19 outbreak may be protected by the U.S. PREP Act immunity, a statutory scheme that prevents any claim from proceeding against the manufacturer (and others) so long as certain criteria are met. These include, among other things, compliance with FDA guidelines, a good faith effort to produce an effective product, and coordination with a governmental entity in distributing the goods (some goods require more coordination than others). If PREP Act immunity attaches, the manufacturer has relatively low risk of being found liable, even if the testing kit does not work as reliably as advertised.
If PREP Act immunity does not attach, the manufacturer will still have the defenses that would be available to it in a non-COVID-19 world. These are far less encompassing than PREP Act immunity and it is impossible to predict how and if the defenses would serve to mitigate losses arising from the arguably defective product. This is why adherence to the PREP Act is so important for any testing kits prepared in response to COVID-19.