Ministry of Health officials refused to consider approving alternative Covid PCR testing technology – despite repeated warning our labs would get swamped in a Covid surge. They ignored many offers – until it was too late.
Paul Pickering knows a lot about PCR testing. For the best part of a decade in the 2000s Pickering, who has a PhD in biochemical engineering and an MBA from Harvard, worked in the US for the market leader company in the PCR (polymerase chain reaction) genetic testing space.
Later, settled in New Zealand with his Kiwi wife, it made sense to hook up with the University of Otago’s Centre for Innovation to develop and commercialise its mobile, real-time PCR testing technology.
His company, Ubiquitome, which is 20 percent owned by Otago Innovation, was launched in 2014. In the early months of the pandemic it received more than half a million dollars in development funding from MBIE’s Covid Innovation Accelerator fund and more than $2 million from a similar fund set up in the US to advance Covid-19 testing technology.
“We were primed and ready [with the testing technology], and the MBIE and US funding allowed us to get meaty Covid work going,” Pickering says.
“We developed a hand-held device and the app that supports it, and we are contract manufacturing it here in [the Auckland suburb of] Rosedale, with sales overseas and a growing group of organisations including Napier Port, Winston Pulp International, Endoscopy Auckland and Te Whānau O Waipareira using it to test for Covid variants.”
The lab-in-a-box Liberty 16 device can be deployed at a company, school, hospital, marae or even an apple orchard, Pickering says, and run up to 30 saliva PCR tests at a time. Results come back within 90 minutes and can be sent to a mobile phone through the Ubiquitome app. One unit and the associated lab materials costs around $10,000, although it’s cheaper if you buy more units.
The technology has ISO international quality certification, and US FDA (Food and Drug Administration) approval. Ubiquitome has a partnership with the Yale School of Public Health. It has the effectiveness of a PCR test, with the flexibility of a rapid antigen test, Pickering says.
And it’s not available for use in New Zealand – at least not officially.
“We went to the Ministry of Health in 2020 and said ‘The New Zealand Government funded this, it was extraordinarily prescient, and it’s ready and working for you.’ The feedback was along the lines of: ‘We don’t have time, we are too busy, we are focusing on the Covid response.”
So Pickering tried again – and again.
“Basically it’s been a series of delays, trying to look the other way, perhaps hoping we would just go away.”
The organisations like Napier Port that are using Liberty 16 are doing so in a kind of grey zone – not approved, but not exactly banned, Pickering says. Desperate for a way to take control of their own testing in an increasingly slow and chaotic system, they set up their own structure using Ubiquitome’s proven but unapproved (in New Zealand) technology.
Operating in the grey zone
“As soon as we knew Napier Port was using the technology at scale we onboarded it and trialled it for three months, and it’s excellent,” says John Tamihere, chief executive of urban Māori development trust Te Whānau O Waipareira, which offers services in health, education, justice and social services.
“With our 10 units we can go 24/7 and return answers to 240 people in three hours. We can supply saliva testing to our elders, to people on blood thinners, to anyone anxious [about nasal swabs] or mentally unwell. The beauty of it is a PCR test, which is well in advance of RATs [rapid antigen tests].
“We’ve been able to cross-correlate with simultaneous saliva tests through Rako Science and with [ministry-approved] nasal swabbing and the efficiency is as good as with the other two,” Tamihere says.
“The state system is shocking, and we needed something urgently, so the Liberty 16 has been used to great effect, with 17 positives picked up as of last week.”
Tamihere believes if the Government had approved Ubiquitome and other PCR tests earlier in the pandemic, New Zealand would not be in a situation where rapid antigen tests – which the ministry for months refused to allow to be used because they are not as reliable as PCR tests – were being used as a one-off diagnostic tool.
“A lot of organisations would have deployed the Ubiquitome devices. They are mobile, so schools could have used them and testing could have been done by admin staff on teachers and kids.
“We could have been in a better place in terms of transmission and PCR testing.”
It makes no sense, Pickering says.
“Maybe it was just too hard for the Ministry of Health. I wish I knew how it works.”
Ubiquitome is not alone in that wish.
Sir Ian Taylor is the outspoken founder of internationally-renowned computer animation company Animation Research Limited, and has been active in the private sector’s push for the Government to adopt new Covid technology, and speed up the safe opening of the borders.
In 2020, Taylor was approached by a Silicon Valley-based company, Lucira Health, which had developed a hand-held, single use PCR testing kit which it thought the New Zealand Government might be interested in adding to its testing arsenal.
At that time, the idea was it could potentially be used for testing arriving passengers at Auckland Airport; in November 2020 Lucira became the first FDA-authorised Covid test for self-testing at home.
Lucira’s chief executive Erik Engelson is American, but also a Kiwiphile – he’s owned a property in New Zealand for 20 years. He approached the Ministry of Health with naive optimism, Taylor says.
“He assumed they would be open to new ideas. It’s FDA-approved, it takes 30 minutes and you can do it yourself. Like a lab in your hand.”
Engelson sent a short email to the Ministry’s Covid-19 response team in July 2020 and got a response from Lizzie.
Thanks but no thanks. Don’t call us, we’ll call you. Goodbye.
Nobody ever did contact Lucira, Taylor says, and although the company followed up and the product was adopted in other countries, there was never interest from New Zealand.
The saliva testing farce
And what of those “large number of testing methods and protocols” that Lizzie assured Lucira Health were being examined “to determine their reliability and appropriateness”? Newsroom understands only one – the one used when people turn up at a testing station – has ever been approved for general public use.
Rako Science, a New Zealand owned and operated company offering accurate saliva-based PCR Covid testing to many private sector businesses including Genesis Energy and Fisher & Paykel Healthcare, has never been able to get the Ministry of Health to consider using its tests.
In fact the Government went so far as to tell Rako not to maintain any extra testing capacity for the Government as its services would not be needed, as New Zealand Initiative chief economist Dr Eric Crampton reported in this Newsroom story.
“We should never have committed to just one test, ever. We should have been saying ‘Which are the tests to back up the one we have?’ But we never did.”
Sir Ian Taylor, Animation Research Ltd
When in the middle of last year the ministry decided it wanted to start using saliva testing, it awarded the up to $60 million contract to existing supplier APHG in a tender process slammed by the Auditor General for being riddled with conflicts of interest and flawed procurement processes.
While the Rako tests had been rigorously tested and validated, the APHG saliva tests had not, Stuff journalist Dileepa Fonseka reported at the time.
In the biggest irony of that sorry tale, Newsroom understands APHG never got its saliva testing off the ground in any significant way – another wasted opportunity.
Meanwhile, rapid antigen tests were also banned until October last year, despite businesses begging to be allowed to import them.
It makes Taylor furious.
“We should never have committed to just one test, ever. We should have been saying ‘Which are the tests to back up the one we have?’ But we never did.”
The ministry had a year and a half to do something about it, Taylor says. “It would have been a game-changer.”
“We are continually adapting our response”
So why did the Government not approve a wide range of highly-credible tests, Newsroom asked the Ministry of Health. A statement from an unnamed spokesperson told us what we already knew, that “our public health response is currently using Rapid Antigen Tests (RATs) as the primary testing tool.
“However, we regularly review emerging testing options to make sure we are continually adapting our response,” the statement said.
Rapid PCR tests were used in New Zealand “where it [sic] has been validated and included in the scope of their accreditation” the spokesperson continued. This includes “DHB hospitals using rapid PCR for risk triage at emergency departments and surgical units, among other uses”.
The ministry confirmed “Ubiquitome had received $528,927 funding through [MBIE’s] Covid-19 Innovation Acceleration Fund (CIAF) in April 2020 to fast-track community deployment of its mobile real-time PCR system (the Liberty 16) and cloud enabled reporting software to provide rapid PCR test results for COVID-19”, but didn’t answer the question about why technology funded by one ministry had never been adopted by another.
Iain Cossar, general manager science, innovation and international for the Ministry of Business, Innovation and Employment, told Newsroom changes were needed.
“MBIE recognises providing a clear regulatory pathway for companies seeking to develop innovative products is important. We have been working closely with the Ministry of Health to design a regulatory approach which makes space for innovative products while ensuring the health and safety of New Zealanders.”
While MBIE couldn’t advocate for individual businesses on particularly regulatory decisions, Cossar said, it could provide support for high-tech businesses through Callaghan Innovation.
“Callaghan Innovation is working actively with Ubiquitome and other businesses to help them navigate the new regulatory pathway.”
Pickering says his company has done okay over the past 18 months – but growth could have been “orders of magnitude” stronger with Ministry of Health approval.
“When we go overseas for export, the first question is ‘Tell us who’s using it in New Zealand’. And when they ask is it approved here, we have to say ‘no’.
“It’s definitely hurt our growth in terms of the global market.”
A potential conflict of interest
So who is the lucky company with a virtual monopoly on Covid PCR testing?
New Zealand-based Asia Pacific Healthcare Group (APHG) is fully-owned by NZ Healthcare Investments Ltd, which is 48 percent owned by the NZ Super Fund, the government investment company helping fund our future pension needs. The other big shareholder, also with 48 percent, is a Canadian company which goes by the name of 2767640 Ontario Ltd.
No one says APHG testing isn’t world class – it is. “Gold standard”, as the Government often says. The problem is that a testing regime stops being remotely gold standard when waiting times for a result stretch out five or even eight days.
So why has the ministry been unwilling to approve anyone except APHG?
Asked by the NZ Herald in July last year about a potential conflict of interest arising from one government ministry awarding the saliva testing contract (or indeed the main PCR contract) to a company almost 50 percent owned by another Government entity, the Ministry of Health denied any problems.
“The successful tenderer was appointed after a comprehensive process, which followed Government procurement processes and included independent evaluation of proposals by panel members from across the testing sector,” a spokesperson said.
Just a few months later the damning Auditor General’s report confirmed there were indeed unresolved conflicts of interest and other problems in the tender process.
The Murdoch review
In October 2021, the Covid-19 Technical Testing Advisory Group, led by University of Otago infectious disease expert and now Vice-Chancellor, Professor David Murdoch set out to check the country’s Covid testing regime was fit for purpose as New Zealand moved from its elimination strategy to widespread community transmission.
The verdict: the Ministry had been too slow to adopt rapid testing, too slow to adopt saliva testing, and too slow to bring in rapid antigen testing.
“Common themes from the review included the need for better future planning, reduction in silos, a scenario-based testing strategy to help laboratories with planning, a clearer process for accreditation and adoption of new tests; and the urgent need for connection with innovators in the community in order to co-design and implement the testing strategy,” the report said.
“Key recommendations include a clearly articulated and communicated future-focused Covid-19 testing strategy to assist planning; strengthening the leadership in the testing space within the Ministry of Health; and the creation of a dedicated testing approach to facilitate innovation and the implementation of new tests and testing strategies in a timely fashion.”
The recommendations look much more like what happened in the US, particularly around the connection with innovative technology, Paul Pickering says.
“We had technology validated and sitting there. It’s staggering that two years later we are still stuck in the waiting room, admittedly though it’s a different waiting room.
“It blows the mind and really serves to illustrate the disconnect between what New Zealand does from an innovation standpoint and our ability – or inability – to adopt that innovation.”
A slow road
As a response to the Murdoch report, the Ministry of Health announced a new testing strategy in late November, although to the untrained eye it looks much like the old one, albeit with the addition of RAT tests used as a first step before positive results being confirmed by a PCR.
The “creation of a dedicated testing approach to facilitate innovation and the implementation of new tests and testing strategies in a timely fashion” did not appear high on the agenda.
Then sometime before February 21, the November testing strategy disappeared from the ministry’s website, replaced by, well, nothing, as Newsroom reported earlier this week.
However, something has changed behind the scenes at least.
Ironically, more than five months after the Murdoch review, and as most of us stop even thinking about a PCR test if we get sick, the Ministry of Health has opened a pathway to approval for companies like Ubiquitome, Rako or Lucira to provide testing.
On February 21, applications for exemptions to the ministry’s ban on alternative testing opened, and Pickering says Ubiquitome got its documents in within a few hours. Ten days later it heard back from the ministry – and the message was utterly familiar – your request has been received, but sorry guys, we are a bit swamped right now.
The notification told them approval could take 25 days or longer.
The Ministry of Health spokesperson wasn’t able to tell Newsroom when approvals might come through.
“Ubiquitome applied for exemption on 21 February 2022. We are processing applications in the order they were received.
“Due to commercial sensitivities, we don’t reveal where individual applications are at.”
Paul Pickering reckons behind-the-scenes lobbying from other agencies has been critical to even getting this far. He says MBIE and Callaghan have both been “trying to move the ball forward – and continue to do so.
“It it weren’t for MBIE I don’t think this exemption pathway would have appeared.”
Calls for a Royal Commission investigation
The pressure is mounting for an investigation into Ministry of Health procurement, including testing technology.
Ian Taylor says the ministry was incapable of being innovative and flexible and that put people and businesses at risk.
“If we had been innovative, and thought about the technology that was available, we would not be in a situation where Covid is rampant and we can’t test. The Government was complacent.”
Ian Taylor, Animation Research Ltd
“This was a health and safety issue for everyone. In business we have a responsibility to our staff. The Government took it off us in the case of Omicron and they are guilty of not delivering the tools we needed to look after people’s health and safety.
“As a company, if those tools were available and we didn’t use them, we’d be in court.”
He wants a Royal Commission of inquiry – “once all this is over”.
“This was the easiest country to protect. If we had been innovative, and thought about the technology that was available, we would not be in a situation where Covid is rampant and we can’t test.
“The Government was complacent.”
John Tamihere is also calling for an inquiry – maybe not this year, but next.
“One of the biggest problems New Zealand faces is the inability of bureaucrats to deploy appropriate and fringe solutions. We have a new era in our country, where local solutions for local problems are coming to fruition. But the Ministry of Health is still wired for the industrial age.
“It’s all about control, not about what works.”
Taylor says for every company willing to stand up publicly about Ministry of Health procurement processes – Rako, Ubiquitome, Orion Health – there are dozens where executives are too frightened to come forward because they are worried if they criticise the Government they will be blocked from any future contracts.
Newsroom has been in contact for several months with a local health industry manufacturer who nearly lost his business during the pandemic after being promised a contract by the Ministry of Health – only to be shut out when the deal was awarded to a big overseas firm.
The company is indeed too frightened to have its story appear in the media for fear of retribution from government officials.
“We are still playing catch-up”
National’s Covid response spokesperson Chris Bishop says the country needs answers on many aspects of the testing regime, including why it took so long to bring RAT tests in, why the Government requisitioned RAT tests from companies and then denied they had done so, and why we didn’t adopt other PCR testing technologies until too late.
Bishop says an investigation in September 2020 into Covid testing chaired by Heather Simpson and Sir Brian Roche concluded our current response model wouldn’t be fit for purpose over the next months or years of the pandemic. The authors expressed concern at how difficult it was for other agencies to be heard by the Ministry of Health; high level papers went to Cabinet with “little evidence of input from outside health,” they said.
“That should not be happening.”
“Each time the ministry says it’s learnt its lessons and will do things differently next time, and then they don’t.”
Chris Bishop, National’s Covid response spokesperson
Bishop says if high-quality saliva and other PCR tests had been adopted urgently at that time, as recommended in the report, it could have helped reduce the huge queues at testing stations at the beginning of the Delta outbreak in August last year and the collapse of PCR testing with Omicron.
“It goes back to the adoption of the elimination strategy. The Government didn’t develop a back-up plan in case elimination failed until it was too late.
“We are still playing catch-up.”
Bishop says there were plenty of people – including David Murdoch, Heather Simpson and Sir Brian Roche – pointing out failings around our testing regime, but the Government wouldn’t listen.
“They’ve not been able to get the Government to take the criticisms seriously. Each time the ministry says it’s learnt its lessons and will do things differently next time, and then they don’t. “And here we are.”