UK Diagnostics Industry and Covid-19 Recovery

Jim Shannon Excerpts

Tuesday 10th May 2022 Commons Chamber

[Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)]

I want to start by illustrating how important diagnostics and testing are, and nothing does that more clearly than the decision to discharge elderly people to care homes without testing. The Government’s answer that asymptomatic transmission was not understood properly does not excuse the fact that fundamental and standard infection control measures were not in place.

The Prime Minister said earlier that he wanted to create “high-wage, high-skilled jobs” that will drive economic growth across the United Kingdom. I will measure that soundbite against the Government’s performance and track record on the UK diagnostics sector. The domestic diagnostics sector should be at the vanguard of the world’s intellectual development, but the evidence does not support the Prime Minister’s claim that the Government support it. I will look at past performance in the early days of the pandemic and where we are presently as well as look to the future with the Government’s strategic plan and the opportunities that it could miss, to our shared peril.

My interest in the area is underscored by an NHS career spanning a quarter of a century in which infection control and management was a staple part of my responsibility. I understand the important elements of genomic and epidemiological surveillance. I first raised that with the chief medical officer in July 2020 and repeatedly explored testing with the right hon. Member for West Suffolk (Matt Hancock) when he was Secretary of State for Health and Social Care, focusing in particular on his exaggerated claims that lateral flow device tests were 99% accurate. My concerns have always been sincere. I am bringing my genuine clinical concerns to the Government’s attention yet again. This is not a political point, and I am not making a constitutional point, because many of the issues that I will talk about are as true north of the border as they are south of the border, and they are very serious.

There is an additional element to my interest in the case. My constituent Craig Inglis contacted me to express his concern about his investments in one of the diagnostics companies contracted by the Government to provide lateral flow devices, and he and many others watching the debate feel utterly betrayed by them because of events that I will set out in due course. The same is true of the diagnostics sector.

One insider told me:

“There is a lot of acrimony remaining, with many UK companies saying they would not respond to the UK Government if a similar crisis arose.”

Now, I do not believe that they would not. I think that they would, but the good will and trust has been severely damaged, if not completely broken.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Gentleman on bringing this issue forward. Does he not agree that the methods by which we were able to roll out the vaccine strategy, making use of public facilities and spaces, is an indication of the capacity that already exists in the NHS? Does he not agree that the focus and time given to that successful roll-out must be used to assist the NHS to address the backlog and, even better, to address its efficient operation, which we believe, and I think the hon. Gentleman also believes, can happen?

[Neale Hanvey]

I thank the hon. Gentleman for that intervention. He makes some really important points. The first point I make—and I have previously paid tribute to the chair of the Vaccine Taskforce and continue to do so—is that there were excellent strategies for the control of infection in terms of barriers, mask wearing and the like. However, a fundamental part of infection control is that we cannot pick and choose the bits we do. We have to do them all. And that has been sorely lacking when it comes to testing. It has not been robust. It has been lacklustre to say the least and it has been oversold. The hon. Gentleman’s point about the important role of diagnostics in moving the NHS forward and picking up the backlog is really important. I will touch on that very briefly at the end. This is such a huge subject that I struggle to get everything in, but the points he makes are really important.

In terms of where we started, Operation Moonshot was supposed to build domestic capacity, and there was, I think, genuine engagement with the industry. Certainly, from the conversations I had with industry and the UK Rapid Test Consortium, it was something they felt very keen to progress. However, it failed. I understand the challenge the Government faced and I understand the reasons why they went to the international market to secure lateral flow devices or any kind of tests. This is not about bad China or anything of that nature; fundamentally, it is about UK Government decision making and—I hate to say this, but it is true—profiteering in the sale of those devices.

The reliability and validity of the results of the lateral flow tests have been undermined by various different assertions. The Government’s original assertion was that

“lateral flow tests are accurate and reliable and have extremely low false positive rates”

and a specificity of at least 99.9%. However, leaked emails by the then Secretary of State’s advisor Ben Dyson cast doubt on that, estimating that as few as 2% to 10% of positive results may be accurate in places with low covid rates. The Government’s own evaluation, conducted by the University of Liverpool, found that lateral flow devices failed to detect two-fifths of positive PCR cases. They also missed a third of high viral load and highly infectious cases. Throughout that time, however, the Government were telling everyone that they were reliable, trustworthy tests that we could depend on. I recall one case where the daughter of a constituent had had multiple negative lateral flow tests and it was not until they insisted on getting a PCR test that they found out she was infected and that she had infected everyone around her. That was a mini-cluster that caused great concern.

Throughout this time, I worked with academics who have been absolutely fantastic. They wrote in the British Medical Journal and other respected journals, setting out those concerns. They are experts, but the Government at the time—I focus in particular on the then Secretary of State for Health and Social Care—did not listen to those concerns and did not modify the message.

Lord Bethell said in his infamous tweet of 15 March 2021 that Omega Diagnostics and Mologic were in line for an order of 2 million lateral flow devices per week by the end of May, promising jobs and security. Those assertions did not come to fruition. Like several companies, Omega has suffered big losses and has had to make significant changes to its operations. It had to sell its Alloa site and is looking to divest its remaining infectious disease portfolio. As part of the rapid test consortium, the UK Government committed to supporting the manufacture of lateral flow devices and other diagnostic equipment.

On 11 February 2021, Omega announced that it had agreed a contract with the UK Government. Colin King, the then chief executive officer, said:

“We are delighted to formalise our relationship with the UK Government and to utilise our lateral flow test production capacity to support the COVID-19 mass testing programme being rolled out across this country…The new financial year will see this growth opportunity realised, and will also see the full impact of COVID-19 antigen testing, and so we are likely to deliver substantial revenue growth…These are very exciting times for the business and I am delighted that we can play a part in supporting the UK Government’s national effort to control the spread of the Coronavirus.”

The Herald newspaper in Scotland had the headline, “Jobs boost as Scots firm Omega scoops up to £375 million government contract to produce ‘instant’ Covid tests”, but none of it happened. Despite those promises, significant barriers were put in place and have continued to be erected to the domestic diagnostics sector. In the case of Omega, additional manufacturing capacity was created to meet the demands of the UK Government, but they failed to deliver on the contract and promises. Instead of substantial revenue growth, the shares in Omega Diagnostics lost more than a quarter of their value when the Government pulled the rug from underneath them.

Some investors have lost substantial sums of money on the back of the UK Government’s promises and announcements on Twitter by Lord Bethell. They feel utterly betrayed, and understandably so. We have a situation where the UK Government failed to meet a commitment made in full public view and are now seeking to recover the costs of the readiness preparation for that expansion from companies such as Omega, despite them doing everything that they were asked to by the Government. The UK Government distorted the market with those decisions, so will the Minister commit to reviewing the impact of them on investors and industry?

The other side of this issue is that the domestic diagnostics sector felt completely let down, but the Department of Health and Social Care found £3.7 billion to fast-track Innova-branded lateral flow devices with an eye-watering profit margin to middle men, taking a tiny UK firm run by a property agent and a shoe retailer from being £3,500 in debt to a £20 million profit in a year. That was all facilitated by an exceptional usage authorisation from the Medicines and Healthcare products Regulatory Agency—more on that in a moment.

In contrast, UK companies have had to navigate their way through and overcome additional regulatory hurdles. The situation is best summed up by the industry body, the Association of British HealthTech Industries, which called on the UK Health Security Agency

“to remove the confusion and uncertainty surrounding the implementation of the Coronavirus Test Device Approvals process”.

The CTDA process is a hurdle that only domestic producers have to navigate. All the imported products that I have set out the problems and flaws with, from the Government’s study, have a free pass. They are not subject to CTDA; only the domestic market has to deal with that challenge. Innova and Orient Gene tests are exempted from CTDA, putting the domestic diagnostics sector at a significant disadvantage. Private feedback from the industry is that the procurement process suffers from a lack of progress, transparency and poor communication. Will the Minister say why the UK Government are purposefully disadvantaging the domestic diagnostics sector? Surely there should be a level playing field.

In the last Session, I asked the Government a simple and straightforward written parliamentary question:

“what the (a) number and (b) proportion of (i) PPE, (ii) lateral flow tests, (iii) PCR tests and (iv) other covid-19 testing equipment are that have been manufactured by UK based companies.”

The response was absolutely staggering:

“We are unable to provide the information requested for lateral flow device and polymerase chain reaction tests and other COVID-19 testing equipment as this information is commercially sensitive.”

--- Later in debate ---

[George Freeman]

The hon. Gentleman makes an important point. Sadly, I was not a Minister at the time—I would love to have been—but I do not think it is a state secret to say that there were clearly mistakes made in that national emergency. That is why there is a proper and full inquiry. He has made some important points that need to be picked up, but I do not think he would expect me to give a running commentary here on the decisions that were taken. If we cast our minds back, there was a two or three-week period when we were worried that the lack of ventilators would be the great crisis. Innovative groups all around the country were stood up as part of the national challenge to try to design ventilators, with engineers working out how to do things. All that happened in very fast order, and all sorts of issues were raised and procurements flagged that we did not need in the end. I do not think anyone would say that it was a seamless process; it was a national emergency, and there were clearly many lessons to learn.

To deal with the hon. Gentleman’s bigger points—I will perhaps pick up the specifics in detail in a written reply—as a former Life Sciences Minister, I observe that the pandemic revealed that things that we had done seven or eight years earlier in the coalition Government had paid not just the four times return on investment that is traditional in this sector, but many times over that. The truth is that the reasons we were able to sequence the virus so fast were the launching of the genomics programme, which I was proud to have led back under the coalition, the accelerated access review we put in place, the parallel approvals process with the Medicines and Healthcare products Regulatory Agency, the early access to medicines scheme, and the setting up of Vaccine Manufacturing and Innovation Centre. John Bell and I suggested in 2016 that it would be a sensible piece of foresight to invest in vaccine manufacturing, which was clearly going to change. Of course, we had no idea that a pandemic would mean that that facility would suddenly become incredibly important.

Also important was the establishment of NHS Digital. One of the lessons of the pandemic is the importance of really good data and of both national and local data sets. As a Norfolk MP, I remember being frustrated that we did not have the granularity of data or the ability to do public health by cities or districts; it was instead by big, clumsy Government regions. There are all sorts of lessons there about how an emergency requires not only national implementation and measures but the subtlety of local control, empowering local experts on the ground who are best equipped to work out how to contain and control.

I want to focus on where I can add perhaps most value in this debate and on the hon. Gentleman’s points about the importance of the diagnostics industry. One of the great lessons of the pandemic, which has absolutely been taken to the heart of Government, is that we must recognise that globalisation will drive more and more infectious disease challenges. God forbid we have another pandemic of this type, but over the past 10 or 15 years we have had zika, Ebola and covid. It is likely that we will see more such things. Hopefully they will be local or regional, but if we are not ready to contain them, we could see outbreaks of disease.

Globalisation will drive the release of new pathogens, which is why pathogen detection is one of the technologies that I am putting at the heart of our three-year plan going forward. Indeed, I am working with the chief scientific adviser Sir Patrick Vallance on how we can ensure that we harness our leadership in genomics for broader pathogen detection across animal, plant and human health and make sure that we build that network off the back of the pandemic.

The hon. Gentleman made a more specific point that in the NHS, the care system and the life sciences industry—I say this as someone who spent 15 years in the sector before coming to Parliament—diagnostics was for years the slightly poor relation. Drug discovery and the pharmaceutical sector tended to raise the big money and have the higher profile, but the pandemic revealed that diagnostics is absolutely key to getting on top of the disease. The life sciences industry is moving to recognise that if we want to deliver real value and reduce the cost of disease, which is the real key to the economy and the health system, we need to build in diagnosis much earlier. That means both the easy diagnosis—if I may call it that—of easily detectable and treatable diseases and the deeper science of longer-term diagnosis of tomorrow’s conditions.

That is why, in the update to our life sciences industrial strategy that we set out last year, we have insisted on closing the gap over the next 10 years between the traditional dichotomy in Government—the Department for Business, Energy and Industrial Strategy sponsors the research and the Department of Health and Social Care does the procurement, licensing and approvals—to try to build a much more integrated model through which we focus on diseases in places and the patient pathway and bring diagnosis, treatment and prevention together around the eight disease missions. One thing I hope and intend that that will do is put the diagnostics industry at the heart of those missions; traditionally, it has been an industry that has tended to be about the black box that sits on the hospital ward, but these days it is becoming integral to the life sciences industry and to working out how to treat, understand and detect disease. Those missions are completely key.

Let me reassure the hon. Gentleman and other colleagues here this evening by saying that we are also investing heavily, in this next phase, in the mRNA technologies that are key to the next phase of detection and diagnosis, and in new treatments. VMIC, which we set up as an academic unit to work on future vaccine manufacturing technologies, suddenly became an urgent facility for onshoring during the pandemic. I am pleased that we have transferred VMIC into the hands of Catalent, a world leader in mRNA diagnostics, therapeutics and treatments. So we have established a much more robust national supply chain in dealing with both flu and other respiratory diseases, and other pathogens. Many of the lessons have been learned, but obviously there is more to do.

We have set out in our latest life sciences vision an £8 billion commitment to research, including work with the Medical Research Council, deep research on my side of the portfolio at the Department for Business, Energy and Industrial Strategy and putting some £4.5 billion into the Department of Health and Social Care and the National Institute for Health and Care Research. The NIHR, where we are talking about £1 billion a year, is the sort of engine of research under the NHS. Crucially, we have said that, at its heart, diagnostics has to be central to that landscape. I refer not only to the detection of influenza and other respiratory pathogens, but to molecular diagnostics, biomarkers and genomic insights into disease. That is because the NHS is a huge procurer daily of blood tests for individual conditions, as the hon. Gentleman knows well. If we properly integrate that, we will be building up a database of deep expertise in biomarkers and understanding the early signals of disease, and we can harness that to make the NHS much more of a diagnostics research engine.

The dream and aim in respect of those eight disease missions is that we will be able to mobilise patients much more quickly, through digital technologies, into trials. Patients, through charities, will be able to enrol in clinical research. Using that spine of the biobank and molecular diagnostics, we can start to give industry much quicker access to the patients who are on the frontline of the conditions we need to treat.

That should drive a virtuous circle, in which we detect earlier, treat earlier and attract investment, and ultimately, as the hon. Gentleman says, we move from a paradigm where the NHS, under cost pressures, is a low-price and often late procurer to a scenario in which it does not have to be a high-price payer because it is giving industry an even more valuable thing: access to patients, charities and disease and patient consent for research. The NHS’s role in this sector is, thus, as a research engine. I have made it clear to industry that we will never, in a publicly funded healthcare system, be the highest-price payer—it would not expect us to be—but that the promise I can make it is that we will move heaven and earth to be an earlier adopter, an earlier tester and the best place in the world for it to come to test and diagnose its new treatments, and get the data on which patients they work in. Industry will then be able to use that to go around the world and sell to other countries. That is the vision of the NHS as a 21st-century research engine.

[Jim Shannon]

The Minister referred to Queen’s University Belfast, and I know he has a particular interest in being there and being involved with it. Will he indicate whether Queen’s University Belfast, or any other university in Northern Ireland, has been involved in this type of research and partnership? It is so important to take advantage of the massive amount of knowledge in the sector.

[George Freeman]

The hon. Gentleman makes an important point and invites me to signal again my support for what is going on in Northern Ireland. If we look at the cancer outcomes in Northern Ireland, the Queen’s University team that has been working on biomarkers and earlier detection has ended up driving not just investment, but much quicker and better outcomes for the people of Northern Ireland. The real power of the sector is that it delivers better healthcare for everybody within the values of the NHS, but also attracts investment and drives industry. I would go so far as to say that in the new landscape, companies such as Randox will develop affordable consumer diagnostic kits that can help drive earlier detection, building on to a digital interface. We can then support patients to get into trials earlier and drive research medicine. Belfast is on the frontline of that.