As the cliché goes, every crisis is an opportunity. The pandemic seems no exception. To be clear though: at any time, it
is quite OK to make money from working in, with or on behalf of the public health system. It is also OK to be making
money after you’ve successfully lobbied health authorities to get saliva testing included in the arsenal of the
government’s responses to the pandemic. The grey area begins if and when media campaigns that have righteously invoked
public health goals end up stampeding the Ministry of Health into making decisions that (a) don’t involve the best use
of finite health funds, largely because (b) the process has been orchestrated in ways that that don’t give equal weight
to all of the available ways of achieving the outcomes being sought.
Reportedly some NZ corporates are already lining up to use the Covid saliva test developed by the University of Illinois
at Urbana-Champaign (UIUC) and licensed locally by the NZ firm Rako Science. Yet with only a fraction of the media
attention that has devoted to the commercial efforts of Rako Science, other NZ corporates (such as Ryman Healthcare)
have for months been offering to their staff on a voluntary basis, a freely available Covid saliva test developed by
Yale University. (See details below) .
To be fair, the MoH has sometimes needed to be prodded into action. The only downside to New Zealand avoiding a Covid
disaster has been that change can be glacial. During 2020, the MoH was notoriously slow to embrace mask-wearing. It has
been just as slow to acknowledge the fact (let alone the implications for ventilation) that the virus is transmitted not
merely by droplets, but also by aerosols that don’t respect the normal rules of social distancing.
Is the lag in getting Covid saliva testing on the rails a similar case of bureaucratic inertia? No., not so much. Many
factors genuinely need to be weighed, from the relative efficacy and cost efficiencies of the competing tests, to the
adequacy of the laboratory support systems designated to process the work. However, a consensus has been emerging from
the research evidence that when Covid saliva tests are competently administered and properly processed in a
well-equipped laboratory… then truly, some of the saliva tests currently available are equally as effective as nasal
swabs at detecting Covid among otherwise asymptomatic people, and with far less discomfort.
Unfortunately, the ingredients for an informed public debate on the subject remain lacking. Which of the saliva tests is
more sensitive? Which one delivers better results and offers better value for money? What kind of trained medical
personnel need to administer these tests, and what level of laboratory excellence is needed to create a reliable
processing network? In the meantime, a politicised media campaign has framed the issue as being one where MoH is
(allegedly) dragging its feet over adopting the particular saliva test that is being promoted by Rako Science.
Before the MoH makes any final decision about Covid saliva testing, it would be helpful to know what cost-per-test price
schedule Rako Science has in mind. This is important public information, since the cost of the basic ingredients of a
Covid saliva seem to be mall, while the lab/staffing/processing overheads can be quite large. In other words, there is a
lot of backroom potential for jacking up the price. Taxpayers and shareholders alike have a stake in knowing what
genuine costs they may be facing. (Nasal swabs are not a cheap option, either.)
Since some advocates of saliva testing (like Judith Collins) have been suggesting that daily saliva tests are desirable,
one has to wonder whether that degree of regular testing would serve valid health purposes, or mainly maximise the
potential commercial gain for the licensees. After all, the highly successful NBA use of saliva testing reportedly tests
only on a once every two days basis. However, the new Covid variants do seem to increase the viral load at a more rapid
rate. So, a case can be made for daily testing.
To try and shed light on the cost outlook, I asked Rako Science representatives for information about (a) how Rako
thought its test differed from the Yale test (b) what it proposes to charge per test and (c) whether the charging system
being envisaged would be offering different rates for corporates, small firms, state schools and public hospitals.
Pricing matters, I was told in reply, were ‘commercially sensitive’, and if I wanted information on how the UIUC test
differed from the Yale test, I should contact Illinois U. Fortunately, a few clues are publicly available as to what the
ballpark amounts may be, if we choose to go down the UIUC/Rako Science road.
The saliva test developed by UIUC has received $US 20 million in federal stimulus subsidies to date, to enable it to
deliver its saliva test to 12 public universities in Illinois. Beyond that point, the Chicago Tribune ( January 5, 2021 described the UIUC price structure for its Covid saliva test
in these terms:
If universities need more, they can buy tests for $20, and additional subsidies might be made available, [UIUC spokesman
Ben] Taylor said. The tests are also being sold to public school districts for $20 each, to some private universities
for $25 and to companies for $30. Prices vary for customers out of state. [All prices cited are in US dollars.]
So: that’s the ballpark price per test, and UIUC has been offering a ladder of pricing according to the size and
location of the corporates, and depending on whether its customers are operating in the public or private sectors. As an
international licensee, Rako Science will presumably be towards the top end of this scale, even before adding its own
margins for the licensing, and for the costs related to the local gathering and lab processing of saliva samples.
Obviously, securing volumes of the work will be crucial. Elsewhere, in this detailed history of its Covid saliva test,
UIUC said that its (heavily subsidised) product averaged out at about $US20-30 per test, even though the cost of the
test ingredients comprised only between one half to one third of that amount.
Each individual test requires just $US10 of reagents…“Even though the test is cheaper than any comparable PCR test, it
is still expensive…. To set up a system like this, you need a complex laboratory, staffing, and collection sites
everywhere, and it all has to be done within a few hours to be effective. It takes a lot of logistical support and a lot
of financial support as well.”
To repeat: there has been no transparency about how similar cost factors would play out in the New Zealand context.
That’s unfortunate. By contrast, Yale School of Public Health has done (and continues to do) much of the pioneering
research in this field. Yale has trademarked its SalivaDirect
test to deter copycats. But unlike UIUC, Yale has chosen not to monetise its research. The Yale team’s academic
findings have been published in the New England Journal of Medicine, and that work is available here
, while the subsequent correspondence is available here
The protocols for SalivaDirect received emergency use authorisation (EUA) from the US Food and Drug Administration back in mid-August 2020
. Again by contrast, UIUC reportedly applied for an EUA only in late December/early January and – see the Chicago Tribune story linked above – even EUA approval does not seem to have been given by the FDA, as yet. So if our own authorisation
process puts any weight on how the American FDA has handled this essentially American medical product thus far, it seems
quite clear which test is currently out in front. Meanwhile back in New Zealand, the likes of Ryman Healthcare have been
working for the past six months in tandem with Hill Laboratories, with Ryman offering voluntary Covid saliva testing to
staff at some of its retirement villages for several months
Hill Laboratories CEO Dr Jonathan Hill confirmed to me that it has been using Yale’s SalivaDirect test. The company
employs about 450 people nationwide. Hill explained. While the basic ingredients of each test may have a “marginal cost”
of only about $NZ10, he said, the overheads of staffing and running the modern laboratory operation would require
economics of scale – in the form of large volumes of work, in order to contain those costs. Hill added that his company
had decided back in August/September last year to keep a low profile on the saliva testing issue because it had become
such a “political space.” As Hill has explained elsewhere
"While roughly equivalent in terms of accuracy and sensitivity to the current nasopharyngeal swab PCR methodology being
widely employed in New Zealand, the primary advantage of the new SalivaDirect methodology is that it tests saliva,
rather than nasopharyngeal swabs," Hill said.
The method of sample collection, Hill pointed out, can be done non-invasively, and (in his view) without the requirement
for trained sample collection personnel wearing PPE. Arguably, all these factors do make saliva testing an affordable
way of conducting regular, pro-active screening of asymptomatic staff working in our border security, managed isolation
and frontline medical care facilities.
Rako Science has announced they will be partnering with Analytica Laboratories to conduct their tests. Shortly, MoH is
expected to announce its official stance on Covid saliva testing. It seems likely to initially classify saliva testing
as being an adjunct to nasal swab testing – and depending on the results, perhaps as an eventual replacement for it.
Presumably, before announcing this decision, MoH will have done at least some evaluation of which of the competing US
saliva tests and which of the competing local laboratory networks offers the optimal fit for the New Zealand context.
Currently, the pressing question is whether any New Zealand laboratory – Analytica? Hill Laboratories? – has already done a comparative evaluation of the Yale and UIUC
tests and found out which one is the more sensitive test, and is therefore more capable of delivering reliably accurate
outcomes, That information should be in the public domain, regardless of any commercial sensitivities by the firms
jockeying for the work.Calling Yale
There are wider ethical dimensions to the saliva testing issue. Over the past 30 years, the West’s leading public
universities have all gone through a funding crisis that has put the traditional role of the tertiary sector – to teach
and to carry out research for the public good – under severe strain. As a result, modern universities can sometimes look
more like the research arms of major corporates. Academia’s relationship with Big Pharma has been particularly fraught.
The saliva testing options available to New Zealand reflect these diverging paths quite starkly. The small medical team
at Yale that pioneered the research in this field (and developed SalivaDirect) is co-led by a New Zealander, Anne
Wyllie. By email, Dr. Wyllie explained to me the ethos that continues to guide her team’s work at Yale.
Wyllie: “We set out to develop SalivaDirect to make testing accessible. We have always hated how much some people are
charging for tests – saliva tests here are still often $100-150 when the cost of reagents are a fraction of that. We
removed RNA extraction to make it even cheaper with that hope that at least some labs would align with our mission and
pass on these costs savings to others. We have never wanted to monetize SalivaDirect, knowing that anything we charge
anyone will be costs that are then passed onto consumers. We had considered making some starter packs to help get labs
up and running, but even with that, we did not want to have any funds coming to us that might detract from our mission.
Sadly, there are many people very much taking advantage of this situation and making their fortunes from the misfortune
So how, in her view, does the Yale test differ from the UIUC test ? Wyllie: “We differ to UIUC in reagents - we were
also determined to make our test supplier agnostic so that labs could utilize their existing supply chains, which often
come with discounts and so labs could also use the instruments they already had in place, without having to buy or order
new ones, which would add more pressure to supply chains, or again, mean more costs that have to be passed onto
patients. With this, we have labs offering the test for $15, $25 - we have one lab doing free tests as their other tests
supplement the low cost of SalivaDirect. Some labs have said their base price all up is $6-10 but they do need to
account for their investment to get started. However, there are still also those in this for the money so are charging
$59, $65 or even $100 for this test.”
Yale’s UEA approval of its protocol (granted, as mentioned, by the FDA last August) is freely available for any
laboratory to use. “Our EUA is available for any lab in the US who wants it and we have had some major reference labs
come apply for designation. We have had our protocol publicly available since June, which others can use for research,
or those outside of the US can use. I am also always very happy to talk to others around the world and see what can be
done to help them implement testing.
In Wyllie’s opinion, New Zealand needs saliva Covid saliva testing, while (potentially) saving on costs. “I was shocked by how much it costs the [NZ]
healthcare system to pay for healthcare workers to just collect the swab. I am frustrated that New Zealand has had all
this time, but without the same pressure as the rest of the world, it hasn't made the same progress those under pressure
were forced to [make]. “More info on the Yale test is available here
.About Rako Science
Obviously, Rako Science is a business, and not a public health service. As mentioned at the outset, it is entirely
legitimate for Rako Science to make money from providing a service to the public health system. Many companies do. It is
up to the MoH to evaluate the utility and the cost effectiveness of the rival saliva tests on offer, and to indicate
whether comparable (or better) options are available, at a valid price. As with vaccines, there may be room in the
market for many varieties, optimised for differing needs arising from factors like age, gender and ethnicity. But these
decisions cannot be left to the market, especially given that the market is so totally opaque at present. (People can
only make rational market decisions when the pricing of the inputs is transparent.) Routinely, the “commercial
sensitivity” excuse is used to ensure the public learns about the basis for key decisions only after they have been made
- and sometimes, not even then.
Rako Science is a Wellington based company headed by Leon Grice and Stephen Grice, with businessman/philanthropist Sean
Colgan listed as a shareholder. On his LinkedIn profile, Leon Grice says he has been Executive Director of Rako Science
since October 2020. For the past 20 years, he has been a founder/director of CloseAssociate, also a major Rako Science
shareholder. Interestingly, Grice also says he was an Advisor to the New Zealand Government’s Covid-19 Operations
Command Centre between the March and August months of 2020.
To some observers, it might seem… unusual for an advisor to the government’s pandemic response to become (within months) the vendor of a potential key element in
that response. At the least, there would be a benefit to Rako Science from knowing the familiar faces it might need to
lobby. In a small country like New Zealand, these sort of costume changes and networking advantages do crop up from time
to time. Famously in the early 90s, Fay Richwhite went from being an adviser on NZ Rail Ltd to being its eventual
purchaser, as the major shareholder in the consortium known as TranzRail. It can be not a good look.
Commercial ends may be legitimate, but any profiteering though, eventually becomes a cost to the consumer – either
directly, or as scarce health funds are diverted from other areas of unmet need, unnecessarily. At the end of the day,
we all have to ensure that the most affordable, most sensitive, and most reliable form of Covid saliva testing gets
adopted in New Zealand. This shouldn’t be the product of media stereotypes about foot-dragging by the bureaucracy, and
the depiction of one particular provider as a white knight.
Footnote: Yale makes some interesting points in its commentary on SalivaDirect, on the need for top class labs to do the work.
It’s important to note, say the researchers, that SalivaDirect can be processed only in designated high-complexity [
Clinical Laboratory improvement Amendement]certified labs, which must meet strict quality standards set by federal
The MoH needs to ensure the NZ labs involved in such work will be equipped to similar standards. As mentioned, one of
the arguments in favour of saliva testing is that the essential ingredients cost less than those required for nasal
swabbing. Here’s the Yale backgrounder on SalivaDirect again:
… The reagents (the substances used in chemical analysis) are inexpensive, costing anywhere between $1.29 to $4.30 per
test under current pricing. This cost is expected to further drop with large-volume purchases and the use of robotics
for high-volume automated testing. SalivaDirect also does not require expensive tubes containing special preservatives
to collect your saliva sample, which further reduces costs.Bad old Yale
Follow the money back far enough and you can discover that today’s good deeds may have trickled down over the centuries
rom some pretty dark places. As this column has mentioned before
, Yale’s founding donor Eli Yale was not one of the good guys
. In fact, Yale owes its genesis and its name to a guy who made his fortune in the slave trade. To compound the crime,
here’s the “Yale Fight Song” which clearly, was one of Cole Porter’s lesser works. All together now: “Bulldogs!
Bulldogs! Bow wow wow! Eli Yale ! “