Covid-19, Single-Sourced Diagnostic Tests, and Innovation Policy

Deb, Chaarushena; Moneer, Osman; Nicholson Price, W

The United States’ disastrous response to the onset of the Covid-19 pandemic has arisen in large part by an utter failure to provide adequate diagnostic tests for the presence of SARS-CoV-2. The Centers for Disease Control were the sole testing source authorized by the Food and Drug Administration, and when the CDC failed to provide reliable tests in sufficient volume, it took weeks for other providers to be approved and to ramp up testing. Revised policies should decrease the likelihood of sole-sourcing tests in pandemic contexts, which results in a fragile system. The pandemic sole-sourcing failure, however, not only accelerated the pandemic, but also provides lessons for innovation policy about diagnostic testing more generally. Sole-sourcing hurts clinical practice by limiting confirmatory testing and systemic robustness, whether in a pandemic or in regular practice. We thus argue against relying too heavily on exclusivity-creating patents as innovation incentive for diagnostic tests—including the proposed Coons-Tillis patent reform bill which would increase patentability for many such tests. Instead, we propose the use of reformed reimbursement to create better incentives for diagnostic test innovation. In both pandemics and elsewhere, single-sourcing creates too great a point of failure, but targeted innovation policy can help