Call for evidence outcome

UK market for COVID-19 detection devices: call for evidence

Updated 22 August 2022

This was published under the 2019 to 2022 Johnson Conservative government

Respond to the call for evidence by downloading the UK market for COVID-19 detection devices: call for evidence template in OpenDocument (ODT) or MS Word Document format.

Fill in your responses to the questions and email the form to validation@dhsc.gov.uk.

Read the background on the policy and legislation in this document and use the questions here only for reference. This is not an online form.

Executive summary

On 28 July 2021, legislation came into force which introduced validation for antigen and molecular coronavirus (COVID-19) detection tests. The statutory instrument made under the Medicines and Medical Devices Act 2021 requires antigen and molecular COVID-19 tests to undergo mandatory desktop review to assess their performance before being permitted for sale on the UK market.

The government also intends to introduce a second statutory instrument in the autumn which will add mandatory laboratory validation to the current desktop review for COVID-19 tests. This will ensure that any COVID-19 test on the UK market meets a minimum standard – the same standards as those met by COVID-19 tests procured for the NHS.

This call for evidence aims to support our understanding of the wider internal market, individual business and trade flow impacts underpinning the government’s policy on introducing mandatory validation for antigen and molecular COVID-19 detection tests. This will be reflected in the next iteration of the economic impact assessment for this policy.

The impact assessment is a crucial part of the policy development process and considers the likely impacts that different policy options may have based on the evidence available. To ensure the impact assessment we complete includes the best possible research and evidence available, we are inviting stakeholders to submit evidence on some key areas.

See the current iteration impact assessment.

In addition to this call for evidence, we will also launch a full public consultation which will seek views on the government’s proposals to introduce mandatory laboratory validation for COVID-19 detection tests. Respondents are welcome to respond to both documents, however please note that the call for evidence is more targeted on obtaining specific evidence in relation to businesses operating in the COVID-19 diagnostics market, whereas the consultation will more broadly seek views on the government’s proposals to introduce laboratory validation.

In this call for evidence, we are seeking evidence and opinions on the following areas:

• costs for individual businesses involved in the domestic COVID-19 test kit sector

• scale and nature of domestic COVID-19 test kit activity, including manufacturing and trading

• scale and nature of activities abroad which are integral to our existing domestic COVID-19 test kit supply and market

• the direction of the COVID-19 test kit market

The results of this call for evidence will help to shape the policy and the resultant analysis will be published in the impact assessment underpinning the policy.

Privacy notice

The questions forming part of this review include requests for information which may be commercially sensitive. Such information will be used by the Department of Health and Social Care for the purposes of this impact assessment only. However, no commercially sensitive information will be published in the impact assessment itself. Any personal data (for example, names and email addresses) provided to the Department of Health and Social Care as a result of responding to the questions below will be processed in accordance with DHSC’s privacy notice.

Introduction

We want to build our understanding of the economics of the COVID 19 testing market in the UK. To do this we need more information about both the broad strokes of supply and demand dynamics as well as the fine detail of business costs and individual behaviour around testing.

This call for evidence seeks substantive submissions from all interested stakeholders. We would welcome submissions of both analysis and underlying calculations and evidence. We welcome submissions on any or all of the below broad areas:

• costs for individual businesses involved in the domestic COVID-19 test kit sector

• scale and nature of domestic COVID-19 test kit activity including manufacturing and trading

• scale and nature of activities abroad which are integral to our existing domestic COVID-19 test kit supply and market

• the direction of the COVID-19 test kit market

We have also set out some more specific questions to help guide respondents so that your submissions will be easy for you to structure and will add maximum value to our policy development and analysis. These are set out at high level here and in more detail in the call for evidence questions below. Submissions may focus on any individual question or cover them all.

The potential impacts of the validation policy on individual businesses

• costs for individual businesses involved in the UK COVID-19 diagnostics sector, including familiarisation and transition costs

• scale and nature of domestic COVID-19 diagnostic activity including trading

• scale and nature of activities abroad which are integral to our existing domestic COVID-19 diagnostics market

Horizon scanning and planning assumptions

• business’ planning assumptions within the private market for COVID-19 tests

• the impact of external variables, including new technologies, changing epidemiological patterns, government policy on free asymptomatic testing and the vaccine programme on the private market

Understanding the market

• the life cycle of a COVID-19 detection test product

• the investment that companies make in meeting new regulations

• an estimate of the profit margins in COVID-19 testing and how they might be impacted by the new regulation

• potential impacts upon supply chains

• size and volume of COVID-19 tests on the market

Who can respond

We welcome all evidence and analysis any stakeholder can provide on these broad topics. We are particularly interested in responses from:

• manufacturers of COVID-19 or other diagnostic tests

• distributors of COVID-19 or other diagnostic tests

• industry bodies

• academics and experts in the diagnostics industry

• think tanks and other research groups with relevant insight

• any others with evidence of potential impacts

Please indicate in your response if you are happy to be directly cited.

We invite you to submit a response to the questions outlined below.

The call for evidence will run for 4 weeks, ending on 16 September 2021.

How to respond

We invite you to submit written responses via email. Respond by downloading the UK market for COVID-19 detection devices: call for evidence template in OpenDocument (ODT) or MS Word Document format.

Fill in your responses to the questions and email the form to validation@dhsc.gov.uk.

Read the background on the policy and legislation in this document and use the questions here only for reference. This is not an online form.

In addition to the call for evidence, we are also planning to launch a full public consultation which seeks views on the government’s proposals to introduce mandatory laboratory validation for COVID-19 detection tests.

The full public consultation will provide individuals and organisations with the opportunity to feedback on the government’s proposals and the potential to shape the policy. This is separate from the call for evidence, which seeks specific evidence to support the impact assessment.

Background on the policy and legislation

Legislation

On 28 July 2021, it became a legal requirement to seek UK government validation for antigen and molecular COVID-19 detection tests intended for sale on the UK market.

The Medical Devices (Coronavirus Test Device Approvals) (Amendment) Regulations 2021 (made under the Medicines and Medical Devices Act 2021) will ensure that COVID-19 detection test products available for purchase on the UK market meet a minimum performance standard and consumers can have confidence in the performance of the tests they purchase. Those tests that do not pass the validation assessment and meet a minimum performance threshold will not be legal for sale in the UK. The government will publish a register of tests that have passed validation to make it easy for consumers to make informed choices about the tests they purchase.

Validation stage 1: desktop review

The desktop review is intended to prevent products that are below the minimum standards from progressing to the market as set out in the Medical Devices (Coronavirus Test Device Approvals) Regulations 2021.

The desktop review is an assessment of the evidence a manufacturer or distributor submits to support the performance of their product. Applicants will be required to submit information related to the following areas for basic checks:

• manufacturer and product information

• regulatory status

• product performance

• biosafety

• supplementary documents (for example, current versions of the instructions for use, biosafety documents, evidence of performance characteristic)

The desktop review assessment is then completed in 3 steps:

1. a scientific adviser reviews evidence provided by the applicant

2. the Desktop Review Assurance Group assesses this review and makes a recommendation

3. the Regulatory Approvals Committee then considers it

Read more detailed guidance on the process of applying for desktop review.

Validation stage 2: laboratory validation

In the autumn, the government intends to introduce a second statutory instrument which will introduce mandatory laboratory validation (in addition to desktop review) for COVID-19 tests. This will ensure that any COVID-19 test on the UK market meets a minimum standard, the same standards as those met by COVID-19 tests procured for the NHS and is fit-for-purpose.

Laboratory validation will involve independently testing the performance of a coronavirus test product in a central laboratory against a specific set of criteria.

On the assumption the test already meets certain criteria in terms of intended purpose and use, the test product will be subject to a validation process in a central laboratory, which will assess the following performance characteristics:

• analytical sensitivity (limits of detection and linearity of the assay)

• analytical specificity (interference by, and cross-reactivity with, other pathogens)

• diagnostic sensitivity and specificity (accuracy of performance with clinical samples)

This will happen in up to 3 stages. Products completing all stages will have completed laboratory validation against the required set of samples in line with MHRA recommendations.

We recognise extensive validation has already taken place for many test products on the UK market. Where our scientific advisers are satisfied this evidence presented in support of the test is of sufficiently high quality, we will rely on it to avoid any duplication and overly burdensome regulation. We would still expect to conduct a laboratory validation of these test products but with a minimal number of samples to test in order to ensure that the evidence claims from existing validation could be replicated to an appropriate degree.

Demographic questions

Thank you for responding to this call for evidence.

We welcome all evidence and analysis any stakeholder can provide on these broad topics.

Please answer all questions as far as they are applicable to you. This will help us to understand the make-up of respondents and analyse your responses. For example, if you’re responding on behalf of an individual, please answer questions addressed to organisations where you can (for example, on location and nature of work).

Are you responding on behalf of an individual or an organisation?

What is the name of your organisation?

In which country is your headquarters based?

If your organisation is part of a group of companies, what is the name and location of the parent organisation?

If UK-based, select the nation or region your organisation is based in:

• Scotland

• Wales

• Northern Ireland

• North East of England

• North West of England

• Yorkshire and the Humber

• East Midlands

• West Midlands

• East of England

• London

• South East of England

• South West of England

• other (please state)

What is the nature of your organisation?

• manufacturer
• retailer
• distributor
• trade association
• other (please state)

Does your organisation manufacture COVID-19 detection tests? (If yes, specify the type of tests.)

Does your organisation distribute or sell COVID-19 detection tests? (If yes, specify if your organisation sells directly to the patient – for example, high street retailer.)

Does your organisation currently sell COVID-19 detection tests on the UK market?

Does your organisation manufacture or distribute other diagnostic tests (not COVID-19 detection tests)? (If yes, please specify.)

How many employees are in your organisation?

• 0 to 4
• 5 to 9
• 10 to 19
• 20 to 49
• 50 to 99
• 100 to 249
• 250 or above

Can we contact you with follow-up questions?

If you’re happy to be contacted, what is your email address?

Can we cite you directly in publications such as the impact assessment?

Call for evidence questions

Below are a number of detailed questions to help guide your responses and highlight the evidence we are most interested in receiving. The answer to these questions will more closely align with our analytical needs and the specific policy issues where we want to build our underlying understanding.

Costs to business: familiarisation and transition costs

We invite manufacturers and retailers of COVID-19 tests to respond to the questions within this section.

It is important that we understand as much as possible about the impact the legislation introducing mandatory validation for COVID-19 detection tests has on business. Your feedback on the following questions will help us give a more representative estimate and help us to account for the costs associated with different sized businesses.

We are interested in understanding the familiarisation and transition costs for manufacturers and retailers impacted by this legislation. In this case, the familiarisation and transition costs refer to the costs incurred as a result of familiarising and transitioning into the new mandatory validation regime for COVID-19 tests.

We have assessed the tasks we believe that manufacturers and retailers will need to take in order to transition into the new system.

We would like to ask you to provide your assessment or estimate (or both) on the questions below.

For each activity, please estimate the time taken and cost per hour. You should take into account the level of seniority and level of pay of the employee who would take responsibility for these tasks. If there are multiple employees undertaking a task, please reflect this in the hours taken.

Please also identify whether you would undertake these activities in house, or contract these services out.

To answer these questions, please enter this information as far as possible with your best estimates.

Please skip the section that is not relevant to you.

Manufacturer: desktop review

For each activity, please estimate:

• hours taken to carry out activity
• cost per hour (hourly wage of internal or external employee, excluding non-wage cost uplifts such as National Insurance contributions)

1. Assessing guidance documentation

• hours taken
• cost per hour

2. Engagement with government communications highlighting guidance or new regulations

• hours taken
• cost per hour

3. Assessing portfolio of tests in need of assessment

• hours taken
• cost per hour

4. Develop and disseminate communications across relevant areas of business

• hours taken
• cost per hour

5. Collating information for application

• hours taken
• cost per hour

6. Submitting application through GOV.UK portal

• hours taken
• cost per hour

Manufacturer: laboratory validation

For each activity, please estimate:

• hours taken to carry out activity
• cost per hour (hourly wage of internal or external employee, excluding non-wage cost uplifts such as National Insurance contributions)

1. Assessing guidance documentation

• hours taken
• cost per hour

2. Engagement with government communications highlighting guidance or new regulations

• hours taken
• cost per hour

3. Assessing portfolio of tests in need of assessment

• hours taken
• cost per hour

4. Develop and disseminate communications across relevant areas of business

• hours taken
• cost per hour

5. Logistical costs of transporting of test kits to a UK-based laboratory

• hours taken
• cost per hour

6. Collating information for application

• hours taken
• cost per hour

7. Process application through GOV.UK portal

• hours taken
• cost per hour

Do you agree that the activities above accurately reflect the steps required to familiarise and transition into the new regulatory system?

Are there any additional activities you would identify as necessary for familiarisation and transition to the new system?

Retailer: desktop review

For each activity, please estimate:

• hours taken to carry out activity
• cost per hour (hourly wage of internal or external employee, excluding non-wage cost uplifts such as National Insurance contributions)

1. Assessing guidance documentation

• hours taken
• cost per hour

2. Engagement with government communications highlighting guidance or new regulations

• hours taken
• cost per hour

3. Cross reference current test portfolio against GOV.UK list

• hours taken
• cost per hour

4. Assess stock depletion timelines and future procurement

• hours taken
• cost per hour

5. Develop and disseminate communications across relevant areas of business

• hours taken
• cost per hour

Retailer: laboratory validation

For each activity, please estimate:

• hours taken to carry out activity
• cost per hour (hourly wage of internal or external employee, excluding non-wage cost uplifts such as National Insurance contributions)

1. Assessing guidance documentation

• hours taken
• cost per hour

2. Engagement with government communications highlighting guidance or new regulations

• hours taken
• cost per hour

3. Cross reference current test portfolio against GOV.UK list

• hours taken
• cost per hour

4. Assess stock depletion timelines and future procurement

• hours taken
• cost per hour

5. Develop and disseminate communications across relevant areas of business

• hours taken
• cost per hour

Do you agree that the activities above accurately reflect the steps required to familiarise and transition into the new regulatory system?

Are there any additional activities you would identify as necessary for familiarisation and transition to the new system?

Future business planning and horizon scanning

We invite manufacturers and distributors of COVID-19 tests to respond to the following questions.

We are interested in understanding how agents in the market for private COVID-19 testing are currently planning for the future, how they are thinking about the market and what opportunities they see.

We would value evidence or feedback on the following questions.

What horizon period are you currently planning for within your business planning?

• 0 to 6 months
• 7 months to 1 year
• 1 to 2 years
• 2 to 3 years
• 3 to 5 years
• 5 to 10 years
• more than 10 years

What opportunities have you identified and what demand do you expect over the next year for testing provided by the private sector?

Are there any dependencies or risks attached to this? Where possible break this down by tech type. (For example, do you anticipate greater demand for polymerase chain reaction (PCR) versus lateral flow testing or vice versa?)

If you are currently selling in the COVID-19 diagnostics market, do you expect to expand into the wider diagnostics market, or continue solely with COVID-19 diagnostics?

Interaction with epidemiological pattern, universal free testing and the vaccine programme for COVID-19

How is the free provision of lateral flow tests (the government’s universal free testing offer) impacting your business planning decisions? (Or, if you are not a business, how do you predict that the free provision of lateral flow tests will impact business planning decisions?)

How is the government’s free provision of PCR tests impacting your business planning decisions?

How is the free provision of tests (the government’s universal free testing offer) impacting the value and profitability of the private COVID-19 diagnostic market?

How is the COVID-19 vaccine programme impacting your business planning?

How is the vaccine programme impacting the value of the private COVID-19 diagnostics market?

How do you think the epidemiological pattern of this pandemic will effect the market for test devices over the next 10 years?

How is the uncertainty of the future of the pandemic impacting your business planning decisions? For example, external variables such as the potential for the emergence of new variants. (Or, if you are not a business, how do you predict these will impact these decisions?)

To what extent do you believe consumer behaviour regarding illness and diagnostics has changed due to the pandemic?

Will businesses want to test staff or customers (or both) in the absence of government requirements to do so?

If new variants begin to spread, will businesses and individuals take it upon themselves to use privately bought tests to manage their own risks?

Outside of medical diagnostics over the next 10 years, what activities, business areas or type of consumers will make regular use of COVID-19 testing?

Understanding the market

We invite stakeholders involved in the manufacture or distribution of COVID-19 or other diagnostic tests, academics and experts in the diagnostics industry to respond to the questions within this section.

We are interested in understanding more about the structure and investment within the COVID-19 diagnostics market. Specifically, we are seeking evidence relating to a number of areas including:

• the life cycle of a COVID-19 detection test product

• the investment that companies make in meeting new regulations

• an estimate of the profit margins in COVID-19 testing and how they might be impacted by the new regulation

• the size, volume and value of the COVID-19 test market

• potential impacts upon supply chains

Product life cycle

What is the average life cycle for your product or products or a COVID-19 diagnostic device?

How would this vary by technology type? For instance, how long would a device last for before manufacturers decide to update or make substantive changes to their product (for example due to innovation, market competition or new variants)?

Investment and profits

We are interested in finding out how much it costs for manufacturers to make improvements to their products.

Can you estimate how much it would cost, on average, to modify a COVID-19 detection test in the following 3 scenarios:

• re-work of manufacturing process or packaging that does not have regulatory impact

• re-work of manufacturing process or packaging that does have regulatory impact

• change to the test construction (for example chemistry or packaging)

What would be the most likely scenario if a COVID-19 test product failed validation?

• product is discontinued and exit the market
• redesign and resubmit for validation
• seek alternative international markets
• other (please specify):

How would this vary by:

• technology type
• country of origin
• size of revenue

Who would typically bear the cost of a reinvestment? (For example, manufacturers in reduced profits or through cost cutting, equity holders in reduced dividends or further investment, or customers in prices?)

How much would you estimate that it costs to bring a new product to market? Please outline:

• financial cost
• amount of time taken to bring a product to market

How would this vary by technology type?

Estimate of profit margins

For each of the following COVID-19 test technology types, please provide an accurate assessment of your current and target gross profit margins.

Gross profit margin is the product revenue minus the cost of sales divided by revenue.

Choose from:

• negative gross profit margin
• 0% to 10%
• 11% to 20%
• 21% to 30%
• 31% to 40%
• 41% to 50%
• 51% to 60%
• 61% to 70%
• 71% to 80%
• 81% to 90%
• 91% to 100%

1. Polymerase chain reaction (PCR)

• current gross profit margin:
• target gross profit margin:

2. Lateral flow devices

• current gross profit margin:
• target gross profit margin:

3. LAMP (loop mediated isothermal amplification)

• current gross profit margin:
• target gross profit margin:

4. Other (please specify):

• current gross profit margin:
• target gross profit margin:

In calculating the gross profit margin above, what elements have you included in the cost of sales? (For example, fixed costs, research and development spending, branding.)

What proportion of devices currently available on the market would you anticipate presenting to the scheme for validation, rather than being excluded from the market?

How would this vary by:

• technology type
• country of origin
• size of revenue

Size, value and volume on the market

Are you aware of any research which you believe accurately represents the volume of tests available on the private market in the UK? Please provide the title and source, and brief summary.

In terms of volume of test devices, what estimate of the market share of the UK COVID-19 diagnostic market is supplied by non-UK business?

Are you aware of any research that best represents the size of the UK’s diagnostics market, or market for COVID-19 tests?

Are you aware of any research that estimates the value of the UK diagnostics market, or market for COVID-19 tests?

Do you expect to see a reduction in the number of COVID-19 detection products on the market or of those imported into the UK?

Impact upon the supply chain

What would be the most likely impact on the supply chain if a COVID-19 test product failed validation?

How would this vary by:

• technology type
• country of origin
• size of revenue

(For example, a company could find new work to replace the contract lost.)

What proportion of your supply chain is UK-based?

Next steps

We will analyse the responses we receive to this call for evidence and this will directly feed into the development of the impact assessment for the policy introducing validation for COVID-19 tests. When we are satisfied that we have collated the best evidence, we will submit a full impact assessment to the Regulatory Policy Committee for their review.

In addition, we will shortly launch a full public consultation which seeks views on the government’s policy proposals to introduce a second statutory instrument in the autumn to introduce mandatory laboratory validation for COVID-19 detection tests.

The full public consultation will provide individuals and organisations with the opportunity to feedback on the government’s proposals and the potential to shape the policy. This is separate from the call for evidence, which seeks specific evidence to support the impact assessment.

Thank you for responding to this call for evidence.