Policymakers in the U.S. are grappling with a disastrous pandemic as well as long-standing political tensions, but one aspect of the COVID-19 pandemic that might unify them is the need to ensure that patients in the U.S. are not at the mercy of other nations for needed diagnostics and therapies. Peter Lu, CEO of test maker Arbor Vita Corp. of Fremont, Calif., told BioWorld that policymakers in the U.S. must be more willing to protect American companies from other nations’ abusive trade practices if the U.S. population is to benefit from American innovation, which is often duplicated at lower quality in other nations.

Arbor Vita announced June 8 that it had notified the FDA under the emergency use authorization process of its Covisa test for immunoglobulin G (IgG), which the company said offers 100% sensitivity and 99.24% specificity. The Covisa can be run on enzyme-linked immunosorbent assay (ELISA) equipment found in 24,000 labs certified as high-complexity labs under CLIA, although Arbor is running the test through independent validation.

Perhaps as salient – given that products from mainland China continue to falter sufficiently to be dismissed from the FDA’s EUA program – Arbor has started producing all the components of its test for the COVID-19 pandemic at its U.S. facilities, including reagents, the object of many complaints of product shortage over the past few months.

The company vowed to deliver 2 million tests by the end of June, and will expand capacity to 1 million tests per day by the end of July. Lu said the effort to bolster production is not as difficult as might be expected, noting that the equipment needed costs roughly $100,000 per set. If Arbor decides to purchase 10 units, this requires about $1 million, an investment he indicated was not entirely onerous. Deliveries of the equipment tend to run two to four weeks.

China’s head start on pandemic not a head start on quality

Lu said development of the supplies needed to run tests, such as reagents, can be time-consuming, and noted that China’s earlier experience with the SARS-CoV-2 virus gave manufacturers there a head start over their competition in other nations. The problem, Lu said, is that the manufacturers in mainland China are “a little sloppier in terms of quality control,” which is another factor that drove Arbor to go in-house with its production of supplies. This turned out to be a solid move on the company’s part, given the issues seen in the various supply chains for testing.

Lu said he is uncertain as to whether Beijing’s policy is to export lower-quality product and thus retain high-performing product for domestic use. He said he has attempted to do business with companies in China, “and it’s been quite a horrendous experience.” The business ethic in the U.S. is predominantly one in which both participants in a business deal will benefit, but that when dealing with companies in China, “it’s I win, you lose, and they don’t care. There’s no sense of fairness, it’s what they can get away with,” Lu said. He speculated that this mentality might be a factor in the poor product quality that has led to the de-listing of products from the FDA’s EUA programs.

Lu noted that he is originally from Taiwan, which he said has suffered at the hands of Chinese leadership over the centuries. His family left Taiwan in the 1960s after a paper written by his father appeared in Nature, which led to a job in the U.S. Taiwan’s approach to working relationships at the time was based at least in part on leverage rather than on merit and mutual benefit, but Lu said that has since changed, in part due to citizens who went abroad for training and returned with reform in mind after seeing the benefits of how Western nations handled their affairs.

“China has not done that yet,” Lu said, adding “the propaganda and the mental alignment that exists in China – and the tremendous censorship – makes that [mindset] very difficult to penetrate.”

Lu said he is not personally familiar with Beijing’s use of a white list and black list for products eligible for export from China, but said such a mechanism is consistent with how things are handled. This consideration could be motivated largely or entirely on an effort to obtain a competitive advantage, particularly if testing in another nation becomes dependent on supplies of reagents from China.

There is some commercial awareness in the U.S. of the poor quality of products coming from China, Lu said, but companies in other nations, including the U.S., may be reluctant to refuse product from China, and not always for entirely altruistic reasons. He is supportive of the use of tariffs to level the commercial playing field with Beijing, adding, “I’ve bought into the idea that we need to have these [manufacturing] capabilities in the U.S. for national security, and so we have some control over our destiny.”

APIs an example of a vital national resource

Lu cited the case of active pharmaceutical ingredients as an example of a commercial asset that is critical to the public health, and to the ability of Washington to dampen American susceptibility to great-power arm twisting. More extensive use of robotics and other modern manufacturing technologies should dampen the production cost advantage enjoyed by API manufacturers in other nations, and he pointed out that even China is being undercut in terms of labor costs by neighboring nations, such as Vietnam.

The FDA’s inspections of facilities in China could never have the same impact as those in the U.S. for the simple reason that the operator of the plant in China could simply close up shop and reopen in another location. Another issue is China “will always undercut you … because it’s a national issue,” rather than a business-to-business issue. Companies in China have Beijing’s full support for such practices, which are intended to gain access to a market and eventually dominate that industry, Lu said.

“You have to have a government that’s smart enough to recognize that, and act to counter and protect industry,” Lu said. “It’s not us against another business in China: It’s us against the Chinese government,” he said.

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