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U.S. firm offered to sell Md. virus tests for less


As Maryland Gov. Larry Hogan negotiated receipt of 500,000 coronavirus tests from South Korea this spring, a domestic test distributor tried to sell the state a million or more federally authorized tests at less than two-thirds the price, according to emails between the distributor and a state health official.

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The Republican governor announced his acquisition in April as an "exponential, game-changing step forward" in the state's coronavirus-fighting efforts. He has repeatedly described the purchase as an example of how Maryland took the initiative in responding to the pandemic in the face of inaction by the Trump administration.

In an essay adapted from his forthcoming book, "Still Standing," which was published in The Washington Post on Thursday, Hogan wrote that he and his Korean-born wife Yumi arranged to buy the tests from South Korea because Maryland had "nowhere else to turn."

But at the time of Hogan's purchase, U.S. manufacturers were able to ship tests to domestic labs by the millions, The Washington Post reported in April. The shortages then limiting testing were of other supplies, experts say, including nasal swabs to collect samples and chemical reagents to process them.

The emails, obtained by The Post through a Maryland Public Information Act request, provide new details about one domestic distributor's efforts to supply the state with tests. They were exchanged between the state health department's deputy director of governmental affairs, Jake Whitaker, and a Maryland-based sales consultant, Rick Vohrer.

The emails helped set up an April 10 phone meeting between Whitaker, Vohrer and representatives of a Florida-based group that was distributing tests manufactured by C0-Diagnostics, a publicly traded company based in Utah.

After the meeting, Vohrer followed up by emailing Whitaker documentation of the test's emergency use authorization by the Food and Drug Administration.

Reached by phone on Thursday, Vohrer said he never heard back from the state after that email exchange.

"We had a call, presented what we had, and basically I heard nothing back," Vohrer said. Vohrer said he had filled out paperwork about the offer and assumed it was being considered as part of a state procurement process.

Ten days later, Hogan announced he had procured tests from South Korea. The governor said he and his wife began working on the deal on March 28, beginning with a call to South Korea's ambassador to the United States that "set in motion 22 straight days of vetting, testing, negotiations and protocols."

The state paid $9,464,389 for the shipment, which came to more than $18 per test. After Vohrer saw Hogan's announcement, he sent Whitaker another email, questioning that price.

"The test I discussed with you is manufactured domestically, [by] CoDiagnostics, and is $12.00 for the volume being purchased from Korea," the email said. "Volumes above one million units can get even better pricing, as low as $10."

Vohrer said Thursday that the distributors had told state officials they could supply the tests within a week.

The United States got off to a slow start in its efforts to test for the novel coronavirus after delays caused by federal red tape and an initial flawed test created by the Centers for Disease Control and Prevention. In early March, U.S. manufactures were able to sell tests abroad but were not authorized by the FDA to sell them inside the United States.

But in mid-March, Co-Diagnostics and other U.S. manufacturers gained authorization to ship tests domestically and began doing so by the millions. Dwight Egan, chief executive of Co-Diagnostics, said the company would have been "very anxious and capable" of taking a large order from Maryland.

Hogan spokesman Michael Ricci has said Maryland signed an agreement for tests with the South Korean company, LabGenomics, on April 2, two weeks after U.S. manufacturers announced they could provide tests domestically, but before Vohrer's sales pitch.

Ricci said the state reached out to several domestic suppliers in late March, but none could offer the volume and guarantees the state was seeking.

By the end of April, local and Democratic state leaders had become frustrated that the tests had not yet been put to use.

In conference calls with local and federal officials, the Hogan administration said the tests were hung up by regulatory hurdles and supply shortages that have throttled testing capacity nationwide, according to people who participated. In addition, the tests from South Korea, unlike those produced by Co-Diagnostics, had not received emergency use authorization from the FDA.

Ricci did not answer a question Thursday about how many of the tests from South Korea have been used. Hogan announced last month that the tests would be used at a new lab at the University of Maryland School of Medicine.

Ricci said the state has returned some of the tests to the South Korean company in exchange for "faster, better" ones, at a "nominal" increase in cost. But he did not say how many had been exchanged or what improvements were gained in the process.

Hogan alluded to the exchange of tests during a Washington Post Live event on Thursday.

"We're actually getting, you know, upgraded and new and improved testing from South Korea," the governor said.

Published : July 18, 2020

By : The Washington Post · Steve Thompson · NATIONAL, HEALTH, POLITICS, SCIENCE-ENVIRONMENT