NC lab company claimed immunity test for COVID-19 as it pushed for state business
As Mako Medical closed in on a big opportunity to test state employees for the coronavirus, the lab company claimed on social media and in its dealings with a state official that it was close to developing a test to determine if someone was immune.
On April 23, a day after State Treasurer Dale Folwell announced the Raleigh-based company would make available 20,000 tests for prison and probation employees, the company made claims on Twitter and Facebook that a company representative now says were a mistake.
On its Twitter account, the company said: “The MAKO Medical team has worked to develop tests to tell you if you have #cornoravirus (sic) or if you are immune to it.”
On its Facebook page, the company said: “Over the last several weeks, the MAKO Medical team has worked around the clock to develop tests that will not only tell you if you have coronavirus but if you’re immune to it.”
Five days after a reporter asked about the posts, the company acknowledged they were in error, but more than a week later they still hadn’t been taken down. (The posts disappeared shortly after this article was published online.)
“In regards to a social post in April, our social media consulting firm should have said a test for ‘antibodies’ instead of using the word ‘immune,’” Josh Arant, the company’s chief operating officer, said in an emailed statement on May 5. “It was an honest mistake in what is an ever-evolving understanding of COVID-19.”
A Mako employee looking to gain the testing business from Folwell also made the claim in an email to him on April 16. Folwell oversees the State Health Plan, which provides health care coverage to more than 700,000 teachers, state employees, retirees and their dependents.
“By end of next week we will have validated the antibodies test for Corona, which will tell whether somebody has had the virus and developed immunity,” wrote Grant Fitzgerald, a sales representative for Mako.
In that email, obtained by The News & Observer through a public records request, Fitzgerald offered a plan for a fast deployment of testing to confirm someone has the virus through Mako’s network of independent pharmacies. Folwell said he had reached out to Mako looking for tests for prison and probation employees after the virus showed up in several prisons.
Antibodies and immunity
The Food and Drug Administration has yet to approve a test that can determine whether someone has immunity to the virus, which is known as SARS-CoV-2. The FDA has given emergency approval to tests that have a limited ability to identify whether someone’s blood has antibodies to the virus, but experts say no one has yet confirmed that having them means someone is immune.
“At this point in the pandemic, there is not enough evidence about the effectiveness of antibody-mediated immunity to guarantee the accuracy of an ‘immunity passport’ or ‘risk-free certificate,’” the World Health Organization said in a scientific brief on April 24. “People who assume that they are immune to a second infection because they have received a positive test result may ignore public health advice.”
North Carolina officials said they are not advising people that antibody testing would prove immunity.
“At this time, there remain significant gaps in our understanding of the presence of antibodies to SARS-CoV-2 and immunity,” said Kelly Haight Connor, a state Department of Health and Human Services spokesperson, in an email message May 1. “The presence of antibodies is not necessarily equivalent to protection from SARS-CoV-2. An active area of research relates to understanding the presence of antibodies and immunity to COVID-19.”
Dr. James Hamblin, a Yale School of Public Health lecturer, wrote in The Atlantic in an article published that same day that it’s too soon to know whether having antibodies means immunity.
“We don’t yet know the degree to which people with coronavirus antibodies are protected from getting COVID-19 a second or third time,” Hamblin wrote. He is a staff writer for the magazine.
Humans produce antibodies to fend off disease. That’s why some diseases, such as the mumps, rarely return after someone contracts them. Vaccines, which are often weakened versions of diseases, are designed to help people develop antibodies so they can prevent diseases if exposed. A vaccine for COVID-19 has yet to be developed.
On May 4, The Washington Post reported that the FDA is stepping up its oversight of antibody tests after companies have put scores of them on the market without review.
The N&O tried to reach Arant and Mako CEO Chad Price about the posts. The reporter was referred to Heather Matthews, who provided the statement from Arant. Matthews is a public relations representative for Nexsen Pruet, a law firm involved in Mako’s efforts to do mass testing of state employees, according to text messages between Fitgerald and Dee Jones, executive director of the State Health Plan.
The firm also helped Mako obtain a $3.16 million state Job Development Investment Grant in 2017 to expand its operations to a former printing plant in Henderson. One of the Nexsen Pruet attorneys who worked on the application was John Skvarla, a former state Commerce secretary who has a financial interest in Mako and the Henderson property.
Cuts at testing labs
In February, N&O reports raised questions about Price’s truthfulness regarding his education and work experience. The reports also showed roughly $560,000 in campaign contributions connected to Mako that were made predominately to Republican state, local and federal candidates in the past five years. Among the contributions were $17,500 split among five state or federal candidates in four states that Price confirmed he made in the name of his sister, who has a severe mental disability and has never had a job.
Since then, the company laid off four supervisors as revenues sagged. That’s been a problem across the lab-testing business, as patients stopped visiting doctor’s offices amid state and local shutdown orders. One of those whose job was cut on March 27 was the company’s quality assurance director, Vicky Satterfield, said Frank Maurio and Michael Horton, two of the former lab supervisors who worked with her.
Arant acknowledged the cutbacks in his statement, and said her position was eliminated and the work shifted to a vice president for laboratory operations to oversee the Raleigh and Henderson labs. The company is now processing 5,000 to 10,000 COVID-19 tests per day, he said, with enough equipment to handle 25,000 per day, and is looking to hire 60 people at the Henderson labs to handle the increased testing.
FDA clearance for tests
Records Mako gave to the North Carolina Health Care Facilities Association show the company’s efforts with the FDA to gain approval for the swab test that would determine if someone has the disease. The records show that Mako purchased COVID-19 test kits from ThermoFisher, a company that has received emergency FDA approval.
Mako sought emergency FDA approval because it wanted to run those tests on a different polymerase chain reaction machine from the one ThermoFisher used to develop its test. PCR machines duplicate DNA strands many times so that samples can be analyzed, in this case to determine infection.
Mako gave the FDA 10 test results that matched those later run by the North Carolina State Laboratory of Public Health. An FDA doctor told Mako it could use the machine, which holds four times the samples and allows for many more tests. Arant said in his statement that Mako has run 70 sample tests that have been validated by two laboratories.
The test, which involves collecting samples from swabs, does not determine immunity.
ThermoFisher’s website includes a warning that labs must follow the instructions for use of its test kits.
“Deviations from the authorized procedures, including the authorized instruments . . . are not permitted,” it said. A reporter could not reach company officials by phone or email.
After this report was first published, WSOC-TV of Charlotte reported Thursday that a Mako employee had incorrectly performed a COVID-19 test for a Mecklenburg County assisted living center on Wednesday and had reported false positives.
“The false positives were due to human error within the lab technician plating process,” Arant said in a statement to WSOC-TV that the company sent the N&O on Friday. “The results were not due to instrumentation error, method failure or result misinterpretation.
“We immediately instituted additional safeguards, including an additional level of result reporting review, to help ensure this never happens again. We understand the gravity of the situation which is why we immediately called the nursing home upon realizing the error.”
Treasurer steps in
Since getting FDA clearance, Mako has advertised capability to conduct tens of thousands of COVID-19 tests. Among the takers was Folwell, a Forsyth County Republican.
He said in an interview on April 23 that he turned to Mako after seeing Fitzgerald at a Rotary Club gathering in Pinehurst about six months ago. Folwell had given a speech at the meeting about health care transparency. He did not check with LabCorp, a major player in the testing business with a headquarters in Burlington, or other lab testing companies.
Folwell said he’s never met Price, Mako’s CEO. Election records do not show Price making contributions to Folwell’s campaigns, but Fitzgerald made a $100 contribution in 2016 as a Mako employee. And Fitzgerald’s father, Craig, gave a total of $750 in two contributions to Folwell that year. Craig is married to Tami Fitzgerald, who leads the NC Values Coalition, a group that opposes abortion and gay marriage.
Their daughter Paige, who is Grant’s sister, worked as an aide to Folwell when he was a state lawmaker.
Folwell didn’t mention those connections initially. After a reporter pointed them out in a follow up interview he said they had nothing to do with him only reaching out to Mako. He said he didn’t remember Grant Fitzgerald’s campaign contribution.
He said the agreement did not mean only Mako would do the tests. It meant Mako had committed to making 20,000 of them available.
“There was no guarantee that Mako was going to do one or a thousand or ten thousand tests,” he said.
Prison testing effort falls apart
Folwell, 61, has a unique perspective on the virus. He came down with it after a trip to Utah in March and was hospitalized for five days before recovering.
The correspondence shows Fitzgerald first emailed Folwell about testing the early morning of April 16. By then, Neuse Correctional Institution had more than 50 cases, but the full extent of the outbreak wasn’t known until a day later, when mass testing showed more than half the prison population infected. The other major outbreak, at the N.C. Correctional Institution for Women, wasn’t identified until the following weekend. Neuse, the Goldsboro men’s prison, has reported more than 460 of its inmates testing positive through Sunday, and the Raleigh women’s prison has reported more than 90 cases.
The Neuse testing was done by a state lab at no cost to the prison system, and LabCorp didn’t charge the state for the NCCIW testing, state officials said.
In one of the two emails Fitzgerald sent to Folwell on April 16, he lays out how Folwell and the State Health Plan could set up mass testing through local health departments and Mako’s network of independent pharmacies. In all capital letters he wrote: “WE CAN HAVE THIS PLAN RUNNING QUICKLY -- NEXT WEEK”
Folwell said he vetted the company by touring its lab in Henderson and meeting the chief medical director. But he had not struck a contract with Mako when he made the announcement on April 22 that Mako was providing more than 20,000 tests.
The correspondence also shows Mako seeking a price between $80 to $83 per test, depending on whether Mako had to collect samples. Fitzgerald noted the Medicare reimbursement rate is $100 per test, but told Folwell that Mako would cut the price to avoid the hassle of processing insurance claims.
At 20,000 tests, Mako would have been paid at least $1.6 million at its cheapest rate.
An unrelated agreement Mako struck with Moore County that WRAL obtained shows it is being paid $96,600 to provide 1,380 tests; it will pick them up, process them and report results. That’s $70 per test.
On May 4, Folwell said in a news release he was backing out of the agreement with Mako. The state Department of Public Safety had “logistical and personnel” concerns with the testing, Folwell said. John Bull, a DPS spokesman, later said on-site testing would be a problem, and the department was eyeing another plan involving tests that employees could collect themselves and mail in.
On Thursday, DPS announced a plan for “free, confidential, flexible and voluntary COVID-19” testing of more than 21,000 prison, probation and juvenile justice employees with LabCorp. Starting Monday the employees can go to designated FastMed Urgent Care locations across the state.
The treasurer’s correspondence also shows Fitzgerald and Mako heavily involved in identifying a legal pathway for performing the mass testing. Among the documents is a sample letter Fitzgerald sent to Folwell and Jones of the State Health Plan, that Folwell could then send in his name to the N.C. Medical Board.
“As State Treasurer, I am working with Mako Medical and the Department of Corrections to come up with the most efficient way for these tests to be provided,” the letter said.
The letter asks the board to make a determination that one of Gov. Roy Cooper’s executive orders would allow a doctor to issue a “standing order” that all at-risk prison employees be tested.
Jones said in an interview she didn’t ask for the letter and didn’t use it. Her text messages with Fitzgerald also show she learned that Nexsen Pruet had reached out to a State Health Plan attorney about the mass testing plan without her knowledge.
“Wish I had known they were planning to do that,” she texted.
Pharmacy testing legislation
Folwell said his department is looking for ways to make tests more accessible to state employees, including having more pharmacies offering them. Correspondence with his office shows Fitzgerald seeking state legislation to expand testing to more pharmacies.
Fitzgerald emailed Jones early on April 22, a little less 13 hours before Folwell’s announcement of the agreement he struck with Mako. Fitzgerald said Mako was working with the N.C. Association of Pharmacists to change state law to make it easier for pharmacies to collect test samples for the COVID-19 and antibody tests. The legislation would align the state with federal rules, he said.
“We have a proposal from Representative and pharmacist Wayne Sasser (whom we personally spoke to today) who is also on the Healthcare workgroup on COVID-19 for the NC House,” Fitzgerald said. “Representative Sasser informed me that this bill will be passed on Thursday 4/23 that will allow pharmacists to collect/test for COVID-19 virus and antibody.”
He said Mako has a network of more than 600 independent pharmacies around the state that have “heavy penetration into the rural areas that often lack access.”
“We ran a survey of those pharmacies over the weekend as to their willingness to become collection sites and 98% responded that they would!” he said.
Fitzgerald suggested in a text to Jones five days later that the mass testing plan be inserted into broad legislation being developed in the General Assembly. Jones said in the interview she didn’t follow through with that proposal either. A House bill has a provision that would give approval for pharmacies to take samples for COVID-19 and antibody tests. Much of that legislation was rolled into a broad COVID-19 response bill that became law, but it didn’t include the provision.
Sasser, a Stanly County Republican and a pharmacist who formerly owned and operated several pharmacies, said he sought the provision, but dropped it after the N.C. Medical Society raised concerns. He said the federal rules still require special approval for pharmacies, so he plans to resurrect the legislation and include a training program for pharmacists so they can do proper testing.
He said he didn’t speak with Fitzgerald, but did talk with Vinay Patel, who runs Mako’s pharmacy program.
Fitzgerald in a text message last week said a representative would respond to a reporter’s questions, but no response has been provided since.
Ardis Watkins is the executive director of the State Employees Association of North Carolina. She has been pushing for the State Health Plan to make testing available for prison and probation employees. Cost is not her primary concern.
“Our thing is we don’t care who does it,” Watkins said. “We think it’s imperative that it gets done, and if somebody’s got testing and it’s approved, bring it on.”
This story was originally published May 14, 2020 at 10:56 AM.