County sues firm over COVID-19 test kits
Officials claim tests failed to provide accurate results, seek return of $11 million
WEST CHESTER » Chester County has filed a lawsuit seeking the return of more than $11 million it paid an East Whiteland company for test kits that would identify the presence or absence of COVID-19 antibodies in local residents but which the firm apparently failed to provide to the county in the time it said it would and which never received the federal authorization the firm claimed was imminent.
Named in the breach-of-contract lawsuit filed on Friday in Common Pleas Court was the biotechnology firm Advaite and its co-founder and chief executive officer, Karthik Musunuri of Uwchlan. In addition to the contract claims, the suit also alleges unjust enrichment and negligent representation.
The suit is the latest chapter in the saga of how the county tried to respond to the COVID-19 pandemic in the early months of 2020 but ended up with a failed test procedure. Initially touted as a quick, accurate and easy way to test for antibodies in people’s blood that would show whether they had a recent or past COVID-19 infection, the RapCov test kits were later found to deliver inappropriate levels of false results.
The county in March had purchased an initial lot of 10,000 of the test kits which it began administering to frontline medical and emergency workers at open-air sites across the county.
“We are undertaking the antibody blood test as another weapon in the fight to control coronavirus,” county Health Department Director Jeanne Casner was quoted as saying at the time. “Knowledge of who has developed antibodies to the virus can help us tremendously in our strategy to respond to emergencies, treat patients, and care for the elderly.”
The following month, the county — which
was introduced to Advaite through former state Sen. Andy Dinniman of West Whiteland — contracted to purchase 1 million of the RapCov test kits at a price of $20 million in April. The county paid Advaite $13 million beyond an initial payment of $2 million before it acted to cancel the contract in early July after noting defects in the tests, and complaining that the firm had not made good on its promise to deliver the 1 million test kits by May 25.
The suit was filed on behalf of the county by attorneys from Anapol Weiss, a Philadelphia law firm specializing in personal injury and medical malpractice. It was unknown who represents Advaite or Musunurl, and neither the company nor its founder and CEO could be reached for comment at press time.
The firm has told the county that it would not issue a refund, claiming that “all final sales of goods are non-returnable and payments non-refundable,” according to the suit. In addition, the firm in December demanded that the county take possession of the ordered test kits, which it says “continue to languish in (its) warehouse
and burden production for other paying clients.
The firm also informed the county that the kits have an expiration date that the county claims it was never told about. The kits supplied to the county up to July did not have expiration dates on their packaging, the suit states.
In the lawsuit, the county is said to have been working feverishly in March and April to find ways to determine what the spread of the coronavirus and its COVID-19 infections were as it became apparent that the virus was spreading quickly across the region, the state, and the nation.
To date, the state Department of Health has reported 22,174 cases of COVID-19 in the county, and 616 deaths from the virus.
The county in March learned of the RapCov test that could show whether a person had a recent or past COVID-19 virus infection, based on the presence or one or another antibody in the person’s blood. A simple pin-prick on a persons finger would deliver enough blood to be tested for the antibodies. Results could be determined in less than a day, the firm claimed.
In communications with the county, according to the suit, Musunuri assured the county that the firm
anticipated that it would receive an emergency use authorization for the RapCov test from the U.S. Food and Drug Administration, which was fast-tracking COVID-19 products.
Although the suit states the county initially intended only to purchase 10,000 of the kits, “at this time in late March 2020, as the pandemic worsened, there was a sense of urgency across the Commonwealth and entire nation to take swift and substantial actions to purchase COVID-19 test kits.”
Advaite, the suit suggests, pressured the county to act swiftly to purchase the kits by saying it was “inundated with orders,” and said that it could improve
its production abilities to ramp up supply of the kits. It confirmed that it could provide the county with 1 million kits it could distribute to residents of Chester and Delaware counties by the end of May.
The county in April agreed to pay a total of $20 million — an initial stake of $2 million to get the company’s production increased, plus $18 million more — by June 1.
All the while, the company was also telling the county that authorization for the RapCov kits was forthcoming from the FDA.
But despite the county meetings, its payment schedule for seven weeks after the initial contract, the suit contends that
Advaite did not meet its promised supply schedule. By May 25, it had delivered only 12,675 test kits out of the 1 million it had promised by that date. In total, the county got 39,625 test kits, less than 4 percent what it had ordered.
In the first few weeks after testing began May 7, the tests produced results that appeared to be accurate. But two weeks later, the percentage of people testing positive for coronavirus antibodies began spiking to levels far above what was plausible, based on the prevalence of the virus in the area. The county eventually shelved the program June 2, by which time the kits still had not received the FDA emergency
use authorization it said was forthcoming.
“Despite Advaite’s flagrant failure to supply RapCov tests in accordance with the supply scheduled Advaite’s misrepresentations regarding (FDA authorization) being imminent ... Advaite has refused to reimburse Chester County for test paid for but not supplied,” the suit states.
The county is asking for the return of $11.1 million, the difference between the $13 million the county paid and the $1.8 million worth of kits the company eventually supplied before the county canceled the contract. It is also asking for reimbursement of lab and medical costs for the kits.