NEW YORK — The UK government is cracking down on potential price gouging and substandard delivery of domestic PCR-based testing services for SARS-CoV-2, the virus that causes COVID-19.
The Department of Health Social Care, or DHSC, asked the UK Competition and Markets Authority earlier this month to assess whether PCR test providers may be breaching their obligations under consumer law and should be subject to enforcement action. Eighty-two test providers subsequently received an open letter from the CMA this week that warned them not to mislead or mistreat customers.
"PCR test providers should be in no doubt that they need to get on the right side of the law," said CMA General Counsel Sarah Cardell in a statement. She added that CMA's actions will also help consumers by "setting out exactly what they should expect for their money."
Cardell called the letter the "latest step in our work to tackle rip-off prices and bad service." She added that CMA continues to work closely with the DHSC in reviewing the COVID-19 PCR testing market and will be providing further advice to the DHSC on any further actions that can be undertaken.
A spokesperson for CMA deferred to Cardell's statements when asked for further comment. The DHSC did not return a request for additional information on the 82 companies that received the letter. However, in a separate statement, it described them as "private travel testing companies" and as making up about one-fifth of the firms that offer Day Two and Day Eight tests to UK customers.
Currently, travelers arriving in the UK are required to undergo testing on the second day following arrival and, depending on their vaccination status and the country from where their travel originated, eight days following arrival. The UK government maintains a list of providers on its website, along with information about pricing.
However, the pricing advertised on the UK government website doesn't always match the actual pricing from providers, authorities maintain. Furthermore, another 57 companies were removed from the government's list of sanctioned test providers all together this week as they "no longer exist or do not provide a relevant testing service." Those 82 firms that do continue to offer PCR testing services and received a warning letter will henceforth be subject to regular spot checks to ensure prices are accurate and services legitimate, according to DHSC.
Sajid Javid, the health and social care secretary, made clear in the statement that the government's actions were focused on private testing companies catering to travelers. "It is absolutely unacceptable for any private testing company to be taking advantage of holidaymakers and today's action clamps down on this cowboy behavior," Javid commented.
Should they continue to advertise misleading prices, companies face a so-called two-strike warning, a new policy for dealing with providers, which means that they could be removed from the government's list. The DHSC also said it is preparing new guidelines to address pricing for tests and service standards.
A copy of the letter sent by the CMA to the 82 firms is available on its website. In it, it alleges that some PCR providers might not be complying with several UK regulations that protect customers, including the 2008 Consumer Protection from Unfair Trading Regulations; the Consumer Rights Act of 2015; and the 2013 Consumer Contracts Regulations. Harmful conduct by providers has included bait advertising, by advertising cheaper tests, as well drip pricing, where additional costs are not factored into the advertised price of the service, the letter states.
According to the letter, some providers haven't informed customers of certain specifications of their services and have in some cases failed to deliver tests on time. Customers have also experienced difficulty in contacting providers and in some cases have not been refunded for cancelled orders or services that didn't provide results within advertised timescales.
In its letter, CMA urged PCR test providers to not advertise cheap tests that are limited in quantity; not to provide misleading information around pricing; to advertise the total cost of the service, not just the cost of components of the service; to make clear what steps consumers have to take to obtain their results; and to abide by fair conditions and to be clear on the terms of their services, including regarding time scales, refunds, and cancellations.
Should providers not comply, they could face law enforcement action, the CMA warned. Legal actions could include criminal prosecution, as well as small claims court proceedings undertaken by consumers to regain damages and claims in relation to their statutory rights.
As CMA's Cardell stated, the letter was just an initial step taken by authorities to regulate the consumer market for COVID-19 PCR tests. As part of its DHSC-directed work, the CMA will continue to explore how PCR providers might be breaching their obligations under consumer law; to review whether there are structural problems in the market for PCR tests that affect price or reliability; and to make recommendations on what the government can do to remedy the issues.
Industry observers welcomed the moves by the government, saying that COVID-19 PCR test prices and service quality have been an issue for UK consumers for some time.
"UK prices to consumers for PCR tests have been polarized throughout the pandemic — free at the point of clinical need in the [National Health Service] at a very high quality, and extortionate at the point of questionable need by some providers in the private sector," said Joe Fitchett, medical director at Mologic, a UK provider of rapid and lateral flow diagnostics, which was acquired last month by Global Access Health, a social enterprise with a goal of expanding access to affordable medical technology.
Fitchett said that intervention and regulation, such as the steps undertaken by CMA, is necessary to keep prices in the UK low in order to help eliminate COVID-19 as a public health problem. He noted that access to essential laboratory and PCR supplies is again being limited in resource-challenged settings, and that unnecessarily high prices by UK providers is a "distortion of the limited supply chain and knock-on effect on useful, clinically warranted testing for individual or public health benefit."
Derek Warren, client services director at Health Partners, a London-based occupational health provider, said that the issues being addressed by the government have been a problem in the UK for some time.
"We have been frustrated by the behaviors in this market," said Warren, who heads up Apollo Testing, Health Partners' consumer-facing brand which offers SARS-CoV-2 testing to travelers and is listed as a provider on the government's website.
Warren noted that PCR testing has been favored by the government, as it allows samples from newly positive cases to be sequenced, and the identification of any novel variants. "That is why it can only be done on PCR, because we can't do genome sequencing with lateral flow," said Warren.
Among the issues facing customers have been excessive prices, price baiting with falsely advertised prices, zero refund tactics, and poor customer service, Warren said. He also said UK consumers have had trouble receiving kits, including delays via Royal Mail and other carriers. Warren also noted the presence of "pop-up labs" that might be operating without accreditation by the UK Accreditation Society and may advertise as having laboratories that turn out not to exist. Such cases have been discussed in the British media recently, including one firm, RT Diagnostics, that has ties to a former justice minister.
"There has been abuse, fraud, and criminal activity," said Health Partners' Warren, "and there have been a couple examples of this sadly." He added that Apollo, which also serves travelers returning to the UK from the US, for example, has complained to the government about price baiting in the market several times. "They need to sort this out," he said of the government.