Imagine a world in which the only way to get a soda is with a doctor’s prescription. Each soda costs $20 per can, and your insurance company covers it. The economy produces about 100,000 sodas each day. Given this scenario, do you think that you could get people to scale up the production of soda to tens of millions of cans per day? It would be a challenge, but not because it’s especially hard to produce and distribute soda. Thinking about the production of viral tests—suddenly in great demand—through the way society structures costs, regulations, and incentives around the production of common goods is a useful exercise that may explain why we seem to be caught up short of tests at this moment.
But back to soda-shortage land. Because they must keep total costs from running out of control, insurance companies, health-care providers, and government regulators have cobbled together a system that limits access to soda. One part of this system is an expensive regulatory process that must approve the ingredients in each brand; the language on the side of the can; and the delivery system used by the soda supplier—be it a glass bottle, an aluminum can, a self-serve dispenser, or a soda gun at a bar. Every aspect of the production, sale, and dispensing of sodas is rigorously scrutinized.
One day, everyone decides that he wants more soda. Demand soars by orders of magnitude. Beverage makers face pressure as politicians hammer at them to make enough soda to meet demand. The only people who can get sodas are those already provided for under the health-care system. They’re not even thirsty for soda, but the insurance company covers their costs, so why not buy some? Other people, who are thirsty, go to the hospital just to get soda. Doctors write them prescriptions.
Soda producers try to increase output but soon run into bottlenecks (so to speak). One vendor, with an approved soda-delivery system that packages a straw with each can, finds that its supplier of straws can’t keep up with the increased demand. This soda company explains to its unhappy customers that it has FDA approval only for a product that includes a straw from its traditional supplier. The company is applying to the FDA for an Emergency Use Authorization (EUA) that gives it permission to bundle a can with a straw from a different vendor. As it waits, it keeps repeating its excuse: “There is a straw bottleneck!”
Meanwhile, researchers on university campuses discover that you don’t need a straw—but they have no reason to go through the laborious process of filing for a EUA that allows drinking straight from the can. In their experiments, they realize that soda is just flavored sugar water and that they could produce millions of sodas per day at a price well under $1 per can. The researchers publicize their findings. Policy wonks urge them to get going: “Produce the sodas that a thirsty nation needs.” But these advocates say nothing about who will pay for all these additional sodas. The researchers are good sports, but they’re not fools. They produce some token batches of soda and go back to their day jobs producing policy briefs.
The wonks are surprised to discover that their meetings and documents don’t yield the soda-supply surge that they anticipated. Everyone gets discouraged. The wonks conclude that even an economic system as big, as powerful, and as innovative as America’s cannot rise to the challenge of producing millions of sodas per day. They settle for a goal of offering one soda per month to each family.
This fantasy is not so farfetched. Problems with the production of clinical-grade swabs to conduct viral tests represented a significant bottleneck in the production of testing kits during the first two months of the Covid-19 outbreak. When Rutgers University researchers discovered that you don’t need a nasopharyngeal swab to perform a test for the SARS-CoV-2 virus, they got an EUA to conduct tests on saliva samples. (Indeed, saliva samples appear to be preferable to the deep nasal swabs now widely used.) But no one has proposed a way to pay the Rutgers researchers, or their peers in comparable laboratories located throughout the United States, for the tests that they could supply. For now, they do them because they are good sports.
Meantime, the U.S. economy produces 350 million 12-ounce cans of soda each day. Soda producers don’t need regulatory approval each time they innovate around some hurdle or bottleneck. For their efforts, they make about $45 billion in sales each year.
If we want to use America’s massive capacity—much of which is now sitting idle—to produce tens of millions of virus tests per day, there is a way to do it. We need to decide what a test should do. If labs provide tests that do what tests are supposed to do, let them worry about the details. Don’t appeal to charity: we should be prepared to pay these labs twice as much as we spend on soda. Our aggregate technical expertise and sidelined industrial capacity, freed from regulatory shackles and permitted to pursue natural incentives, could solve our testing gap easily.
Instead, the FDA appears to be engaged in what can only be described as foot-dragging, if not outright obstruction. In its EUA for Rutgers, the FDA restricts Rutgers to testing patients with symptoms of Covid-19 and further mandates that the collection of saliva specimens be “performed in a healthcare setting under the supervision of a trained healthcare provider.” Why—in the midst of an economically devastating public health crisis—is the FDA requiring the supervision of a trained health-care provider for Covid-19 testing? And if such supervision is somehow justified, why is telemedicine not a permissible option for providing it? Since our ability to scale up Covid-19 testing hinges, in part, on the FDA’s answers to these questions, the American people deserve a thorough explanation.