SACRAMENTO (CBS13) — Tens of thousands of inconclusive COVID test results from California’s billion-dollar lab should be reported as positive, according to the FDA authorized PerkinElmer COVID test.

PerkinElmer’s $1.7 billion dollar COVID-testing contract with the California Department of Public Health  specifies that the lab must use that test according to the instructions for use outlined in the FDA’s Emergency Use Authorization (EUA). CBS13 has learned the state lab deviated from the FDA authorization, which means the COVID test that is being used in the state’s lab is no longer authorized by the FDA.

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CBS13 Investigates Problems at California’s COVID Testing Lab

Inconclusive Results

California was headed into the peak of the pandemic when CBS13 first discovered a high number of inconclusive COVID results coming out of the state’s new PerkinElmer public health lab in November.

When CBS13 questioned California’s Health and Human Services Secretary about the inconclusive results during a weekly press briefing, Dr. Mark Ghaly acknowledged that there had been “a higher number than expected,” pointing to a problem with a chemical reaction.

“One of the validation steps that confirms the necessary chemical reaction to run the test didn’t occur for some of those inconclusive tests,” Ghaly said. “We’ve identified some of the issues with why they didn’t occur and have since corrected it.”

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However, as CBS13 continued to press the California Department of Public Health (CDPH) for data related to inconclusive tests, the state changed its explanation.

In a January email, the agency pointed to the type of test used at the CDPH-PerkinElmer lab as the reason for the high number of inconclusive results.

They explained that their test is “able to detect lower levels of viral load than other tests on the market.” The state added that when low levels are detected “these are reported as inconclusive.”

Inconclusive Results Should Be Reported as Positive

However, according to the FDA, those “inconclusive results” are not authorized when using the PerkinElmer test. They say those “lower levels” of the virus should be reported as positive.

In a statement, the FDA explained:

“According to the authorized labeling for the PerkinElmer test, patients samples that have Ct values (less than) < 42 … should be reported as positive.

If a laboratory processing the test makes a change, they should not represent the test as EUA authorized.”

Simply put, the Ct value is a measure of viral load in the sample. More specifically, it is the number of cycles necessary for the PCR machine to identify the virus. The lower the number, the higher the viral load.

READ MORE: Questionable COVID Results: More Concerning Whistleblower Allegations From State Lab

The FDA authorized instructions for the PerkinElmer SARS-CoV-2 Assay (test) requires that any Ct levels below 42 must be reported as positive.

However, the California Department of Public Health told CBS13 that it reports results below 37 as positive and results between 37-42 as “inconclusive.”

This, according to the FDA, means “they should not represent the test as authorized” by the FDA.

PerkinElmer’s FDA-authorized instructions for use, which are included in the $1.7 billion dollar state contract, clearly state, “Authorized laboratories using your product must use your product as outlined in the Instructions for use.”

That state contract further specifies in multiple locations that the lab must use the Emergency Use Authorization (EUA) FDA authorized test (assay).

“Contractor warrants that the testing shall be performed with the EUA assay, and in accordance with the requirements of the EUA, and CLIA.”

“Contractor warrants that the results of the Services will be consistent with the technical capabilities of the EUA.”

“Specimen samples will be tested… in compliance with the requirements set forth in the FDA Emergency Use Authorization (the “EUA”) described in Attachment 2.”

Whistleblower Concerns

Several of the whistleblowers we’ve heard from, including former lab manager Mahnaz Salem, PhD., said that they warned management that the unauthorized changes would void the FDA’s Emergency Use Authorization (EUA).

Whistleblowers say that the lab is repeatedly changing test procedures, in an effort to improve the test and correct for errors, while they are reporting patient samples.

They pointed us to the lab’s procedures for “Analysis and Reporting,” which they noted, were changed five times in two months, following trial and error.

“Does that mean they are essentially experimenting with patient samples? They’re learning, they’re improving the test as they go?” CBS13 Investigative Reporter Julie Watts asked.

“Yes,” Dr. Salem said. “They are reporting patient samples and they are trying to troubleshoot.”

READ MORE: Questionable COVID Results: More Concerning Whistleblower Allegations From State Lab

CDPH has acknowledged in multiple responses, “this is an iterative process, and the laboratory is continuously improving.”

But whistleblowers stress the state should not be using patient samples to “iterate” or “improve” on the FDA-authorized test without patients’ knowledge or consent. They note that patients believe, and the $1.7 billion contract requires, that the lab is using an FDA-authorized test and procedures.

“Especially with them contracting through the state of California, you would think that they would have to follow testing regulations by the FDA,” one whistleblower said.

Standard Operating Procedures (SOP) 

CBS13 reviewed a copy of the lab’s Standard Operating Procedures (SOP) for “Analysis and Reporting,” effective as of January 25, 2021. It detailed five major revisions since December 8, 2020, ranging from renaming inconclusive results to removing requirements to re-test inconclusive results.

The document details, and whistleblowers confirmed, that until mid-December, it was standard procedure to report Ct values between 37-42 as negative, instead of positive.

The procedures were updated on December 13 to report those values as “inconclusive.” The SOP was updated again in late January “to call Inconclusive to (sic) Presumptive Positive.”

We sent a copy of the document to CDPH to review. The agency did not immediately respond.

READ MORE: Questionable COVID Results: More Concerning Whistleblower Allegations From State Lab

Presumptive Positive

CBS13 learned in January that the lab had quietly begun reporting “inconclusive” results to patients as  “presumptive positive.”

When questioned about the change, the agency provided the following response:

“We made the change to terminology to be more directive or instructive to the individual. We received feedback from local partners that an “inconclusive” result did not mean anything to an individual and that changing the terminology to be more descriptive would help ensure that the individual takes the appropriate action to mitigate the spread of the virus.”

However, the state said it was still reporting the “presumptive positive” results as “inconclusive” to CalREDIE (California Reportable Disease Information Exchange) for the purpose of reporting. The state clarified presumptive positive results “are not included in the positive case count.”

The Denial

For weeks, CBS13 questioned the state about veering from the FDA authorized procedures and using the test “off-label.”

CDPH insisted the PerkinElmer lab does not need approval from the FDA to change its procedures and insisted it was still using the test as authorized by the FDA.

This is an excerpt from a February 6, 2020 email exchange between CBS13 and CDPH:

CBS13: When did the lab change their CT range for inconclusive/presumptive positive tests…?

CDPH Response: The Ct range was never adjusted. As has been provided on multiple occasions, effective December 11 changes to the terminology were made to be more directive to the individual receiving the test result. The PerkinElmer EUA allows for a positive up to a Ct value of 42.

CBS13: Is the CDPH/PerkinElmer lab using an (Emergency Use Authorization) EUA Assay or a (Laboratory Developed Test) LDT Assay?

CDPH Response: The laboratory is using the assay approved by the FDA pursuant to the EUA.

CBS13: If EUA, can you provide a copy of the FDA approval for the change to the EUA?  

CDPH Response: The laboratory does not need approval from the FDA to change its Ct value cutoffs if within the original EUA parameters. The laboratory is operating within the parameters of the EUA.

Several lab directors we consulted with for this story disagreed with CDPH’s assertions. So did several whistleblowers — and the FDA.

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CBS13 Investigates Problems at California’s COVID Testing Lab

When CBS13 shared this exchange with the FDA, the agency clarified that the state’s inconclusive results (with Ct values between 37-42) should be reported as positive, adding:

“EUA authorized tests should be used in accordance with its authorization and as described in the authorized labeling.”

When CBS13 shared the FDA’s statement with CDPH, the agency finally conceded that its laboratory was not, in fact, “operating within the parameters of the EUA,” which is required under the $1.7 billion dollar PerkinElmer contract.

By going “off label” the test had become a “Laboratory Developed Test (LDT)” which are not reviewed or authorized by the FDA.

We asked why CDPH had falsely represented its test as FDA authorized (EUA) and if it was aware that the “inconclusive” results had voided its FDA authorization.

CDPH provided the following response:

“In our prior correspondence with you we mistakenly said that the laboratory was using the assay pursuant to the FDA Emergency Use Authorization, or EUA. To clarify, the assay is currently operating as a Laboratory Developed Test, or LDT.”

“To clarify, in terms of resulting and the cutoffs, the laboratory has made changes only to the result thresholds and interpretation under the authority of a Laboratory Developed Test (LDT). The LDT thresholds and interpretations were developed and validated based on characteristics of the patient population and testing sites. Out of an abundance of caution, and to be more conservative, the LDT determines Ct values up to 37 as positive, Ct values 37 to 42 as presumptive positive, and Ct values above 42 as negative.”

“The FDA oversees LDTs but currently does not require them to be submitted for Emergency Use Authorization.”

Lab Developed Tests

While high complexity laboratories are currently allowed to use their own Lab Developed Tests (LDT), the FDA clarifies the tests  “have not been reviewed by FDA” and “are not FDA authorized.”

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Labs using an LDT “are required to validate a test before using it, and the lab must produce records demonstrating validation if challenged.”

Whistleblowers have raised concerns about the validation for the changes at the CDPH-PerkinElmer lab, pointing to regularly changing procedures.

When asked if they had reviewed the CDPH-PerkinElmer validation, federal regulators said there has been no onsite survey of the lab.

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Other Labs Using the PerkinElmer Test

Lab Developed Tests may not be marketed, distributed or sold outside of the lab that is developing the test.

There are several other labs using the PerkinElmer SARS-CoV-2 Assay, and at least one tells CBS13 they are also using the LDT procedures that are being developed by PerkinElmer at the state lab.

One private lab we spoke with that is using the PerkinElmer test said they do not report results between 37 and 42 as inconclusive. Instead, they rerun the test using another assay (test), to confirm whether results within that range are actually positive or negative.

The Sonoma County Public Health lab said it, “follows the EUA for the PerkinElmer assay” and reports Ct values below 42 as “detected” (positive) per the EUA.

Similarly, the Contra Costa Public Health Lab said it follows the guidelines “in the Perkin Elmer EUA and calls CT values between 37-42 as positive.”

CONTINUING COVERAGE:
CBS13 Investigates Problems at California’s COVID Testing Lab

However, the San Francisco Public Health Lab (SFPHL) appears to be using the PerkinElmer LDT procedures that are being developed in the state lab.

When we asked SFPHL if the lab reported results below 42 as positive, per the EUA, we received the following response:

“Recent changes to the EUA for the PerkinElmer instrument led the San Francisco Public Health Laboratory to begin re-running test results with a Ct value between 37 and 42, using a freshly extracted specimen from the original specimen tube. If the result comes back between 37 and 42 a second time, SFPHL records it as inconclusive.”

We followed up by pointing out that, according to the FDA, the current EUA requires that Ct levels below 42 are reported as positive. We asked if the lab was aware of an updated EUA.

They have not provided a response.

Adding to the confusion of what “inconclusive” results really mean, SFPHL also said that “lab results for COVID-19 tests may be inconclusive for reasons not limited to lab practices, including collection practices.”

Many labs we spoke with say they re-run inconclusive results. However, according to the CDPH-PerkinElmer procedures reviewed by CBS13, the state lab “removed(ed) the requirement to re-test inconclusive” results on December 16, 2020.

CDPH confirmed its lab does not re-run inconclusive tests.

Cost to taxpayers

For weeks CBS13 has been requesting data related to the cost of the state’s lab to taxpayers.

In October, the governor said the state had spent $125 million to build out and set up the lab, including purchasing equipment.

The contract states that “All Equipment is provided by Contractor on a no-cost loan basis,” and that “All Equipment shall remain the property of Contractor.”

According to the contract, as the landlord, CDPH is responsible for facility costs including utilities, internet, backup generators, refrigeration, etc.

The contract also allows for monthly reimbursements:

On a monthly basis, CDPH shall reimburse Contractor for Facility management and maintenance, including, but not limited to, personnel costs, actual third-party service provider expenses including cleaning and biohazard disposal, and associated overhead.

When we asked for specifics related to the current cost per test and other monthly costs to the state, the state would only say, “We’re currently operating the lab at a capacity of 100,000 tests/day.”

The contract lists a “variable fee per test performed” of between $18-$18.85 for 100,000 average daily tests performed.

However, separate data provided by the state indicates that the lab-processed 558,350 tests total in January and even fewer tests per month late last year. That amounts to an average of fewer than 20,000 tests/day.

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Several whistleblowers said they were surprised to learn, from our initial report, that CDPH told CBS13 that it was paying PerkinElmer the contracted rate for 100,000 tests/day.

According to PerkinElmer, the lab has a capacity to process 100,000 tests per day, but whistleblowers say they have not had the opportunity to prove that and they question if the staff is currently capable of meeting that goal, especially as experienced staff continues to quit.

A whistleblower we’re calling “Beth” said there are days that they process closer to 2,000 tests.

“I strongly, strongly do feel like they are taking advantage of the contract with the government,” said “Nicole,” another whistleblower.

In an updated statement after our story aired Thursday night, but before this article was published, CDPH said:

“It would be inaccurate to say the state has paid PerkinElmer $1.7 billion. As noted in the contract, the state pays a fixed price based on volume and pays for each test based on the exact volume.

Further, the state collects health insurance information and bills insurers to recoup the cost of testing. The actual amount paid to PerkinElmer to date is $286.2 million. This amount does not account for funding recouped from health insurers.”

The state has not provided specifics on how much they have recouped from insurers.

Does the “Lab Developed” Test Violate the $1.7 Billion Dollar Contract? 

When we asked why the lab had been falsely representing their testing procedures as FDA authorized (EUA), the agency called it a mistake:

“We mistakenly said that the laboratory was using the assay pursuant to the FDA Emergency Use Authorization, or EUA.

We also asked, several times, if CDPH was aware that the contract between PerkinElmer and the state required that the test be FDA authorized and be used according to the FDA authorized instructions for PerkinElmer’s test.

Thursday night, just before our story aired, the state responded stating:

“We are aware of the contractual obligations as we wrote them.”

CBS13 pressed the state for a more specific response, noting that the $1.7 billion dollar contract was written by the agency, on behalf of California taxpayers.

A spokeswoman for the California Health and Human Services Agency (CHHS), which oversees CDPH, had previously stressed, The state’s contract with Perkins contains strong language to protect both the state and the taxpayers.”

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“What is the state’s response to California taxpayers regarding the fact that PerkinElmer is performing tests on Californians in violation of the $1.7 Billion Dollar contract?” CBS13 asked in an email Thursday night.

CDPH replied Friday, pointing to this clause in the contract that allows them to make changes to the scope of work.

“The parties acknowledge that this Agreement is intended to provide immediate testing of SARS CoV-2 samples using the currently available testing technology and methodology. However, recognizing that SARS CoV-2 diagnostic testing technology and methodology is continually evolving, the current SOW and/or cost may be subject to changes and/or modification as needed and upon mutual agreement of the parties.”

Notably, the contract has not been updated to include the new “scope of work” and taxpayers have not been notified of any changes.

The contract also states:

“No alteration or variation of the terms of this Agreement shall be valid unless made in writing and signed by the parties hereto, and no oral understanding or agreement not incorporated herein, shall be binding on any of the parties hereto.”

Based on multiple responses, CDPH didn’t even appear to be aware that the FDA authorization had been voided as a result of the “inconclusive results” until we told them this week.

And, as whistleblowers point out, the Californians that rely on these tests for crucial COVID-19 diagnoses, have no idea that their results are not authorized by the FDA, or that the lab is “iterating” its testing procedures while releasing crucial COVID-19 results.

“We cannot do experiments while we are testing patient samples,” Dr. Salem insisted.

This is just one of many reasons that whistleblowers are calling for federal regulators to step in and take over the CDPH investigation of its own state lab.

READ MORE: Questionable COVID Results: More Concerning Whistleblower Allegations From State Lab

The Investigation 

CDPH has not provided an update on their investigation that began two weeks ago following our initial whistleblower report. 

The College of American Pathologists (CAP) was scheduled to perform an accreditation inspection on Friday, at the request of PerkinElmer.

The Centers for Medicare & Medicaid Services (CMS), which oversees laboratory testing, provided the following response:

To protect the integrity of our survey process, CMS is unable at this time to discuss any potential surveys or enforcement actions related to this laboratory. If an individual would like to file a complaint about a California laboratory or obtain information related to laboratory personnel requirements, they may contact the California Department of Public Health, Division of Laboratory Science, Laboratory Field Services (CDPH-LFS). Individuals may also file a complaint with CMS’ San Francisco location by email at CLIA_SanFrancisco_Office@cms.hhs.gov or by telephone (415) 744-3699

An initial CLIA onsite certification survey is pending. Therefore, there is no CLIA survey report available. Qualified personnel must meet CLIA and applicable state licensure requirements to report patient test results. Regulations do not require that a laboratory enroll in COVID-19 proficiency testing; therefore, no proficiency test reports are available.

 

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NOTE: This story originally aired on 2/18/21 but was published online on 2/19/21 and was updated with additional excerpts from the state contract and to clarify that the PerkinElmer Equipment is on loan to the state.

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CBS13 Investigates Problems at California’s COVID Testing Lab

Julie Watts