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India is one of the world’s worst-hit nations in terms of the covid pandemic’s spread. As of 29 April 2021, the country had crossed 3 million active cases and recorded over 200,000 fatalities. Given the signs of vaccine shortage and more than three times the number of daily cases in the second wave than in the first, it is more important than ever to identify new infections and contain the spread of covid through testing. Besides, complete vaccination coverage could take many more months at the current rate of around 2 million per day. Also, vaccine efficacy against new mutations is not known, nor the duration of immunity afforded by jabs. Therefore, widespread, efficient and equitable testing remains a critical aspect of our overall response to the pandemic.

The current testing rate in India is lower than what it needs to be. For better pandemic control, the testing dynamics should be such that anyone who wishes to get tested is able to get one. In low-to-middle-income countries like India, affordability is a key determinant of testing uptake. Therefore, test prices play a significant role in determining the rate of testing. While a government policy of price caps can make a difference here, this has economic inefficiencies. Price reductions should flow from ironing out inefficiencies in the value chain. Over the past year, the cost in India of the Reverse Transcription-Polymerase Chain Reaction (RT-PCR) test, considered the gold standard for covid confirmation, has come down sharply from over 3,000 in the early days of the outbreak to less than 650 now. Much of this is driven by a reduction in the cost of consumables, brought down by fostering competition in the manufacturing arena and retail markets, and by leveraging economies of scale. However, to improve the testing rate, new avenues must be explored to lower the cost of testing further.

Here, we list several ways to reduce the cost of the RT-PCR test. First, our analysis in an upcoming study titled Drivers of improving cost efficiency of covid-19 testing in India suggests that procuring testing consumables through a consolidated and pooled procurement mechanism, in which a central agency negotiates with different sellers and provides the product to all buyers at a uniform and much lower cost, can potentially reduce the unit cost of testing in the public sector by over 40%. Second, by our estimates, pooled testing (mixing several samples in a batch and then testing the lot) can bring down the unit cost of testing for public labs by over 50%. Third, combining pooled testing with consolidated procurement can bring down the unit cost of testing by an additional 15%. Thus, by implementing just these two strategies, the cost of an RT-PCR test can be reduced by over 60%. Fourth, optimizing processes, using a lab network for apt load balancing, and efficient sample collection and transportation protocols could help obtain further cost reductions. Last, our testing system needs to be incentive compatible for the private sector’s active engagement. The active participation of private labs would reduce the burden on public infrastructure and foster a competitive ecosystem, hence further lowering the cost of testing.

In addition to using the above-mentioned cost reduction levers, formulating a sustainable testing framework is crucial. A careful cost-benefit evaluation of healthcare innovations, such as novel testing strategies, methods and technologies, will play a key role. The optimal use of different novel testing strategies, such as antigen+RT-PCR, where everyone is first screened via a rapid antigen test and only a proportion of ‘positive’ people are given a confirmatory RT-PCR test, can optimize the use of RT-PCR kit supply. New investments from the government and the private sector in modern artificial intelligence healthcare technologies, such the one developed by Mumbai-based Qure.ai, could lower the initial screening burden on the RT-PCR infrastructure. Evaluating the merits and incentive-compatibility of new technologies, such as Feluda, Abbot antigen and SpectraLit, which tend to break trade-offs among accuracy, cost and accessibility, can cater to special testing requirements, such as quick turnaround time and/or remote testing. In addition to healthcare innovations, reducing dependency on other countries through the promotion of indigenous production could also play a good role in sustaining our testing efforts. While the domestic production of test-kit components might not immediately offer the benefits of economies-of-scale that some other nations enjoy, it will help create a stable, sustainable and resilient supply system that would aid our preparedness for similar situations in the future.

The ongoing second wave has shown that our fight against covid is far from over. Establishing an affordable, equitable and sustainable system for testing is crucial in tackling the current pandemic. Moreover, the improvements we make now in India’s testing framework will hold us in good stead for a long time to come.

Note: While the authors arrived at the mentioned estimates through careful calculations, several assumptions have been made in the analysis that might account for departures from actual numbers.

Ashish Sachdeva & Aman Kabra are, respectively, research director and analyst at Max Institute of Healthcare Management, Indian School of Business

Sarang Deo, executive director of Max Institute of Healthcare Management and professor of operations management at Indian School of Business, contributed to this column.

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