NT$14 Billion Cake：Rapid Test Kit EUA Yields Amazing Profits Make You Rich？
United Daily News, June 26, 2022
Since the local pandemic from April, scandals like the Gordon case and Daxin fraudulent rapid test kits have become common. According to the information obtained by this newspaper, from April to June 12 when the epidemic reached its peak in Taiwan, a total of about 296 million rapid test kits were imported, and the business opportunity was estimated to be up to about $1 billion U.S. dollars. So far, a total of 326 business entities have applied for emergency use authorization (EUA), and 33 of them had been granted EUA. If we deducted the largest number of test kits imported by Roche, Abbott and others, the remaining business entities have sold 140 million kits, making a profit of $50 million U.S. dollars at least, with an average profit of about $14 million U.S. dollars for each business entity.
FDA Accused of Granting EUA to Small Businesses
Although the sale benefits of rapid test kits were astounding, the Food and Drug Administration (FDA), Ministry of Health and Welfare, faces controversy due to the EUA review process to the composition of the staff team. Legislator Tseng Ming-chung, whip of the opposition Kuomintang (KMT) caucus of the Legislative Yuan, indicated that central government's failure to make advanced preparations for the EUA had resulted in a shortage of rapid test kits. In the event of the said shortage, did the FDA fast-track the review process for the issuance of EUA irregularly? There are thousands of medical equipment companies, large or small, in Taipei and the New Taipei. How come the EUAs were granted to some small businesses with capital totaling only around $18,000 U.S. dollars each, and even to the snack store and companies being engaged in pyramid scheme as well?
A public relations company pressed forward immediately after businesses submitted supplemental documents. According to Legislator Tseng, a total of 326 manufacturers applied for EUA, and the approval rate was about 10 percent. Among approved companies, at least eight were controversial. Director-General Wu Shou-mei of the FDA should step down for her ineffectiveness as a gate-keeper.
An EUA applicant company was asked by the FDA staff to provide this competent medical authority additional documents. Surprisingly, the next day a public relations company claimed it could "chip in to help." Since only the FDA desk officers were able to receive the application form, together with its enclosures and contact details, from the applicants. They should keep the phone numbers of the applicants in a safe place. It was questioned that someone at the FDA “assumed an inside job," said KMT Legislator Wan Mei-ling.
FDA: EUA Application Decided by Consensus
According to Director-General Wu, when an application for EUA is received, it would be reviewed by medical cosmetics division of the FDA which is composed of the professional staff with different expertise. The reviewers include permanent staff and contract staff. Application would be decided by consensus among staff.
As for the FDA EUA review mechanism, Director-General Wu pointed out that it is in accordance with the existing laws and regulations. The review would focus on safety, performance, related inspection and information regarding company’s registration. The reporter then asked the detailed review process of EUA. Wu exclaimed, "Jesus! What the hell do you want?" Then she hung up the phone abruptly.
Key to Profit-Taking?
According to industry sources, the crux of the issue was that the demand for rapid test kits in Taiwan was extremely strong in April and May, while the supply was quite limited then. President Tsai Ing-wen even announced May 6 that "100 million rapid test kits will arrive at the end of May," and each company sought to rush to import the rapid test kits for the sake of making money fast, "the more you import, the more you earn." Conservatively speaking, the importer could earn as much as $3.33 U.S. dollars per test kit. The medical material manufacturer indicated that at that time, those who held the EUA were kings because the EUA is the pre-condition for importing the rapid test kit. The EUA holders requested the distributers to follow “pay first, pick up later” approach. For example, when the EUA was obtained by the manufacturer, the downstream distributors rushed to place an order for hundreds of thousands or millions of test kits and take the delivery as long as their payment was made. The importers with the EUA almost didn't have to bear the cost, because with the distributor's pre-payment, they bought the rapid test kits from the original manufacturer. As a result, importers can realize profit once test kits change hands. The EUA was really the key to profit-taking.