The Antrim-based company that made hundreds of millions from Covid-19 contracts wants to normalise private health testing
In a warehouse so vast it once housed torpedoes during the second World War, Randox marshalled its troops of testers to detect Covid-19 across the UK. Like wars, pandemics spur innovation and the Northern diagnostics company adapted quickly. Within weeks of the outbreak, it created a test, rapidly scaled up in a time of shortage by making its own chemicals and machines, and developed robots to get tests done faster.
Along the way, Randox became one of the so-called winners of the pandemic, making a fortune and increasing its brand recognition. While its work was key in the UK’s fight against Covid, it also came under scrutiny for its links to the UK government as concerns were raised about the procurement process.
Now the need for testing is easing, Randox intends to use the hundreds of millions of pounds it made in the pandemic for a new purpose: giving people control over their own health tests.
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Peter Fitzgerald, a scientist, founded the company 40 years ago, leading Randox as it outgrew its original office in a former chicken shed. The company expanded to distribute its products to test for everything from diabetes to infectious diseases in more than 145 countries, before investing in novel diagnostics.
Unhappy with the UK’s approach to testing, Fitzgerald long dreamt of transforming healthcare by screening asymptomatic people to identify latent medical problems. Testing is essential, he says, to really understand what’s going on inside the body.
While the second World War proved the power of the public sector, making the case for a national health service in the UK, the pandemic pushed the government there and in the Republic towards private providers for testing and extra hospital beds. As the public health services struggle to clear record backlogs, more patients are opting for private care — and Randox hopes more people will want help to spot early signs of illness.
Randox always had a plan to expand its health clinics. But it had far less money to fund its ambitions, making a loss of £12.5 million (€14.8 million) in the 18 months ending in June 2020, and a profit of £167,000 in the period before that. After winning 22 UK government testing contracts totalling £469 million, plus revenues from its private Covid testing business (which also operated in the Republic), Randox generated a pretax profit of £275 million in the year to June 2021.
UK politicians and rivals questioned whether Randox had won UK Covid testing contracts fairly, raising eyebrows at the company paying Owen Paterson, then a Conservative MP and former secretary of state for Northern Ireland, £100,000 a year as a consultant. Investigations into the UK government’s contracts with Randox cleared the company of any wrongdoing.
The situation, coupled with the company’s huge increase in revenue, led to accusations that Randox profiteered from the pandemic. It is something the company denies, defending its testing supply as efficient and cost-effective. Moving ownership of the group offshore to an Isle of Man holding company added further fuel to the debate, though the company says the process began in 2019 and both Randox and Fitzgerald remain tax resident in the UK.
Fitzgerald says he is “very happy” with the company’s moral and ethical decisions, and that Paterson played no role in their winning contracts. “Some people read below the headlines, and our sales increased,” he adds. “People seemed to think, well they are supposedly well-connected, they must be all right.”
It was Saturday January 26th, 2020, when Fitzgerald says his son showed him a news report of the Chinese government stepping up its response to the novel coronavirus. The following day, Fitzgerald sent his scientists into the lab to develop a test. Randox says Paterson asked the UK government for a virus sample to check the test but, in the end, procured one itself.
A couple of weeks later, Randox emailed the UK department of health to pitch its new Covid diagnostic. Mark Campbell, the company’s senior manager, says it was unclear whether the government would do all the testing itself or enlist the help of private providers. “We were just doing what we felt was right given the circumstances,” he adds.
When Randox signed its first contract in March 2020, the NHS was conducting about 5,000 PCR tests a day. By September, the company had scaled up to 150,000 tests a day but, Campbell says, it had capacity for up to 500,000. In total, Randox carried out 17.5 million tests for the UK government — detecting 1 million patients with Covid — while also testing for private employers including Facebook and Rolls-Royce, as well as travel testing for border entry requirements.
The company moved fast: early on, it put in a three-month order for pipette tips that are crucial for PCR testing. The size of the order was the equivalent of the world’s supply in a normal year. The UK National Audit Office (NAO) report said Randox also needed government help to procure equipment in short supply. The company says this was a temporary loan of unused PCR equipment from universities until its own orders arrived.
Rival private labs were disgruntled that Randox won not just the initial contract, but another one in October, when they felt equally prepared to meet the challenge. Ultimately, the UK government struck contracts with 10 other private testing providers.
Some in the NHS believe an opportunity was missed to invest in the public sector. Allan Wilson, who in 2020 was president of the UK Institute for Biomedical Science, the professional body for lab scientists, says contracts were awarded without consulting the NHS on how it would have scaled up testing.
“What do you do with these large labs that are basically no longer required?” he asks. “The NHS may have been able to utilise some of those resources for NHS testing.”
Fitzgerald says the NHS is too fragmented to meet the demand and had to focus on looking after Covid patients, as well as its regular blood testing. “I suspect [the Department of Health] did the right thing to set up labs and engage whatever private sectors could respond,” he adds. “We did investment ourselves. We weren’t getting investment from anybody else to do it.”
The NAO found no evidence that the contracts were awarded improperly and said the urgency during the first wave of the pandemic made it necessary to sidestep the normal tendering process.
But the House of Commons public accounts committee, which monitors public spending, concluded that the UK government’s “woefully inadequate record-keeping” means it is “impossible to have confidence” that the contracts were won fairly. It also raised concerns that the government did not do enough to ensure Randox was not making excess profits.
Fitzgerald felt the criticism from the press and politicians was unfair. “We knew there were things going on we had no control of and we knew there was fighting within the government. There were different factions, there was the public-private thing ... but we had no influence on them. So all we did was ... be better than everybody else,” he says.
It was a situation with “no rule book to go to [and] no blueprint”, adds Campbell. “They were asking us to set up something that’s never been set up before,” he says. “I don’t know what due diligence you do apart from looking at the organisation, meeting the people, and having a belief that they have the passion to drive it through.”
The UK Department of Health and Social Care said the UK government “rightly took every possible step to rapidly build the largest testing industry in UK history from scratch” and that Randox, and others, made a “significant contribution”.
“Our Covid testing programme drew on expertise from right across the public and private sectors to get the appropriate skills, equipment and logistics in place as quickly as possible,” it added.
The next stage of Randox’s expansion can be seen in its bold advertisements across the London Underground, proclaiming that its test packages offer customers the “power to extend your life”.
“One in five funerals that you go to is unnecessary. That’s very striking,” Campbell says, citing UK figures on avoidable mortality, defined by the Office for National Statistics as deaths from causes that can be prevented or treated with timely and effective healthcare or public health interventions. Randox also cites research that shows early detection of conditions including cancer and diabetes saves lives and cuts healthcare costs.
From the early 2000s, Randox invested about £450 million in developing a biochip — the size of a piece of Lego — which can rapidly process a range of tests from a small blood sample. But they found introducing new tests to the NHS was complex and time-consuming, with doctors tending to stick to a small slice of what their technology could do — and only testing people with symptoms.
“We felt like we would develop all these fantastic tests that could save lives,” says Campbell. “Yet, they were not being utilised.”
So the company launched its first health clinic in 2008 and gambled on consumers paying for the information themselves. The clinic — next to a petrol station in Crumlin, near their headquarters in Antrim — was popular with the local community but a second branch just 35 miles away, where the Randox brand was unknown, did not do as well.
[ Inside Randox, the Northern company at the heart of the UK Covid testingOpens in new window ]
Then in 2012, it opened in the City of London, where Fitzgerald assumed the “well heeled” would be likely customers but quickly realised they were content with private healthcare benefits provided by their employers. Instead, it was a hit with “small business owners and builders, farmers, people who are restaurant owners, people who have to be healthy to survive,” he says.
Now the company is aiming for 20 high street clinics by the end of the year, with plans to open more in Europe, the US and Australia. The clinics offer full body health checks ranging from £199 for athletes to track more than 80 results, to a £2,600 “signature” package with 350 data points and a GP consultation, as well as follow-ups.
Randox sponsors the Grand National horse race, handled the Covid testing for Team GB at the Tokyo Olympics, and has partnered with reality TV stars such as Made in Chelsea’s Tristan Phipps whose Instagram shows him attending a clinic and exclaiming: “Health is wealth!”
This is part of a broader push towards preventive care, with companies trying to engage users in monitoring their health, from using Apple Watches to detect cardiac conditions, to clinical trials of blood tests designed to capture the earliest signs of cancer.
Randox says it is investing all of its pandemic profits in research and development, infrastructure for diagnostics programmes, and its clinics. It is building a 50,000 square foot research facility near its Antrim headquarters, and opening an institute in London’s Fitzroy Square, specialising in immune-related conditions.
While the aim of business is “to make money”, Fitzgerald says, “it’s what you do with it” that is important.
But tests alone can’t extend lives unless they lead to treatments — and Randox admits that integrating its health reports into the NHS is a daily preoccupation. So far, it is mostly private GPs and hospitals that will consider the Randox reports. “Increasingly, the NHS is recognising it but it is still slow,” Fitzgerald says.
Critics are concerned that private testing providers such as Randox end up hurting, rather than helping, the UK health service. They fear the “worried well” will pile pressure on overstretched GPs, or that patients could jump the queue for treatment after getting a private test, exacerbating inequalities in the system.
The NHS doesn’t just look at whether a particular test works, it examines whether it is useful and leads to treatments, for example, and delivers reliable results. It is investing £2.3 billion to expand testing, increasing the number of diagnostics centres to 160 by 2025. But beyond existing programmes such as those for smear tests and colonoscopies, it is firmly focused on people with symptoms.
Carl Heneghan, director of the University of Oxford’s Centre for Evidence-Based Medicine, says when screening — testing the asymptomatic — there is a “very clear requirement for a high-quality evidence base to show that the benefits outweigh the harms”.
“Often people take tests with the sort of belief system that surely it is better for me to know [there is something wrong] than not know,” he says. The problem comes, he explains, when they get an abnormal result and there are no clear next steps: “In an awful lot of disease that is detected, there is no actual benefit and no reduction in mortality.”
Heneghan also worries that marketing from companies such as Randox can induce anxiety. “We’re coming out of the Covid pandemic that was all about fear, and there’s a sense that you can play on that,” he says. Randox denies this, saying it wants to enable people to lead healthier, longer lives.
Others are concerned that opening the door to private providers during the pandemic accelerated a transfer of more healthcare funding to the private sector. Allyson Pollock, a clinical professor of public health at Newcastle University, says the pandemic has been “very useful cover” for the increasing power of private providers. “We use a crisis to privatise and outsource, and then carry on outsourcing. It’s quite tragic,” she says.
While Randox currently provides testing materials to NHS labs, it is not doing any work on its behalf. But it is likely to benefit from a trend of more people paying for healthcare. A poll from March by the Institute for Public Policy Research (IPPR), a progressive think-tank, showed one in eight patients had used a private practice as they struggled to access the NHS during the pandemic, and one in five had considered doing so.
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Parth Patel, a senior research fellow at IPPR and an NHS doctor, says neither the government nor the two contenders to be the next prime minister, Liz Truss or Rishi Sunak, are talking enough about the crisis in the NHS. “To some extent, [their] inaction is action,” he adds. “There isn’t an ideological opposition to this two-tier system.
“We basically privatised Covid testing through the pandemic instead of expanding our own lab capacity,” he says. “Companies made loads of money out of it, when the NHS could have used it to open even more diagnostic centres. That capacity should actually be part of the NHS, whether the NHS is contracting Randox to do it or not.”
One of the drivers of Randox’s success is the freedom to spend its resources as it likes. As a private company, Randox is under no pressure to justify its spending, says Fitzgerald, and when Covid broke out, it already had skilled technologists who could create systems to deliver test results online and automate the labs.
Fitzgerald is not sure of the demand for health tests but, after 40 years in the diagnostics business, he is unlikely to give up. “We think it’s a growing market but we don’t truly know,” he says. “It will gather momentum ... but it might take a wee bit of pushing.” — Copyright The Financial Times Limited 2022
