A Velumani explains how Covid-19 testing failed us when we needed it most

A Velumani is not the most popular figure in India’s healthcare sector. When he set up his company, Thyrocare, in 1996 in Mumbai, he disrupted India’s $9 billion diagnostics industry, cutting pricing across tests. As a result, he has routinely faced accusations of his tests being substandard, false or untrustworthy, with doctors across India refusing Thyrocare results and asking patients to re-test at other labs before giving their diagnosis. Being a disruptor in any industry comes at a price.

Velumani and I first met in 2016 on the sidelines of a conference he was attending in Gurugram. We have stayed in touch since and are now meeting virtually over coffee after I urged him to explain in some detail what went so wrong with our testing capabilities during the second wave of the pandemic in early April. After all, with experience of the first wave, things should have surely improved. Instead, they worsened. Why did getting an RT-PCR test prove a challenge as mammoth as surmounting K2?

Speaking from his home-cum-office in Navi Mumbai (I’m in Dehradun), he explains: At the beginning of the crisis, labs were charging as much as Rs 4,500 for a home test. As the government woke up to what it felt were extortionary rates and pricing, it swung the pendulum to the other extreme and in many states, labs and third-party collection agents were asked to do tests for Rs 450, making it unviable and unattractive. Both collection and testing lost their lure. In his view, had matters been left to themselves, competition would have resulted in a market-driven price discovery that would be “more or less” fair. He cites the instance of Uber and Ola who compete and charge based on the market’s ability to pay. Instead, the forced steady reduction in margins ensured everyone lost motivation and the system collapsed.

Two other factors compounded matters. The second wave has been far more explosive than anticipated, affecting over 300,000 people a day. The sheer volume of the requirement hit the industry like a tonne of bricks.

To add to this “unnatural surge”, many technicians and sample collectors fell ill, so an acute shortage of personnel gripped the industry. Moreover, the distribution between where the testing was required and where it was available was skewed.

“It’s like one part of the country was facing a flood, while the other was grappling with a drought,” he says. As a result, the total capacity to test remained underutilised: India’s total RT-PCR testing capacity is 2.5 million per day and data indicates 1.8 million was being utilised.

Complacency, too, played a part. During the first wave, the return on investment from the business angle was motivating, so all the labs and diagnostic centres kept expanding. Then the peak came in September and most labs saw a sharp drop in testing — from 12,000 to 2,000 a day at labs, so everyone stopped expanding. “Many began to think the pandemic was over,” he says, taking a sip of his coffee. I, as usual, have a glass of water by my side.

Thyrocare had the capacity to do 200 tests a day when the pandemic began in March 2020. It has since ramped up to 40,000 tests a day, 25,000 of which are done in Mumbai. Since last March, the com­pany has conducted 1.3 million tests and earned a revenue of Rs 110 crore from it. His profit margin, Velumani says, is alm­ost 40 per cent since he is working on scale and exploiting all operational efficiencies.

I interrupt to ask how anyone in their right mind could think India would avoid a second wave when globally we could see it unfolding in country after country. Did he, for instance, actually think after the first wave that the worst was over and the pandemic was behind us? He glosses over what he thought but says that “we chose to overlook the reality” and engage in early celebrations — the citizens, the Centre and the states, everyone. In February and March, almost everyone let their guard down with devastating consequences for all.

He then indulges in some characteristic Velumani-style free speaking, another factor that adds to his unpopularity. In a recent interview, he said that if India fails to provide oxygen to its citizens, it is tantamount to “murder”, not “death”. That statement has likely put paid to any chance of him getting a high-profile industry body appointment in the near future.

But as we chat, I realise Velumani is not here to win popularity contests. He is convinced that the first wave was far bigger than data indicates. Had we tested more aggressively, the numbers of those infected would have been much higher. Secondly, the actual numbers were further suppressed in the first wave since many tests were rapid antigen, which has a much lower rate of positivity and accuracy.

I change tack: We can, I realise, spend the entire week dwelling on everything that went wrong. How do we ensure going forward that at least the testing doesn’t falter the way it did?

In his view, ideally, states should do all collections at primary and secondary health centres, government hospitals and perhaps even at State Bank of India branches across the country with appropriate setups. The government should restrict itself to collection and refrain from doing the tests, and instead ask private labs to bid to do the tests for them at a certain price.

He cites the example of Jharkhand, which recently asked the labs to bid. The price has to be flexible enough to allow for different costs and efficiencies as all labs function differently, but at kiosk collection booths it could be set at Rs 500 per test. Those below the poverty line can be tested for free and the government can pay for that. “By getting into both collection of samples and testing, the government has in some ways bitten off more than it can chew,” he says.

At a country-wide level, he thinks we need to move away from home testing. Neither do home test rates need to be fixed since they apply to the rich and could be at a minimum of Rs 1,000.

Meanwhile, kiosk testing booths that are being set up locally in some states need to be speeded up. This was something he’d suggested as early as May 2020, but it didn’t find resonance then.

Thyrocare has set up around 100 testing kiosks and is expan­d­ing them, although progress remains slow and patchy across states. Despite the urgency, approvals from local authorities are taking longer than they should, he says.

As we come to the end of our rather dismal chat, we again rue the developments of the last few weeks, scars of which are likely to stay with us for a long time to come. If there is a light at the end of this tunnel, it is not visible yet.