Yahoo Finance British company accused of supplying NHS ‘faulty’ Covid tests pays UK £5m
A British biotech business that produced thousands of Covid-19 tests during the pandemic has agreed to pay the Government £5m to settle claims they were defective.
Novacyt said it had struck a deal with the Department of Health and Social Care ahead of a High Court trial scheduled to take place this week.
Under the settlement, Novacyt is making a £5m payment to the Government. Shares in Novacyt plunged almost a fifth on the news.
The company has lost around 95pc of its value since early 2020.
It brings an end to a lengthy and bitter row between the Government and Novacyt over the Covid-19 tests, which centred on claims that the tests “failed at an unacceptable rate”.
The Department of Health and Social Care launched a lawsuit against Novacyt and subsidiary Primer Design Ltd in early 2022, suing them for £145m over claims they breached their 2020 contract by selling the Government thousands of PCR tests which failed at “unduly high” levels.
Novacyt was paid to deliver 288,000 kits per week to the NHS at the height of the pandemic.
However, concerns about the kit were raised by the Government’s validation group, which assessed how sensitive tests were and whether they produced false negatives.
Adam Heppinstall KC, representing the government department, said in April that the rate of failure was “far in excess” of anything that could be tolerated.
He added: “Time is of the essence and the quality and robustness of the test is very important. A false negative is frankly very dangerous for public health.”
The tests were never rolled out by the NHS.
Novacyt and Primer Design had claimed evidence suggesting their tests failed to spot Covid-19 was “seriously and obviously flawed”.
They argued that errors had been made in assessing the laboratory results.
Novacyt and Primer Design had launched a counter claim for £70m over three unpaid invoices.
Following the settlement, the cases will now no longer proceed to trial.
Neither party made any admission of liability or wrongdoing in respect of the claim or counterclaim or otherwise.
