Cost estimation of COVID Kavach test developed in 2020: A National Reference Laboratory initiative during early phase of Indian pandemic mitigation

The human race suffered due to the pandemic of coronavirus disease-2019 (COVID-19) for more than two years since the first case was detected in Wuhan, China, in December 20191. Severe acute respiratory syndrome coronavirus-2 (SARS-CoV-2) is a respiratory virus with high air-borne transmissibility and responsible for COVID-19. The spread of the virus can be restricted by early detection and isolation of an infected person2. However, if the person infected with SARS-CoV-2 remains asymptomatic, identifying such individuals and isolating them become difficult. Transmission of SARS-CoV-2 virus by such asymptomatic carriers has been reported by various studies3,4 and proved a major contributor to the COVID-19 pandemic4. These asymptomatic carriers can be identified by testing contacts of SARS-CoV-2 infected individuals.

There are different ways by which one can diagnose COVID-19 cases such as detection of viral genetic material or antigen in the throat and nasal swabs, detection of virus-specific antibodies in blood and direct examination of the lungs by high-resolution computed tomography scan or chest X-ray5. Detection of antibodies against SARS-CoV-2 provides information about the past infection, while real-time reverse transcription-polymerase chain reaction (rRT-PCR) and rapid antigen detection tests inform us about the current infection6.

Testing for virus-specific antibodies is a more accurate measure of the number of people who are exposed to the virus and can explain the magnitude of viral transmission occurring in a population over time7. Despite some limitations, antibody-based tests have the advantage of detecting covert infections occurring in the past few weeks or months over rRT-PCR or rapid antigen test8. Population based testing is essential for disease surveillance and to be able to recognise the spread of the disease in a community. In a pandemic situation, disease surveillance incurs huge costs depending on the population size and the geographical regions8. Appropriate budget allocation in such a situation becomes crucial and faces many challenges.

In response to the need for serological assay, an indigenous IgG enzyme-linked immunosorbent assay (ELISA; COVID Kavach) for the detection of anti-SARS-CoV-2 IgG was developed by the Indian Council of Medical Research-National Institute of Virology (ICMR-NIV), Pune, India9. This study presents the first detailed cost estimates on two counts; (a) the total development cost (TDC), and (b) the unit cost (UC) of the COVID Kavach test at the National Reference Laboratory (ICMR-NIV) from provider’s perspective. These cost estimates are explicitly applicable to the initial pandemic mitigation efforts in the country.

Material & Methods

This study was conducted by the Diagnostic Virology group (DVG) and biosafety level-4 (BSL-4) laboratory of the ICMR-NIV, Pune, India after obtaining approval from the Institutional Ethics Committee. In this study, DVG and BSL-4 were the major cost centres selected with the administration and maintenance unit (AMU) section as supportive cost centres.

The TDC and UC of COVID Kavach was estimated using the bottom-up micro-costing approach to evaluate the fixed and variable costs as described by Drummond et al10 and Minhas et al11. The TDC was defined as the total expenses incurred by the provider in developing a COVID Kavach based on the test development procedure as informed by Sapkal et al9 in 2020. The UC was defined as the total expenses incurred in providing COVID Kavach test per sample per patient in a given period. The TDC was computed based on the data collected in March–May 2020, while the UC was computed for July 2020 only. The methodology used for data collection and apportioning (Supplementary Table I) was adopted from Minhas et al11. The direct observational method was used to fulfil the gaps in documentation. For estimating UC, the total number of COVID Kavach tests performed in July 2020 was obtained from the departmental records. The COVID Kavach kits (Zydus Cadila Healthcare Ltd., Ahmedabad, India) were used for routine testing at DVG.

Statistical analysis: All the data were analysed using Microsoft Excel version 2016 (Microsoft Corporation, Redmond, WA, USA). The cost of human resources (HR) and capital expenditures such as laboratory equipment (Supplementary Table II) and non-laboratory instruments and infrastructure were calculated by following the standard methodology recently reported by Minhas et al11. To estimate recurrent costs, unit prices of all the consumables were multiplied by the quantity consumed.

The TDC of COVID Kavach was a sum of all the costs covering all the capital and recurrent costs. As described earlier by Minhas et al11 in computing TDC, the service contribution of AMU was allocated considering the total number of scientific departments in the ICMR-NIV, Pune. Average cost method11 was applied to get the COVID Kavach UC. The exchange rates12 used to convert the Indian rupees (₹) to the US dollars (US$) was of March 2020, i.e. $ 1 = ₹ 75.37, as the majority of costs were available for March 2020.

Sensitivity analysis was performed to determine the sensitivity of UC towards different cost heads. For that purpose, the original base values were altered by 25 per cent plus and minus for different cost heads. The discount rate was also varied within the 3-10 per cent range to observe the variation in COVID Kavach UC11.

Results

The estimated TDC and UC of the COVID Kavach test were ₹ 28,84,032 (US$ 38,265) and ₹ 300 (US$4), respectively. In addition, the total monthly cost of the COVID Kavach test was estimated to be ₹ 1,213,250 (US$ 16,097) for July 2020.

Total development cost: A total of 5289 square feet built up area distributed in 14 different rooms from DVG, BSL-4 and AMU were utilized for COVID Kavach development. The majority of the funds for HR were allocated towards the salary of regular employees (89.3%) and the rest (10%) for the wages of contractual employees. No monitory incentives were received for any staff if the work done by them was more than 8 h. Technical staff (62.3%) are the major cost contributors in the development of the COVID Kavach test, followed by scientific staff (34.4%) and AMU staff (3.3%) (Table I).

The cost incurred by laboratory consumables and non-laboratory consumables accounted 73 and seven per cent of TDC, respectively (Table II). The costs incurred on chemicals and reagents (51%) were more than the plasticware and glassware consumed (49%) for COVID Kavach kit development. Cost of electricity (88%) and bio-waste disposal (10%) were major contributors to utility charges. The majority of laboratory equipment cost (41%) proportion was incurred by the CO₂ incubator (Thermo Scientific^©, OH, USA). Overall, during the development of COVID Kavach, the majority of funds was used for consumables (80%), followed by HR (8%), equipment (5%) and others (7%), which included both utility and infrastructure (Fig. 1A).

Close

Fig. 1

Utilization of funds in percentage for the (A) total developmental cost and (B) unit cost of COVID Kavach test.

Export to PPT

Unit cost: Like the TDC, the laboratory consumables contributed majorly (81%) to the cost distribution chart of UC, followed by HR (12%), equipment (4%) and others (3%; utility and infrastructure; Fig. 1B). A total of 33 persons were deployed to perform COVID Kavach-related activities (Table III); out of which, 78.7 per cent of the staff were on regular employment and the rest (21.3%) were on contract/project mode. The majority of the technical staff devoted half of their duty hours to COVID Kavach tests during the reference period. The total apportioned HR cost per month towards performing COVID Kavach was ₹ 146,133 (US$ 1939) (Table III). In this study, the total monthly cost of COVID Kavach was ₹ 1,213,250 for 4048 samples tested in July 2020 ((184 samples tested per day for 22 days in July 2020) (Table IV).

Approximately 81 and 0.5 per cent of the total monthly expenses were spent on laboratory and non-laboratory consumables, respectively (Table IV). Glassware (76%) contributed more than the plasticware (24%) in the laboratory consumables cost, while sample vial labels (Brady Company India Pvt. Ltd., Bengaluru, India) and ink cartridges of sample vial labelling machine (Brady Company India Pvt. Ltd., Bengaluru, India) were major contributors in non-laboratory consumables cost. Most of the utility expenses were incurred for electricity (95%), followed by bio-waste disposal (4%) in laboratories (Table IV). AMU utilized 99.3 per cent of the utility expenses for electricity only (Table IV).

In laboratory equipment, the highest cost (45%) was incurred by an ELISA reader (Thermo Scientific, Waltham, MA, USA), followed by a centrifuge (Hettich, Zentrifugen, Tuttlingen, Germany) (24.3%) and an ELISA washer (Lisawash, Tulip diagnostics Pvt Ltd, Goa, India) (22.3%). Majority of the non-laboratory equipment costs were incurred by furniture and allied items (70%), followed by electronic items (26%) such as computers (Dell), printers (HP) and electrical items (3.7%). The COVID Kavach testing laboratory covered an area of 320 square feet, including three different rooms, and AMU section covered 2070 square feet with five rooms. Each room area was apportioned based on the amount of time devoted to COVID Kavach testing per day. The total proportional cost for the building space was ₹ 15,145 (US$ 201), including ₹ 14,400 for COVID Kavach laboratory and ₹745 for AMU. The UC comprised five per cent capital cost and 95 per cent recurrent cost, while bifurcation in terms of fixed and variable costs revealed 27 and 83 per cent cost contribution, respectively.

Sensitivity analysis: The variation (25%) of laboratory consumable prices resulted in a change in the UC between ₹ 239 and ₹ 361, while the variation (25%) in HR salary deviated the UC in the range between ₹ 291 and ₹ 309 (Fig. 2). Likewise, 25 per cent variation in equipment and rental price and the number of samples tested resulted in a change in the range of the UC between ₹ 298 and ₹ 302, ₹ 299 and ₹ 301, ₹ 317 and ₹ 289, respectively (Fig. 2). The UC of COVID Kavach was most sensitive to laboratory consumable prices, with changes (25%) affecting the test’s cost by 20 per cent. Likewise, the variation (25%) in the number of samples tested, rental price and equipment price resulted in 5.6 per cent, 0.3 per cent and 0.6 per cent change in the UC, respectively. Increment in the use of discount factor from three to 10 per cent resulted in the change of the UC from ₹ 300 to ₹ 302.

Close

Fig. 2

Tornado diagram for sensitivity analysis of different input parameters for COVID Kavach test.

Export to PPT

Discussion

The study highlights the TDC and UC of the COVID Kavach test determined using a reliable, accurate and flexible bottom-up micro-costing approach13. The laboratory consumables accounted for the majority (80–81%) of the overall cost incurred to develop (Fig. 1A) and routine laboratory testing of COVID Kavach (Fig. 1B). This finding was supported by a previous study14, which reported laboratory consumables accounting for 70 per cent of the total cost. Most of the money from laboratory consumables (76%) was spent on COVID Kavach kits (Zydus Cadila) used in routine testing. The COVID Kavach test kits developed by the ICMR-NIV, Pune, were bulk manufactured by Zydus Cadila, Ahmedabad in the State of Gujarat, India, as part of a technology transfer agreement15,16. Emergency procurement of test consumables and reagents led to higher prices due to supply shortfalls, increased demand and restrictions on reuse of laboratory consumables and personal protective equipment in the pandemic environment. In line with this study, earlier, it was observed that the protective measures used were a major influential factor in the cost of providing health services during the 2009 H1N1 pandemic17.

Our study revealed that the BSL-4 facility housed most of the COVID Kavach development work, primarily involving infrastructure, equipment and non-laboratory consumables, while the DVG centre provided most of the HR (Fig. 3). HR costs for COVID Kavach testing in laboratories accounted for eight per cent of the overall costs, contributed by laboratory employee pay (97%) and administrative staff salaries (3.3%). The staff deployed for this testing was on regular (88%) and contractual (12%) employment. HR contributions for the UC were 12 per cent of the total cost, surpassing the HR contribution for the TDC (12%). In contrast to this study, a study conducted in a hospital setting showed that HR salary was a larger cost component of the hospital’s overall cost18-20. Furthermore, a study in Tamil Nadu, South India, found that HR contributed a significant portion to the tuberculosis test UCs21. This disparity could be due to the costing methods adopted, study design, perspective and higher procurement prices during the pandemic. Earlier studies18-20 considered many services for costing; however, in this study, we accounted for only one service (the COVID Kavach test). This study accounted for maximum duty hours (8 h/ day) per staff. Staff time spent outside official duty hours was not included; however, the increased productivity might impact the UC of COVID Kavach tests as there was no extra cost incurred for overtime. The HR cost was mostly contributed by the permanent staff as opposed to the contractual staff (Tables I and III). Different wage structure for permanent and contractual employees had a significant impact on HR cost as similarly noticed in the commercial as well as public hospitals18.

Close

Fig. 3

Cost contribution (in percentage) of major and supportive cost centres in developing COVID Kavach test.

Export to PPT

The pandemic situation imposed limited paperwork and electronic record keeping, except for essential tasks such as filling patient forms and equipment log books. The administration department’s stationaries and consumables were excluded from calculation due to insufficient data.

The overall utility cost contributed <20 per cent of the total cost in both TDC and UC. The power consumption was estimated by counting all electrically operated devices and their daily usage. Another method for estimating electricity cost in proportion to building space/floor area was also useful13,20,22-24; however, the method used in this study was more precise.

The higher cost for infrastructure in the TDC (Table I) compared to the UC was due to the usage of both DVG and BSL-4 infrastructure for the development of tests compared to only DVG in routine testing. The major technical steps for COVID Kavach development were performed in BSL-4; thus, it contributed higher (81%) than DVG (16%) for infrastructure cost. The infrastructure cost was <4 per cent of the overall cost, which indicated that available space was used effectively despite the area’s high rental value.

This study had certain limitations such as the cost for laboratory (DVG and BSL-4) construction/set-up was not considered. Although, the COVID Kavach assay was externally validated at two different laboratories outside the ICMR-NIV, Pune, the cost of its validation and costs pertaining to intellectual property rights were not included during cost calculation. However, information obtained from this study provides insights into the cost components of important diagnostic services at government facilities in India. The study also provides the estimates of TDC and UC in a government-funded institute, with potential intangible benefits such as government support and quick access to inputs.

In conclusion, this study reports the TDC and UC of the COVID Kavach test developed at the National Reference Laboratory in Pune, India during the early phases of the COVID-19 pandemic. Future studies on costing are needed at larger scales to provide robust estimates and strengthen economic evaluations. The Government of India would be able to draw upon this study by reflecting upon the financial return on COVID-19 laboratory diagnosis investment, budget allocation and integration and decentralization of laboratory services to support universal health coverage.