Colorado paid more than $89.2 million to a coronavirus testing provider run by an ambitious 25-year-old entrepreneurial college dropout in California. But state officials abruptly severed ties with the company after federal regulators warned that those officials allowed improper use of the test in nursing homes with some of the highest death rates in the nation.
Colorado had America's highest nursing home coronavirus death rate at end of 2020
Curative Labs, based in San Dimas, Calif., on Sept. 4 snagged a lucrative contract to become Colorado’s frontline defense for long-term care facilities in the state, including nursing homes. The company would go on to provide Colorado with more than 715,000 coronavirus tests, averaging 70,000 tests per week during its contract with the state.
It was a crucial job. At the time, Colorado needed a solid testing partner.
The state struggled with scarce testing early in the pandemic, with the state lab unable to keep up with the need. Long wait times for test results developed even after private firms ramped up virus testing. In the fall and winter, deaths in nursing homes began to surge, making surveillance testing an even greater priority. By late December, Colorado had the highest weekly coronavirus death rate among nursing home residents in the country, about twice the national average.
Despite the tremendous needs, the state’s short and troubled partnership with Curative Labs ended badly.
The relationship likely will end up becoming the state health department’s worst miscue in its response to the coronavirus, said Gregory Gahm, the medical director for Vivage, a company that runs nearly 30 nursing homes in Colorado. Dr. Gahm, who regularly advises a state coronavirus task force, gives state officials high marks for their pandemic response, but said those officials allowed themselves to be misled by slick and misleading promotional materials from Curative Labs.
“Unfortunately, Curative sold us a bill of goods,” he said in one blistering email he sent in January to the state’s top health officials, attaching a memo summarizing “what really cannot be anything but false results by Curative.”
In the end, the state dropped Curative Labs as a partner after receiving complaints from nursing home administrators like Dr. Gahm and after the U.S. Food and Drug Administration publicly warned the tests from Curative Labs might inform patients they were free of the virus, even when they weren’t.
The FDA warning raised concerns that Curative Labs tests created so-called false negative test results, which could provide a false sense of security that could cause those infected with the virus to spread it unwittingly.
Meanwhile, Colorado nursing home administrators said they detected instances in which Curative tests identified their residents and staffers as carrying the virus when they weren't, a false positive result that sometimes required them to relocate residents and quarantine staffers.
The state’s health officials, in interviews this week, said a conversation they had with FDA officials in late January clinched their decision to stop relying on Curative Labs. During that conversation, FDA officials cautioned officials with the Colorado Department of Public Health and Environment that they had allowed Curative’s test to be used beyond its limited use authorization, potentially endangering vulnerable nursing home residents and staffers.
“Our decision was really based on concerns from the FDA,” said Sarah Tuneberg, who headed the Colorado health department’s containment and testing strategy until late in January, when she stepped down from that role to return to the private sector.
She and other health officials say that they’ve since compared nursing homes that used Curative testing against those that used other tests and haven’t detected any significant statistical difference in death rates or coronavirus cases.
“We didn’t see impact or harm from Curative during that period of time,” said Rachel Herlihy, the state’s top epidemiologist, during one press conference in March.
The need for robust testing has begun to subside as the death rate among Colorado residents in nursing homes has begun to decline dramatically with the rollout of vaccines, dropping Colorado’s nursing home death rate back below the national average. State officials say they’ve also secured adequate testing supplies from other providers, allowing them to move on from Curative.
Still, what transpired in Colorado shows just how vulnerable the nation was to a once-in-a-lifetime pandemic that overwhelmed public labs, leaving state health officials desperate to supply crucial tests to determine who should quarantine to stop virus spread. Federal regulators also gave wide latitude to private providers, allowing firms to get into the virus testing business through a relaxed regulatory framework. The normal rigorous vetting for new virus testing procedures was set aside — all in the name of a medical emergency. And companies like Curative were quick to step up, eager to grow rapidly and generate huge profits along the way.
“There has been no national strategy on testing,” said Scott Bookman, incident commander for the Colorado health department’s pandemic response, during a March news conference. “The entire country has really suffered from a lack of supplies and a lack of laboratories and an overall lack of strategy from the federal government.”
He said state officials believe anyone who needs a coronavirus test should be able to get one. That goal faced a stark reality early on when the pandemic hit Colorado. At that time, the state lab could only do 160 tests a day. At the height of the pandemic, more than 65,000 such tests were conducted in one day in Colorado, Bookman said.
Last spring, even with the state garnering a 10,000-a-day supply of coronavirus test kits, those tests kits were mostly useless due to a lack of nasal swabs. At one point, the state’s testing and containment team asked the federal government to supply at least a couple hundred thousand nasal swabs. Instead, the state, received at that juncture, at most, 2,000 of the swabs, state officials said.
Even after supply problems abated, problems continued into the summer, with large private labs reporting long delays, sometimes as much as 12 days, before they could report back to Colorado coronavirus test results. Those delays posed challenges because it could take as long as 14 days for coronavirus symptoms to appear, rendering a test virtually useless since it could take nearly that long before tests results arrived.
“We brought on an entire team to source new forms of testing, to source new partners and that has allowed us to scale up testing,” Bookman said during the March press conference.
Wunderkind sees opportunity
One of the companies the state’s health department tapped to scale up testing was Curative Labs, whose chief executive officer was Fred Turner, a wunderkind who dropped out of the University of Oxford to pursue his entrepreneurial dreams.
Turner as a teenager, had built a machine to figure out why he didn’t have red hair like his mother and brother, which garnered him plaudits and awards in England. He dropped out of school and moved to the San Francisco area to pursue a company, TL Biolabs, that offered genetic testing to improve cow herds, according to the Los Angeles Times. He was awarded a $100,000 grant by the Thiel Foundation for that vision, but the company didn’t pan out.
He saw opportunity when the coronavirus hit the United States, creating his own prototype for detecting the coronavirus, surmising that he could detect the virus through oral tests instead of the ones that probed the nasal cavity. His company, newly named Curative Labs, was one of about 200 firms granted “emergency-use authorization” for coronavirus testing by the FDA. Under that expedited review, firms can start selling tests if they register with the FDA and follow up with research showing they “may be effective.”
Turner, the CEO, did not return telephone messages seeking comment. A Curative Labs spokesperson in a prepared statement has defended the firm’s coronavirus testing.
“While Curative is disappointed with the Colorado Department of Public Health and Environment’s decision to no longer use Curative for testing across Colorado and at long term care facilities, we continue to be confident in our data, our test and in the service we continue to provide to patients across the country every day,” said Gianni Pasquale, the company’s spokesperson, in a prepared statement. “Curative’s test performance and labeling have not changed, nor has the company observed any changes in test performance.”
Curative Labs grew quickly from a dozen employees to a juggernaut in the coronavirus testing arena, supplying drive-up testing sites in Los Angeles and several states, including Texas and Florida, and even garnering contracts to test members of Congress and the Department of Defense. In one promotional material the company used to attract business, Curative said it had grown its lab from 10 to 150 employees to keep up with the pace of work for the new coronavirus testing.
The company also caught the attention of Colorado officials. Emails obtained through a Colorado Open Records Act request show that among those enamored by the company were Gary Lauder, the grandson of the founder of the Estée Lauder cosmetics company. Lauder, who shares time between Silicon Valley and his family’s home in Aspen, runs Lauder Partners, a Silicon Valley-based venture capital firm.
Lauder, who did not return telephone messages seeking comment, facilitated an introduction between Turner, the young Curative CEO, and Kacey Wulff, who then was Gov. Jared Polis’ senior adviser for COVID-19 response, resilience and recovery. In a joint email to Wulff’s private email and Turner’s Curative company email in July, Lauder wrote: “Dear Fred, I hope all’s well for you and Curative. I just spent the weekend with our friend, Kacey Wulff and her husband.” He added that he had told Wulff about Curative since Colorado “is trying to augment their testing capacity.”
Turner responded with an email to Wulff and Lauder, thanking Lauder for the introduction. He also looped in his chief business officer and the company’s chairman, having them forward promotional material from the company to Wulff that Wulff then forwarded to members of the state of Colorado’s testing and containment team, including the team’s leader, Tuneberg.
Tuneberg said she doesn’t recall receiving any emails on Curative from Wulff, who has since left her state job to join President Biden’s administration. She said she received hundreds of emails from Wulff on a given day. Tuneberg said she recalled that a public health official or county health staffer in Pitkin County got her interested in Curative’s testing.
“They had gone to Los Angeles and had a test at a Curative kiosk, and the experience was really good, and so they had connected with me and said, ‘This is a great resource and can we get this in Colorado?'” she recalled.
She said she followed up and “vetted deeply” Curative and was impressed with Curative’s “incredible innovation on logistics.” The firm could create freestanding kiosks for testing samples and had partnered with the United Parcel Service, which allowed delivery and collection of test kits for the hundreds of long term care facilities spread across Colorado, Tuneberg said.
In addition, under the FDA’s emergency-use authorization, Curative’s test samples didn’t need to be done by a health practitioner and could be self-administered if observed and directed by a trained healthcare worker.
“Their model, what was interesting is that they were a self-sufficient testing vendor,” Tuneberg said. “One of the challenges we had was that Colorado was a really robust labor market. Hiring people to test all over the place was not a great solution. We wanted to have turnkey vendors.”
She said just because the company was run by a young entrepreneur didn’t concern her.
“To say you shouldn’t be picking an entrepreneurial company with a young founder is ageist,” Tuneberg said. “They were well vetted. They had an incredible support team and incredible resources that we vetted deeply. I talked to many states that had used them and other municipalities. I honestly don’t care what the CEO does or how old the CEO is. I want to know can they get me supplies? Can they deliver in the turnaround time? Can they meet our standards? We looked at all of that, and it was the right fit.”
'Unreasonable risk of harm'
The FDA’s emergency-use authorization for Curative’s test came with a huge caveat: The test was only supposed to be done on individuals who have had symptoms within 14 days. Tuneberg and other state health officials now acknowledge the state didn’t use the test that way, instead opting for mass testing in nursing homes in the state, as was widely done elsewhere, such as at drive-up Curative testing sites in Los Angeles.
Promotional material Curative’s officers provided Colorado officials touted Curative’s ability to test for the virus in those people who weren’t displaying symptoms even though the FDA’s emergency-use authorization barred the company from such promotion.
“For any successful testing and containment program, the ability to identify asymptomatic and presymptomatic individuals so that they can be rapidly and safely isolated, is crucial,” stated one Curative clinical paper sent by email to Wulff, then Polis' pandemic adviser. That paper further stated that “self-collection allows testing to be done at a scale that enables screening of asymptomatic or presymptomatic individuals.”
According to emails obtained by the Florida Bulldog, a Florida news outlet, Curative tried last year to convince the FDA to expand the test’s authorization to include use on people without symptoms. Those emails show an FDA official didn’t like what he saw.
The FDA didn’t respond to a request from The Gazette for those emails, but the Florida Bulldog reported that the FDA official reanalyzed the data and found Curative’s positive results only agreed with the positive results of a more accurate comparison test 72.3 percent of the time for oral swab samples and 79.3 percent of the time for nasal swab samples.
“Based on this information, we are concerned that your device may put patients at unreasonable risk of harm due to inaccurate results,” said the FDA scientific reviewer Joseph Briggs in a Dec. 22 email. “Please take action to correct clinical performance of your device or provide clarifying information adequate to address the significant clinical performance issue.”
The FDA in a Jan. 4 public warning re-emphasized that the Curative test needed to be conducted only in accordance with the original use authorization, meaning testing should only be conducted on those showing symptoms of infection. That warning stressed that Curative tests had a risk of false negative test results.
When Colorado officials reached out to the FDA for further clarification after the warning, the FDA further emphasized that Curative’s tests shouldn’t be conducted on asymptomatic individuals, as the state had been doing in nursing homes.
“They were unequivocal,” Tuneberg said. “And then it didn’t meet our use case anymore.”
The danger of false positives
Nursing home administrators remain disgruntled that they weren’t listened to sooner when they complained about the Curative test and also about logjams that developed in getting testing results and what state emails describe as a lack of courtesy from Curative’s staffed help line.
On November 27, in one email Joyce Humiston, an administrator for a chain of nursing homes in southwest Colorado, warned local county officials of a “troubling trend” with the Curative testing system.
“We now have had staff who tested positive up to four weeks ago in three different facilities who have since tested negative several times with us…..coming back positive with Curative,” Humiston reported in the email she sent to dozens of local health official and a state health official. “We are seeing multiple staff test positive with Curative and then our system says negative.”
“I think something is flawed with the Curative system,” she concluded.
The state allowed nursing homes to use other testing resources, but if they did so, the nursing homes had to pay for those other tests while the state provided the Curative test for free. The state also mandated that if a nursing home used another lab, that lab had to meet the state’s testing capacity requirements.
At least one nursing home chain based in Fort Collins wanted to switch back to the lab at Colorado State University, but the state's health officials initially barred it from doing so because that lab couldn’t accommodate the state’s testing requirements.
Yvonne Myers, the health services administrator for Fort Collins-based Columbine Health Systems, which operates five nursing homes and three assisted living centers, said that in January, Curative Labs’ COVID-19 testing identified nursing home residents as carrying the virus when they really weren’t. She said Curative’s faulty tests forced one of her facilities to relocate 30 residents when they shouldn’t have been moved. She said the relocation potentially put nursing home residents who didn’t have the virus in close to proximity with those that did have the virus.
“We were putting someone we thought as sick in a wing with sick people,” Myers said. “We moved them, and now the potential is to give them COVID when they actually didn’t have it.”
She said follow-up testing at the Colorado State University lab found that 16 staffers Curative tests had determined had the virus actually weren’t carrying the virus. State officials say there’s no way to know for sure whether the Curative tests were flawed in that instance and others identified by other nursing homes because the tests weren’t conducted simultaneously.
After Colorado officials backtracked and issued an order on January 21 directing nursing homes to stop using the Curative Labs tests, those officials allowed the contract the state held with Curative to expire at the end of March and opted against renewing the contract.
By then, the state had paid the firm more than $89.2 million. The firm’s billing partner, Gothams, another California-based company that handles the logistics side of the testing operation for Curative, has submitted an invoice for an additional $799,700 for more than 7,000 COVID-19 tests processed in February and March.
“In regards to recouping money from Curative, we are negotiating the final invoice,” a state official said in an email on Friday. “That process could take some time.”
