Biden Admin Gave $86 Million to Company Accused of Peddling Fake COVID Test Kits

CorDx sold knockoff kits manufactured in China, complaint alleges

(Anna Moneymaker/Getty Images)
December 5, 2023

The Biden administration gave $86 million to a company accused of peddling counterfeit COVID test kits manufactured in China, according to records obtained by the Washington Free Beacon.

The U.S. Department of Health and Human Services announced the funding to CorDx, a COVID test kit manufacturer, in September. The deal will finance free testing products to American households and is intended to "bolster U.S. manufacturing."

But records obtained by the Free Beacon raise questions about CorDx's testing kits and its domestic manufacturing capabilities. One of the company's competitors claimed CorDx sold knockoff kits stamped with a false brand name, in violation of Food and Drug Administration regulations, and that CorDx's was producing the tests in China.

The news comes as the Biden administration has faced scrutiny over fraud in COVID spending and as it works to comply with regulations to spend the funding domestically rather than in China.

Genabio Diagnostics, a COVID testing manufacturer, in a complaint to the FDA in February accused CorDx of selling a "counterfeit version" of Genabio's antibody tests—which had received emergency authorization from the FDA.

"To protect the public from these counterfeit tests and deter other unscrupulous actors from engaging in similar unlawful behavior, we request that FDA take swift action against CorDx to stop its violative behavior," wrote an attorney for Genabio.

Genabio said it was tipped off by a former customer that CorDx was selling its tests without authorization and at a lower price point. An investigation by Genabio's law firm, Cooley LLP, allegedly found that CorDx was selling fake versions of the tests, stamped with Genabio's brand name, according to the FDA letter.

The products sold by CorDx had different text on the boxes, lacked QR codes, and included different swabs, among other discrepancies, according to Genabio. The company included photographs of the contrasting testing kits along with its FDA complaint.

The FDA said it is "not able to discuss possible or ongoing investigations."

Genabio in a September letter to the Government Accountability Office rehashed its concerns about the counterfeit tests, protesting the HHS grant decision.

The complaint claimed CorDx has a "history of selling counterfeit Genabio devices" by "misbranding and shipping low-quality devices through interstate commerce."

The company also claimed that CorDx's U.S.-based facilities weren't large enough to produce COVID tests at the scale necessary to fulfill the HHS contract—and alleged that CorDx was manufacturing the products in China.

"CorDx's behavior suggests its production facilities in the United States are insufficient for COVID test manufacturing at scale and, as a result, CorDx must use facilities outside the U.S. for manufacturing completed test kits before shipping such kits to the United States," the complaint said.

Although CorDx has facilities in the United States, it has a history of producing products in China, including rapid tests for infectious diseases, fertility, and drug use.

As recently as January 2021, CorDx described itself as "headquartered in California with production based in China," according to an archived version of its website. The company now says it has "manufacturing footprints in the United States and around the world."

The HHS award is aimed at bolstering U.S. supply chains and requires companies to manufacture the COVID tests domestically. The agency said the funding to CorDx would help "strengthen the nation's capacity to manufacture tests," according to a press release.

"These critical investments will strengthen our nation's production levels of domestic at-home COVID-19 rapid tests and help mitigate the spread of the virus," said HHS secretary Xavier Becerra.

Lawmakers have warned about COVID relief funds being diverted to foreign actors, but the Biden administration has vowed to use federal spending bills to boost domestic production. Despite this, Chinese companies have been selected for federal funding after setting up U.S. headquarters.