An article in yesterday's business section misstated the relationship between two local companies. The Marvil Corp., of McLean, and Securigard Inc., of McLean, are not legally related.

The calls and letters already have started pouring in to Medical Diagnostics Inc. of Columbia -- and its new drug-screening test is not even on the market yet.

"There's tremendous demand out there," said Melton A. Saponis, president of the three-year-old company. Medical Diagnostics received 600 inquiries in three weeks after an industry journal published an item about the test, which screens urine samples for five drugs -- heroin, morphine, cocaine, amphetamines and phencyclidine (PCP).

Medical Diagnostics, which hopes to start selling the test by the end of July, is part of a new industry that is growing as fast as the national concern about drug abuse. Big, established corporations and little start-up firms are moving quickly to set up laboratories and manufacture test kits for companies, universities and government agencies.

Drug screening -- the analyzing of urine or blood samples of workers or job applicants for illegal substances -- is currently a $60 million-a-year business in this country, with the potential of growing to more than $200 million, according to companies in the industry. Sales of drug-testing products ring up another $60 million, said one of the nation's largest suppliers.

About 20 percent of federal government agencies and 25 percent of the Fortune 500 companies now conduct some type of drug-screening program, and the number is swelling, according to two surveys.

Industry experts say universities are not yet a large market for drug screening, but their interest has been increasing and could be spurred by the cocaine-related death of University of Maryland basketball star Len Bias. "With Mr. Bias' death, there will probably be more emphasis in that area," said Robert R. Lovelace, director of marketing and sales for Marvil Corp., a McLean distributor of drug-screening supplies. "Many universities were already thinking about it drug screening ; this will certainly prompt them to do it."

The new industry may have received its biggest boost from the President's Commission on Organized Crime. The commission has urged drug testing of all federal employes and government contractors and suggested that all state and local agencies and private employers consider it.

The industry's growth, however, has been restrained by the uncertainty created by lawsuits and criticism, company officials say. Opponents have challenged the methods of administering drug tests and the ways results are used, and have questioned the accuracy and usefulness of the tests available.

Some companies also worry that the lack of industry regulation or standards may allow unqualified labs to do work that could harm individuals and kill the business.

"We're concerned about a high growth market and a high level of opportunity that will draw all kinds of people into the business," said Michael A. Terretti, director of clinical marketing and sales for CompuChem Laboratories Inc. of Research Triangle Park, N.C., which conducts contract drug urinalysis for the Air Force and Army. "Right now, a lot of labs are cropping up, claiming they can do drug testing when, in fact, they cannot."

Terretti planned to visit Washington this week to approach government agencies and legislators about the need for industry standards.

For now, "business is terrific," said Don Shattuck, president of the American Institute for Drug Detection Inc., a three-year-old firm founded specifically to provide companies and universities with drug-testing services. American Institute, of Rosemont, Ill., tested 100,000 urine samples for illegal drugs last year. Clients include Exxon Corp., General Mills Inc., the Chicago Police Department and about a dozen university sports teams.

Business Grows Rapidly

Shattuck would not disclose the privately held company's financial results, but said last year's sales represented a 450 percent increase over the year before, and that this year's results should show a 300 percent increase over last year's.

Medical Diagnostics, a subsidiary of Keystone Medical Corp. of Philadelphia, expects to sell 1 million of its tests in the first year, along with an ancillary test for identifying adulterated urine, which together would generate sales of more than $4 million.

Business is so good that Shattuck just formed a new company, American Drug Screens Inc., in Dallas, to make and sell a drug-test kit for parents to use on their kids. Called "Aware" and priced at $24.95, the kit includes a specimen bottle, a disclosure form and a mailing label. Parents can collect a urine sample and mail it to the American Institute, where it will be tested for marijuana, cocaine, PCP, barbiturates and Valium.

"I can't even count the calls the institute got from parents saying, 'I want to know if my kids are using drugs -- I'm scared to death,' " Shattuck said, explaining why he started the new company. He hopes to sell 100,000 Aware kits the first year.

One big market for drug screening is security services, which makes Washington a prime location for the drug-testing business, said Lovelace of Marvil, a subsidiary of Securiguard Inc. of McLean. Guards provided by private contractors are often tested for drugs, and "there is a lot of need for guards in this city," he said.

Securiguard provides guards for Arlington Cemetery, the State Department, the Commerce Department, the Internal Revenue Service and other government agencies. Marvil recently has become a local distributor for the American Institute for Drug Detection; it sells supplies such as plastic specimen bottles, sealing labels, forms and mailers, which clients use to send urine samples to the institute for screening. Marvil's biggest client could be its parent company, which uses the service to screen its own guards.

Companies, agencies, universities and other organizations looking for drug-screening services have a variety of products and companies to choose from.

Firms Use Spectrometry

The top-of-the-line technology for detecting drugs is called gas chromatography/mass spectrometry, or GC/MS. The process uses a $150,000 instrument to separate substances in a specimen and break the molecules into fragments that produce a pattern so precise it serves as a "fingerprint" of a drug.

The instrument is sensitive enough that some laboratories using it claim 99.9 percent accuracy. But the process is so expensive -- about $40 per drug identified -- that most companies use the technique only to confirm other findings.

One of the most commonly used products for initial screening is called EMIT, for Enzyme Multiplied Immunoassay Technique, which uses enzymes and antibodies to detect drugs, and claims 95 percent accuracy. Laboratories using EMIT set prices according to number of drugs checked. For example, American Institute charges $17 for a test that screens for three classes of drugs, and $22 for one that identifies nine classes.

Because of the difference in price and specificity, a company might first use EMIT to test all its urine samples and then use GC/MS to confirm samples that appear to contain drugs. For example, EMIT might show the presence of "opiates" in a sample, but GC/MS would show which opiate, whether codeine or morphine or another.

Medical Diagnostics says it hopes its new product will serve as a cheaper, more efficient first-stage screen. Its test costs $4 each and can be performed on-site, removing the need to mail the specimen to a lab for processing. It does not show individual classes of drugs, but a visually determined "positive" result indicates that one of five drugs may be present. A company could then use GC/MS to determine which drugs were involved.

The success of these products and companies could be enormous if drug testing becomes widely accepted, or could be limited if legal challenges and public doubts prevail.

A federal judge last Wednesday blocked an Army plan to begin random drug testing of civilian employes at Aberdeen Proving Ground in Maryland, after the program was challenged by a union representing security guards there. In March, Potomac Electric Power Co. was temporarily barred from testing its employes for drugs, after a union filed suit in federal court. The company has been allowed to proceed with the testing program while the dispute is in arbitration.

Rep. Patricia Schroeder (D-Colo.) recently released a congressional study on drug testing of federal employes and charged that the tests are "costly and useless." She said the tests are "unreliable because the testing procedures of many labs are sloppy, because the tests do not show intoxification, because the tests do not show the level of usage, because the law says employes cannot be fired for off-duty conduct which does not affect on-the-job-performance, and because employes have a right to be protected from unreasonable intrusions into their bodily functions."

The Greater Washington Board of Trade, a regional chamber of commerce, has responded to inquiries about drug testing from local businesses by organizing a seminar to be held in November to discuss the legal issues raised by corporate drug testing. The issues vary depending on whether an organization is governmental or private, and whether a company is unionized or not, said Maurice Baskin, a lawyer who is preparing the seminar.

Marvil's Lovelace said the companies he has approached are interested, but cautious, about drug testing. "It's not something a company is going to jump into because the water is very muddy."