manufacturers oftesting tools rake in billions as many consumers pay through the nose to find out if they are infected.
Over-the-counter rapid tests have been expensive since they first became available in the United States, with major retailers like Kroger and Walmart recentlyeven as manufacturers increase production to meet increased demand induced by the Omicron variant.
This is in part because of the expiration last month of a White House deal with some retailers to sell test kits at cost for 100 days, which prompted distributors to raise the prices of the drug. Abbott’s BInaxNow test at around $ 12 per test. The Quidel QuickVue Quick Test and others are sold for about the same price.
Medically-minded entrepreneurs also make high-tech kits that allow consumers to administer more sensitive molecular tests at home. These products, which work by detecting the genetic material of the virus, cost even more. Detect, for example, which does a quality PCR test for home use, sells a test and a processing concentrator for $ 75. Additional tests cost $ 49.
Exceptional benefits for test manufacturers
Unsurprisingly, manufacturers of COVID-19 tests are seeing their profits skyrocket along with consumer demand.
Abbott Laboratories, maker of the BinaxNow test, one of the most popular home screening devices, reported $ 1.9 billion in third-quarter sales related to COVID-19 tests, up 48% from the time of last year. The BinaxNow test alone was responsible for $ 1.6 billion in sales.
Quidel, which makes the QuickVue test, sold at major drugstore chains and other retailers in the United States, reported $ 406 million in revenue from its COVID-19 tests in the third quarter of 2021. Riding on the same wave, the maker of COVID-19 molecular tests Cue Public Health in September for a valuation of nearly $ 2.3 billion.
Laboratories that process PCR tests, the primary diagnostic tool for detecting COVID-19, also benefit. Labcorps and Quest Diagnostics both saw their profits increase as the two testing companies were inundated with samples to process.
Drugstore chains like CVS and Walgreens are also benefiting greatly. Both retailers have raised their annual profit forecasts following strong sales of over-the-counter COVID-19 tests.
Fight for kits and services
Rapid tests remain rare in many parts of the United States. They are also not accepted as proof of a negative test result by many entities, including for travel abroad.
Meanwhile, some consumers have to shell out hundreds of dollars, given the lag in turnaround times. In New York City, for example, a number of clinics – including CareCube, Clear19, MedRite and others – offer same-day PCR testing for people who need quick results, such as for international travel.
For $ 225, CareCube, with 20 testing sites across the Big Apple, guarantees test results within eight to 10 hours. Sameday Health, also based in New York City, guarantees a one-hour PCR test result for $ 250. For a fee of $ 400, My Doctor Medical Group, a private practice in San Francisco, says it will provide a PCR test result by 9 a.m. the day after the test is administered.
Carri Chan, a health care professor at Columbia Business School, likened the services to a “priority queue at the airport where Gold or Platinum members can cut the line.”
“Bad guys” or just business?
A White House initiative demanding thatfor the cost of rapid at-home COVID-19 testing will come into effect soon. Demand for COVID-19 test kits expected to increase in the near term as the highly infectious variant of Omicron spreads and carries the virus
And when demand for a given good or service exceeds supply, consumer prices rise.
“It’s hard to know exactly what the cost is to manufacturers – estimates put it at a few dollars – and we’re seeing tests selling for between $ 14 and $ 35 at crazy margins beyond that as well,” Chan said. “This is due to the mismatch between supply and demand. Demand is skyrocketing right now, it is very difficult to find tests and when they are available they are immediately fetched.”
Some critics have questioned the ethics of test makers making such large profits amid an unprecedented public health crisis. But Chan noted that pharmaceutical and other medical companies have invested heavily in developing and manufacturing tools designed to keep the public safe, with no guarantees or guarantees that they will be purchased.
“I think it’s easy to pass the manufacturers off as the bad guys, but they also had to take a lot of risks themselves. They didn’t know in advance what the demand would be – and, in fact, six months. A few years ago, it looked like there would be no demand for these products. It was not part of the US COVID strategy, “she said.” They said. therefore had to take a risk to increase production. If there was no demand, they would have to eat whatever cost themselves. “