After weeks of shortages across the country, Americans are slowly finding it easier to perform rapid antigen tests at home. That’s in large part because the Biden Administration’s massive buyout is giving test companies the confidence to manufacture and distribute a product, like the course of the pandemic itself, has an uncertain future.
Executives at several major test companies say that, while their production lines are thriving, they are prioritizing orders from the federal government to fulfill lucrative contracts. there. Because of that strategy, some other buyers – including retailers and state governments – are still finding it difficult to get enough tests to meet current demand. But supply constraints are expected to ease as manufacturers take advantage of their big payday to boost production.
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“Some manufacturers are really apprehensive about expanding their production,” said Lindsey Dawson, a KFF (Kaiser Family Foundation) researcher who has been tracking US rapid test supplies. them because they didn’t know there would be a need for these tests. “These manufacturers are being assured of a buyer — the federal government.”
Indeed, companies must invest in employees and facilities to meet the high demand. But if demand is temporary, that investment could backfire. Consider what happened in the spring of 2021: At the time, health authorities were not emphasizing home testing as a public health strategy, focusing instead on vaccinations. , has proven to be extremely effective in keeping people from getting sick. Demand for the tests plummeted, and Abbott Laboratories, which make the popular BinaxNOW Self Test, couldn’t even unload its inventory — and so had to be simple. throw out test components expiration date is near.
The demand is so high right now that manufacturers can’t keep up. Federal contracts are driving them to meet this moment. iHealth, which received a $1.3 billion federal contract to deliver 250 million tests, scaled up production to 10 million tests per day at the end of January, up from 1 million. in November. However, it was not able to fulfill all the order requests it received from retailers, states, nonprofits, and employers.
The company is aiming to double production by the end of February, but in the immediate future, maybe federal distribution programs, which serve all Americans, could ease some of the pressure at the state level. and local. “We have to limit our supply in different states a little bit,” said CEO Jack Feng. However, he added, “If the federal government is going to make the tests free for everyone, that will also help those states, [which] there will be no need to buy so many tests”.
Now in its third pandemic year, the United States is relying on regular testing to minimize the spread of the virus. As the highly contagious variant of Omicron swept through the country, many health authorities revised COVID-19 guidance, limiting contact tracing efforts — which had become unmanageable and ineffective — and reduce the recommended isolation period. “check at home” and “check to stay” programs have become the default strategy to avoid business and school closures, address labor shortages, and allow life to return to normal safely.
Read more: Everything you need to know about COVID-19 tests, from PCR to antigens to antibodies
Rapid at-home antigen tests, which deliver results in minutes, can help limit the spread of the virus if individuals pick their mouths before gathering with others — and then at home if they have positive results. Of course, that’s only possible if everyone have a test on hand. As cases surged in the final weeks of 2021, Americans shopped wildly so they could check in before travel, focus on vacation, and then get back to work. To bolster the national supply, in late December, the Biden Administration announced that it would allocate $4 billion for a program in which it would purchase 500 million in-home tests, then Free distribution through the online ordering system, limited to four per household. In January, the administration pledged to double the number of inspections to 1 billion. So far, it has distributed tests to 60 million households, or about half of all households in the US.
Manufacturers are only allowed to participate in the federal program if they already have unallocated tests ready to ship within two weeks, so as not to divert their existing supply of testing. promised to states or retailers. But according to interviews with company executives and a review of recent earnings calls, companies receiving federal contracts have since prioritized federal obligations over order requirements. other new. For example, Siemens Healthineers received an emergency use license for rapid testing from the US Food and Drug Administration (FDA) in late December and quickly became a government supplier, achieving was contracted to supply 50 million tests by the end of February. Production for other stores is still expanding — about 12 million betas will be available this month through retailers including Amazon, a company spokesperson told TIME. During an earnings call last week, Siemens CEO Bernd Montag said, “We don’t have the channels nor the ambition to go too much into a distributed retail space. So number one, of course, are major government programs. ”
“[Manufacturers] David Dreyfus, an assistant professor of supply chain management at Rutgers University Business School who specializes in healthcare operations. “When they win these contracts, they’re going to have to scramble and say, boy, we’ve got a big deal here. What we will do? And who will be pushed away until later? “
Many households will use their free federal test quickly and will then have to rely on other stores like community health centers and retailers to get more, so It is important for those places to have reliable inventory. States are eager to distribute free tests to make it easier for residents to comply with “test to stay” programs, but their supplies are limited. For example, Washington state launched a website on January 21 where residents can order five free tests. All 1.4 million claim within eight hours. Orders came back 10 days later — and supplies were wiped out the next day.
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Ohio ordered 1.2 million tests in early January but didn’t receive the first shipment of 400,000 tests until mid-month. The state must delivery pause to public libraries and local health departments to prioritize schools and universities. Deliveries started to arrive faster towards the end of the month — the state could deliver about 875,000 tests in January — but not enough to get around. “We anticipate the ability to provide tests to these local partners will be intermittent,” said Ken Gordon, a spokesman for the health department. “We have started to receive additional tests, although not in the volume we originally planned and not at a consistent pace.”
Some retailers and government officials have blame the federal government to gobble up supplies when their inventory runs low. Maryland Governor Larry Hogan clash with the Biden Administration when, during the week that the federal program kicked in, state suppliers cut orders to support the national distribution effort. A spokesperson for the Maryland Department of Health declined to tell TIME which manufacturer pulled the plug, but said that White House officials had addressed and fixed the problem.
“Manufacturers, private industry, make this judgment about what the United States needs for future public health measures,” said KFF’s Dawson. “They are not necessarily public health experts and they have a fiduciary duty to their shareholders.”
In the future, however, companies that invest in manufacturing will be ready to serve a wide variety of customers — whether they’re US states, the federal government, nonprofits , private business owners or other countries may need large quantities. That’s good for public health – and for business, experts say.
“From a manufacturing standpoint, it’s never a good idea if you’re giving 100 percent of your capacity to one product or one customer,” said Nada Sanders, a professor of supply chain management at Northeastern University. . “It is very risky. One of the opponents of supply chain management is diversification”.
Read more: Omicron could be the beginning of the end of the COVID-19 Pandemic
Some executives doubt that demand will last — even as they scale up operations. “I very much expect that…specifically in antigen tests, maybe as we get into the summer, they will drop sharply,” Roche Diagnostics CEO Bill Anderson said on a call. earnings last week, but cautioned that “it is difficult to predict how things will turn out. ” Roche, which manufactures both laboratory and home antigen tests to detect the COVID-19 virus, received an FDA license for the home kits on December 24 and won contract with the federal government for $380 million in mid-January. (The company declined to share the number of tests in the contract.) The first test submissions were provided to the federal government. now in the hands of Americans who ordered through the federal website.The company is planning to work with retailers, pharmacies and states starting in March. Matt Sause, president and chief executive officer Operations of Roche Diagnostics North America, noted in an email to TIME: “Strengthening takes time after authorization. manufacture.” The company plans to deliver tens of millions of tests to Americans each month.
Public health policies and individual risk tolerance — not to mention the virus itself — are ever-changing. Whether demand remains high for the long term or falls and passes with virus cases, manufacturers are better prepared to handle the future market.
The US has been catching up on testing since the start of the pandemic. In the early days, before home tests were available, the country struggled with shortages of reagents and swabs that severely limited the number of lab-based tests it could offer. perform. Then in the summer of 2020, people wait weeks for results due to backlog in the laboratory. The country was flat again during last year’s Delta surge because few companies tested has received FDA approval.
The federal government must take the Omicron test to promote the free market. While some states and retailers are still dealing with supply hiccups, supply chains are bound to get smoother — and ultimately ready for whatever comes next. .
