US rapid test production is ramping up too late for omicron

Packages of BinaxNOW COVID-19 Antigen Self Test, manufactured by Abbott Laboratories, are seen in on a store shelf.
Packages of BinaxNOW COVID-19 Antigen Self Test, manufactured by Abbott Laboratories, are seen in on a store shelf.
Image: REUTERS/Andrew Kelly
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US manufacturers’ efforts to boost production of at-home covid tests may come too late to help stem the omicron wave infecting a record number of people across the US. But public health experts say the belated push to improve US testing capacity could help the country navigate future waves of the pandemic.

Far more tests are coming. Abbott, the maker of the BinaxNow test, says it will ramp up production from 50 million tests per month to 70 million by the end of January. Ellume says it will produce an extra 15 million tests per month once it opens a new factory this January. Quidel (maker of the QuickVue test), Intrivo (maker of the On/Go test), Access Bio, and InBios International have also announced plans to scale up production in the coming weeks or months. Meanwhile, the Biden administration announced plans Dec. 21 to buy 500 million at-home rapid tests and distribute them to Americans for free; White House covid response coordinator Jeff Zients said at a Dec. 29 press conference that the administration would finalize its contract with manufacturers “late next week,” which is to say, by Jan. 8. Deliveries would start later in January.

But epidemiologists say the omicron wave could peak in the US sometime in mid-January before receding if patterns in South Africa and the UK are repeated. In other words, at-home covid tests are likely to flood pharmacy shelves and Americans’ mailboxes just after the first omicron wave has passed.

Even so, the effort will not have been entirely wasted, says Clare Rock, an infectious disease specialist and associate professor of medicine at Johns Hopkins University. Scaling up capacity to manufacture at-home tests has become a key public health tool in countries like the UK, where citizens regularly take the 15-minute tests to make sure they’re not exposing friends, classmates, and coworkers to the virus. Americans will still benefit from having easy access to at-home tests after the omicron wave passes, as covid-19 eventually transitions from a virulent pandemic to an endemic disease that regularly flares up like the flu.

“I wish it was something that could have been done many, many months ago, but it’s not too late,” said Rock. “In some form or another, covid is going to be with us for a number of years, so having the availability of these rapid at-home tests just helps the public arm themselves with another tool to keep themselves safe.”

Covid test manufacturers fear the bullwhip effect

The US’s stop-and-start approach to manufacturing at-home tests is an extreme example of the bullwhip effect in supply chains, which describes how even small fluctuations in demand for a certain product can cause manufacturers to wildly increase or cut production. In the case of covid tests, massive, unpredictable swings in demand for testing kits have caught manufacturers by surprise, leaving them with too few tests at some points and too many at others.

The US Food and Drug Administration (FDA) authorized the first over-the-counter at-home covid test on Nov. 17, 2020. At-home rapid tests promised to be a powerful tool to combat the coronavirus: They delivered reasonably accurate results in 15 minutes, which would allow people to quickly test themselves before leaving home and potentially infecting others. In the months that followed, manufacturers raced to scale up their production capacity.

At first, selling at-home tests looked like a burgeoning business. Abbott, for example, began selling lab-based rapid tests early in 2020—but its sales took off in the fourth quarter of 2020, when the FDA authorized Abbott’s BinaxNow test for at-home use. The company sold $1.4 billion worth of rapid tests that quarter, and CEO Robert Ford told investors on a Jan. 27 earnings call that he expected “testing demand is still going to remain high, even as the vaccines roll out.”

But on Feb. 10, 2021, the US Centers for Disease Control and Prevention (CDC) updated its guidelines to say that vaccinated people no longer needed to get tested after being exposed to covid. Demand for tests plummeted. Abbott’s sales slumped. By July, the company had shut down one of the factories where it had produced at-home tests, laid off thousands of workers, and directed its remaining workers to destroy 8.6 million unused test cards, according to The New York Times. (Abbott said in a statement that it did destroy test components, but they were going to expire anyway.)

Thanks to the delta and omicron waves, demand for at-home tests has spiked again. In July, the CDC reversed itself and once again recommended that vaccinated people get tested after exposure to covid, even if they don’t show symptoms. As a result, Abbott’s rapid test revenue picked back up in the third quarter of 2021, and the company is once again racing to scale up its covid test manufacturing capacity.

Like Abbott, other manufactures have also been whipsawed by rapid swings in demand for at-home tests. Across the industry, boosting production will take weeks or months, as test makers race to hire more workers, order raw materials, and contract out packaging, manufacturing, and other functions.

The US government’s plan to buy 500 million at-home tests promises to smooth out some of the uncertainty in demand: No matter what the CDC says and no matter how the virus mutates, manufacturers know they can sell millions of tests to the federal government, at least for the next few months. That guarantee is bolstering manufacturers’ decision to ramp up production now, and it might give them an incentive not to lay off workers and shut down factories if demand for at-home tests ebbs after the omicron wave passes.