Pharmacies are struggling to keep Covid tests in stock as omicron rages in the US
Healthcare professionals are distributing free at-home rapid Covid-19 test kits at a vaccine clinic in Philadelphia, PA, USA, Monday, December 20, 2021.
Hannah Bayer | Bloomberg | Getty Images
George Panagiotopoulos is struggling to keep Covid-19 tests at home in a warehouse at a nearby Broadway Chemists pharmacy in New York City as cases have skyrocketed to record levels across the state and the United States.
The batch of 200 tests received on the Saturday before Christmas, he said, sold out “within hours.”
Panagiotopoulos, the pharmacy owner, has compiled a list of 110 people waiting for him to restock his home tests on the Tuesday before Christmas. The batch of 150 kits arrived two days late and was sold out within 48 hours, he said. Broadway Chemists received another batch of 150 tests last Thursday, but most of them were missing a day later.
As of Friday afternoon, the pharmacy had between 20 and 30 tests remaining. Panagiotopoulos expects demand to remain strong as schools reopen after vacations and parents rush to get their children tested.
His The experience is being played out in Covid hotspots across the country as infection rates hit an all-time high in the US, largely due to the highly contagious variant of the omicron.
“Tsunami of demand”
Tender war
Abbott, which received FDA emergency clearance to conduct home trials of BinaxNOW in March, is experiencing “unprecedented demand,” said company spokesman John Koval.
“We send them out as quickly as we can,” he said. “This includes operating our manufacturing facilities in the US around the clock, hiring more workers and investing in automation,” he said.
Shaz Amin, founder of a company that sells home tests online, said the surge in demand has allowed distributors to hike prices as buyers like his company WellBefore are mostly involved in a bidding war to secure limited supply.
“No matter how much we paid for test kits a week ago, today we pay 25% more,” Amin said. “Someone stands in line behind us and says, ‘I’ll give you another 25 cents to take what WellBefore has allocated.”
Amin said the shortage means Covid test kits are being sold even before they are shipped.
Pay in advance
Ryan Neumann, vice president of logistics at Sunline Supply and Arnold’s Office Furniture, a company that turned to supply PPE and test kits to customers during the pandemic, said they usually make a 10% deposit on order for health and safety products. and then rest when he arrives.
But for Covid test kits, they “have to pay 100% of the product before they even see it, look at it, smell it, whatever,” because tests are in such high demand, he said, noting that he thinks the market is test kits will be “cramped” for at least six months.
“It just seems that production is not able to ramp up to what the American population now needs,” he said.
Several wholesale buyers have said they are trying to sell some of the lesser known brands that have been approved for sale by the FDA and work similarly to the Covid tests of well-known brands such as BinaxNOW from Abbott and QuickVue from Quidel. Neumann, for example, said that some distributors of more popular tests are overpricing, which makes lesser-known brands more attractive.
Lack of raw materials
Matt Regan, president and CEO of medical supplies distributor Code 1 Supply, said Thursday that the components for the test kits had dried in the previous seven to ten days. Regan said business partners informed him of a shortage of raw materials for the test kits. They also told him that distributors prioritize orders from federal agencies over other buyers, he said.
Three other companies that sell Covid tests at home and have spoken to CNBC, including iPromo, Sunline Supply and the nonprofit Project N95, said they were also told that the Biden administration’s new plan to bring 500 million home tests to the public is delaying their own. shipment. But the White House said its plans should not interfere with existing agreements between private parties.
“Since we have this additional capacity, we can make this purchase without violating existing manufacturers’ commitments to states or organizations,” a White House spokesman said in a statement to CNBC.
However, said Stephen Tang, CEO of rapid test maker OraSure Technologies, rapidly ramping up testing production is difficult. There is a shortage of several components for testing, he said, and staffing to increase the number of shifts to produce more tests is a challenge when demand fluctuates a lot.
“Back in May and June, when we thought vaccines would take care of everything, people started to cut supplies and cut workforce and shifts,” Tan said. Testing demand has started to rise again, approaching a decline, he said. “Businesses, especially those that are expanding, thrive when there is constancy in demand and predictability. Now we are not in a stable predictable situation, ”he said.
Ramping production
Of course, test kit makers are ramping up production and new companies are awaiting FDA approval to begin selling their tests to the public. Therefore, some wholesalers are hoping that Covid tests will become more readily available in the coming months.
WellBefore’s Amin said the country will be in a “better position” in terms of testing by the second quarter, if not sooner, if the FDA allows additional tests in the coming weeks.
Ann Miller, chief executive of the nonprofit Project N95, said testing difficulties will begin to ease by mid-this month.
Meanwhile, Abbott, one of the nation’s largest test makers, is ramping up its offering. A spokesman for Koval said the company expects to conduct 70 million quick tests on BinaxNOW in January, up from 50 million in December, adding that the company could also “expand significantly” in the coming months.
-CNBC’s Sevanni Campos contributed to this report.
WATCH: Biden Administration To Distribute 500 Million Free Home Covid Tests
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