With omicron raging in the United States, it is difficult for pharmacies to maintain inventory of Covid testing at home

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Health workers distribute a free fast home Covid-19 test kit at a vaccine clinic in Philadelphia, Pennsylvania, USA on Monday, December 20, 2021.

Hannah Bell | Bloomberg | Getty Images

As cases across the state and the United States surge to record highs, George Panagiotopoulos has been working hard to maintain a stock of Covid-19 tests at a Broadway pharmacy near New York City

He said that the 200 test products received on the Saturday before Christmas were sold out “within a few hours.”

Panagiotoulos, who owns the pharmacy, has a list of 110 people waiting for him to replenish the goods on the Tuesday before Christmas. He said that the 150-piece package arrived two days late and was sold out within 48 hours. Broadway Chemists received another 150 test kits last Thursday, but most of them disappeared within a day.

As of Friday afternoon, the pharmacy had only 20 to 30 test stocks left. Panagiotopoulos predicts that as the school reopens after the holidays, parents are eager to get their children tested, and demand will remain high.

his The experience is playing out in Covid hotspots across the country, as the infection rate has reached an all-time high in the United States, which is mainly driven by the highly contagious variant of omicron.

“Demand Tsunami”

Bidding war

Abbott spokesperson John Koval (John Koval) said that Abbott’s BinaxNOW home test received emergency FDA approval in March and is currently experiencing “unprecedented demand.”

“We are sending them out as fast as possible,” he said. “This includes running our American manufacturing plants 24/7, hiring more workers and investing in automation,” he said.

Shaz Amin, the founder of a company that sells home tests online, said the surge in demand has allowed distributors to raise prices because buyers like his company WellBefore are basically caught in a bidding war. To ensure limited supply.

“No matter how much we paid for the test suite a week ago, today we will pay 25% higher,” Amin said. “Someone stood behind us and said,’I will give you 25 cents to accept WellBefore’s allocation.'”

Amin said that the shortage meant that Covid test kits were sold out even before they arrived.

Prepayments

Ryen Neuman, vice president of logistics at Sunline Supply and Arnold’s Office Furniture, said that they usually pay a 10% deposit for orders for health and safety products, and then rest when they arrive.

But for the Covid test suite, they “must pay 100% of the product cost before seeing, viewing, and smelling it” because the demand for testing is so high, he said, noting that he thinks the market for test suites will be “tightened.” At least six months.

“It seems that the output cannot meet the current needs of the American population,” he said.

Several wholesale buyers stated that they are trying to stock some of the lesser-known brands that have been approved for sale by the Food and Drug Administration. They work in a similar way to the Covid test of well-known brands such as Abbott’s BinaxNOW and Quidel’s QuickVue. For example, Neumann said that some of the more popular test distributors charge too much, which makes less well-known brands more attractive.

Shortage of raw materials

Matt Regan, president and chief executive officer of Code 1 Supply, a medical supplies distributor, said on Thursday that the test kit components have dried up in the past 7 to 10 days. Reagan said that his business partners told him that there was a shortage of raw materials for the test kits. He said they also told him that distributors are prioritizing orders from federal agencies over other buyers.

Three other companies that sell Covid at-home testing, including iPromo, Sunline Supply, and the non-profit project N95, that CNBC talked to, also stated that they were also told that the Biden government’s new plan to provide 500 million home testing to the public is delaying them Own plan. Shipments. But the White House said its plan should not hinder existing agreements between private parties.

A White House official said in a statement to CNBC: “Because we have this extra capacity, we can make this purchase without interrupting the existing manufacturers’ commitments to states or organizations.”

However, Steven Tang, CEO of OraSure Technologies, a rapid test manufacturer, said that rapid increase in test manufacturing is difficult. He said that several test components are in short supply, and when demand fluctuates so greatly, it is a challenge to staff to add more shifts to conduct more tests.

“As early as May and June, when we thought that vaccines would solve all problems, people started to reduce supply, reduce labor and shifts,” Tang said. He said that in the fall, the demand for testing began to rise again. “When demand is consistent and predictable, companies, especially those that are expanding, will flourish. We are not in a consistent and predictable situation now,” he said.

Ramp production

To be sure, test kit manufacturers are increasing production, and the new company is waiting for FDA approval to begin selling their tests to the public. Therefore, some wholesalers hope that it will be easier to obtain Covid testing in the coming months.

WellBefore’s Amin said that if the FDA approves more tests in the next few weeks, the United States will be in a “better position” by the second quarter, if not earlier.

Anne Miller, executive director of the non-profit project N95, believes that by the middle of this month, the test tightening will begin to ease.

At the same time, Abbott, one of the largest test manufacturers in the United States, is increasing supply. Spokesperson Kowal said that its goal is to conduct 70 million BinaxNOW rapid tests in January, up from 50 million in December, adding that the company can “further scale up in the next few months.”

-Sevanny Campos of CNBC contributed to this report.

Subscribe to CNBC on YouTube.

Watch: The Biden government will distribute 500 million free home Covid tests


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