By Carl O’Donnell

(Reuters). (Reuters) – A rising demand for COVID-19 test results from U.S. employers has exacerbated a nationwide lack of quick tests in recent weeks. It is also driving up the costs for state- and local testing programs. Industry executives and officials said that this was causing an increase in state and local testing program costs.

The testmakers include Abbott Laboratories To meet growing demand, LumiraDX Ltd and Quidel (NASDAQ) Corp are increasing production. However, significantly increasing the test output could take several weeks to months according to half a dozen industry experts. The result will be that the tests are more expensive in the long-term.

Doug Bryant, Quidel’s Chief Executive Officer said that “employer demand is crazy.” We won’t have the resources to fulfill all of your requests.

Nearly 12 state governments stated that they have difficulty finding rapid tests. Rapid tests are essential for COVID-19 surveillance programs and provide instant results.

A spokesperson from the state’s public health agency stated that Missouri’s limited supply of Abbott’s Binax Now Rapid Test, which is typically sold to states at $5 per unit, has forced them to look into other options.

“We are exploring other rapid antigen tests and finding most are at least three times higher than Abbott’s rapid antigen test,” the spokesperson said, adding that Missouri has not yet had to purchase the pricier tests.

Oklahoma began to pay higher test prices in recent weeks. This was according to Michael DeRemer who is the director of state emergency preparedness.

State governments have been struggling to acquire https://www.reuters.com/world/us/us-covid-19-tests-again-short-supply-infections-soar-schools-reopen-2021-08-27 enough rapid tests for several months after a surge in COVID-19 cases fueled by the more contagious Delta variant.

Employers in the United States have been scrambling to perform weekly tests on unvaccinated employees since September’s White House announcement.

Emerald Packaging Inc (NYSE:) Inc is a San Francisco plastic bag manufacturing company with 250 employees. It sees compliance with government testing regulations as a burden, and encourages its workers to be vaccinated.

Kevin Kelly, CEO of Emerald said that Emerald could need to be vaccinated once the federal rules go into effect. According to Kelly, Emerald spent approximately $50,000 on testing employees and weekly tests could increase costs.

According to CEO Bryant, Quidel had to turn down more than half the requests of employers to stock up in advance of the mandate. This mandate is expected to go into effect October.

Bryant stated that it had also to delay exports of quick tests to certain foreign governments for the next year. Quidel will continue to deliver on contracts it has with Canada.

BIDDING WARS, SIGNIFICANT MARKUPS

Vijay Kumar from Evercore ISI, an analyst at Evercore, says that more than 50 million COVID-19 rapid tests are manufactured by American test makers each month. However, this is insufficient for surveillance testing at schools, workplaces, and other places across the nation.

Mologic, one the most prominent British testmakers, estimates that rapid antigen testing can be as cheap as $2 per unit. Bidding wars among the states, employers, and health systems have led to higher costs in the United States.

According to a spokesperson, South Carolina is spending as high as $130 for each of its rapid test.

This contrasts starkly with other European and UK countries. Germany’s large-scale government purchases enable it to provide rapid testing to its residents at a cost of less than $1 per person. It is also not facing severe shortages. 

Abbott and Quidel stated that they don’t plan on increasing test prices. Retailers and test suppliers often buy tests to resell at substantial markups.

Walgreens Boots Alliance and CVS Health Corp sell Abbott’s Binax Now Rapid Tests – listed by Abbott for $5 – at $12 each test in pharmacies. Walmart (NYSE) Inc., Kroger (NYSE) and Amazon.com Inc. (NASDAQ:) all charge $8 for each test, even though they have slashed costs temporarily.

The $10 billion that the White House had set aside for schools testing has been used by most states. Federal aid has been cut in some states like Missouri.

Employers and customers must also pay for quick test purchases.  

Abbott reopened a Illinois facility it shuttered earlier this summer in an attempt to boost production. According to Reuters, the plant was on track to make 50 million Binax Now testing per month as of the end October.

Bryant explained that Quidel plans to build a new plant, which will increase the company’s rapid testing output by as much as 70,000,000 per month. But it won’t become operational until next year. LumiraDX intends to double its testing production before year-end.

U.S. regulators allowed ACON Laboratories to conduct a quick test on Monday. They plan to produce up 100 million units per month at the end this year.

“There’s definitely a supply chain squeeze on the rapid antigen side,” said Matthew McKnight, an executive at Ginkgo BioWorks, which manages surveillance testing programs for employers. “It will take a couple months (before) production catches up.”