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Test Makers Led by iHealth Labs to Get $2 Billion in U.S. Deal (1)

Jan. 14, 2022, 10:06 PMUpdated: Jan. 14, 2022, 10:25 PM

The U.S. agreed to spend $1.3 billion to buy Covid test kits from iHealth Labs Inc., $340 million from Roche Diagnostics Corp., and $306 million from Abbott Rapid Dx North America, Defense Department officials said Friday.

The department announced the agreements Thursday to buy a combined 380 million tests from the three manufacturers without saying how much it planned to spend.

The planned spending marks the next step in Biden’s plan to counter surging cases of the omicron variant of the coronavirus by providing 1 billion rapid tests to Americans for free. Retailers are having trouble keeping at-home test kits in stock and long lines persist at testing centers across the country.

The White House expects to spend $4 billion on shipping the first 500 million tests to U.S. households, senior administration officials told reporters on Friday.

The White House will begin accepting orders for the half-billion free tests on Wednesday, the same officials said. Families can order shipment of four tests per household by phone or via CovidTests.gov. The administration expects the tests to initially be delivered by the U.S. Postal Service in seven to 12 days.

It’s unclear how it will achieve that goal so quickly, given that testing manufacturers are dealing with surging demand, labor shortages, and capacity challenges. A senior administration official told reporters Friday that she is confident the administration can meet their delivery timelines.

The administration has so far signed contracts to buy 420 million tests from seven companies. Four of those businesses—Goldbelt Security LLC, Revival Health, Inc., Medea Inc., and Atlantic Trading LLC—have tests stored in warehouses and don’t manufacture them. The administration will in the early weeks of its free rapid testing program tap the existing supplies stored in warehouses, Dawn O’Connell, Health and Human Services assistant secretary for preparedness and response, told a Senate panel this week.

(Adds details throughout about shipment of tests and other agreements to buy them.)

To contact the reporter on this story: Courtney Rozen in Washington at crozen@bgov.com

To contact the editor responsible for this story: Bernie Kohn at bkohn@bloomberglaw.com

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