Test Makers, Retailers Are Raking in Money from Direct-to-Consumer COVID-19 Diagnostics

There is no disguising the fact that COVID-19 testing has proven to be a windfall for laboratories and the diagnostics industry. And even though the massive testing revenues of the past year are not sustainable, there is still lots and lots of money to be made in COVID-19 in the next few years. Of course, the market has and will continue to evolve with direct-to-consumer offering perhaps the most favorable opportunities, at least in the near term. The most recent next big thing in the DTC space is do-it-yourself (DIY) at-home COVID-19 testing using over-the-counter (OTC) test kits that do not require a prescription. Three of the nation’s biggest retailers—CVS, Walgreens and Walmart—have gotten the early jump in the race to lead this emerging market.

CVS Stakes Out Its Claim for OTC COVID-19 Testing

CVS Health Corp. was one of the first companies out of the gate when it began selling OTC COVID-19 tests in mid-April. Initially available to residents of Rhode Island and Massachusetts for in-store purchase, CVS says that tests will be available in all CVS stores nationwide by the end of May. The CVS catalog currently includes three tests:

• Ellume COVID-19 Home Test (costing $30 per test);
• Abbott BinaxNOW COVID-19 Antigen Self Test ($23.99 per test); and
• Pixel by Labcorp PCR Test Home Collection Kit ($119 per test).

The pharmacy giant also plans to sell these OTC kits online.

Walgreens and Walmart Are Close Behind

Walgreens is also aggressively pursuing the OTC COVID-19 testing opportunity via its Boots Alliance. On April 19, the national pharmacy chain announced that it had reached an agreement with Abbott to sell the BinaxNOW Rapid Antigen Self Test on a non-prescription basis in stores nationwide via in-store purchase, curbside pickup and same day delivery at a cost of $23.99 (MRSP). Online sales began a week later.

Like CVS, Walgreens has a nationwide presence with over 5,500 pharmacies, nearly 50 percent of which are located in socially vulnerable areas where testing can be difficult to come by. Walgreens said it plans to expand testing to 6,000 drive-thru testing sites, with about half of them to offer the Abbott BinaxNOW test at no cost.

Retail powerhouse Walmart has also joined the party and is now offering the BinaxNOW test OTC at stores and online. Late last year, all three retailers inked agreements to sell at-home COVID-19 self-collection kits on a prescription basis.

Uber Gets in on the DTC Product Delivery Side

At-home COVID-19 testing and sample collection, both OTC and prescription-based, is becoming so big that it is also drawing players from outside the laboratory testing and retail pharmacy markets. Among the most notable of the new arrivals is Uber, which on April 26 announced that its health care arm was partnering with Clinical Enterprise, Inc. d/b/a empowerDX, a U.S. subsidiary of Luxembourg-based Eurofins Clinical Diagnostics, to provide on-demand delivery service of at-home COVID-19 testing kits to consumers.

empowerDX is an online shop affiliated with CLIA-certified clinical laboratories in the U.S. that offers at-home testing for men’s and women’s health, sexual health and general wellness. Its owner, Eurofins, was one of the many DTC businesses to expand into COVID-19 early in response to the pandemic. Developed by the company’s Eurofins Viracor infectious disease testing laboratory, the empowerDX At-Home COVID-19 PCR Test Kit received Emergency Use Authorization (EUA) from the Food and Drug Administration (FDA) on October 15 for home collection and maintenance of nasal swab specimens to detect RNA from the SARS-CoV-2 virus. Four months later, the agency expanded the kit’s EUA to include DTC use and screening.

The company claims that as of December 2020, the assay offers one of the best sensitivity rates of the 117 laboratories that submitted results to the FDA’s SARS-CoV-2 Reference Panel. The empowerDX at-home test kit, which is 100 percent covered by most insurance carriers, includes step-by-step instructions, a shallow nasal swab, test tube and a pre-paid FedEx package for easy sample returns. Consumers need to activate their kits online before taking the test. Test results are delivered to a secure patient portal within an average of 24 to 48 hours from sample receipt at the company’s CLIA-certified laboratory.

Starting in May, consumers in more than two dozen US cities, including Houston, Austin, Seattle, Denver, Phoenix, Minneapolis, Tampa and Fort Lauderdale, will be able to order the kit directly from empowerDX website without a prescription. Uber will make the kit available for delivery, hopefully in as little as one hour, from Monday through Friday between 8 a.m. and 4 p.m. If the project proves successful, the companies plan to expand it to additional cities in the coming weeks.

Takeaway

COVID-19 testing is proving more sustainable than many believed it would when the public health emergency began. However, the market is an amoeba with sudden and rapid form changes. Clearly, though, sale of tests and testing kits directly to consumers is likely to be a windfall for both testing companies and retailers for the foreseeable future.