Abbott gets US$1 billion contract to supply US Army with COVID-19 antigen test devices

USA – The US Army has signed a US$1 billion contract with Abbott for an unspecified number of its BinaxNOW and ID NOW tests, which are due by the end of June.

At the same time, the Department of Defense announced earlier this month that the government had modified previous contracts with Abbott and California-based diagnostic manufacturer iHealth Labs to purchase an additional 176.8 million over-the-counter COVID tests.

This was a step toward the Biden administration’s redoubled goal of delivering 1 billion free at-home tests in response to the rise of the coronavirus’s omicron variant.

In January, the DOD awarded iHealth Labs, a subsidiary of China-based devicemaker Andon Health, a US$1.3 billion contract.

Similarly, Roche Diagnostics and Abbott received US$340 million and US$306 million contracts, respectively, to supply a total of 380 million over-the-counter diagnostics out of a planned 500 million for the White House’s plans to mail coronavirus tests to people’s homes free of charge.

The new contracts also follow the Biden administration’s plans to open hundreds of nationwide “test to treat” centers, which were announced during the president’s State of the Union address earlier this month.

These centers will provide free COVID screening and, if a person tests positive, immediate treatment in a single location.

Since last December, the DOD has also awarded COVID test supply contracts to Siemens Healthineers, MilliporeSigma, and several other companies in order to obtain millions of diagnostic kits and expand the manufacturing capacity of domestic test component production lines.

Following a nearly billion-dollar drop in revenues in mid-2021 as daily case numbers dropped due to the widespread availability of vaccines in the United States, Abbott’s COVID test sales made a late comeback last year after the delta and omicron variants rekindled demand.

During the relative drought in rapid-testing revenues, Abbott reduced its R&D spending plans and began laying off workers on its test production lines.

However, as vaccination rates plateaued and more contagious variants emerged, the need for screening increased once more: the company’s BinaxNow, Panbio, and ID NOW tests alone brought in US$1.6 billion in the third quarter of 2021.

The year’s ups and downs added up to a total of US$7.7 billion in COVID test sales, dwarfing 2020’s US$3.9 billion.

Abbott reported in January that it had distributed more than 1.4 billion diagnostics since the outbreak began.

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