It might be time to review the massive damage that the FDA is doing by restricting the supply and use of tests for the SARS-CoV-2 virus.
Massive? With enough tests, the US could have avoided the enormous cost that this virus is imposing – at least 200,000 excess deaths and $8 trillion in lost output.
Here I’ll provide a recap with links about how the FDA responded to just a couple of issues since the start of the pandemic.
Labor market: In May 2019, about 5.9 million people were unemployed in a labor force of 163 million. In May 2020, the full count of the unemployed is about 30.2 million, which when divided by the May 2019 labor force, implies an effective unemployment rate of 18.6%
GDP: By 2030, current projections foresee a cumulative loss in real GDP of $7.9 trillion
New Infections: About 100,000 people in the United States are getting infected with the SARS-CoV-2 virus each day
Currently Infected: 1.4 million people in the US
Ever Infected: 16 million people (4.8% of the US population)
Projected Deaths: The current projections for total deaths from Covid-19, the disease that the virus causes, are expected to be in the range 150,000 - 215,000 by October 1, 2020.
(Data updates, May 1)
In this post, I list a number of specific applications where tests could save lives and restore confidence. Tests could stop the deaths in nursing homes. They could make it safe for nurses to go back to their jobs. They could make parents feel safe taking their children to the clinic to get a vaccination. Such applications yield an immediate demand for 13.9 million tests per day.
At the current government reimbursement rate of $100 per test, the daily cost of these tests would be $1.39 billion. At this rate, the $11 billion that the Congress allocated to the states to support testing will be exhausted in 8 days.
Imagine a world in which the only way to get a soda is to get your doctor to write a prescription. It costs $20 per can. Your insurance company pays. The economy produces about 100,000 sodas each day.
If you lived in this world, do you think you could get people to scale up the production of soda to a level of millions of cans per day? It would be a challenge, but not because it is hard to produce and distribute soda.
America is confronting two crises: an economic crisis laying waste to our livelihoods and a health crisis threatening our lives. The twin crises are deeply intertwined: our economy cannot be reopened without credibly addressing fears of infection and resurgence.