The True Cost of a Virus Test is $10 not $100

The number of virus tests that the US uses to fight the ongoing pandemic will be very sensitive to the cost of a test. Several bits of evidence suggest that the true cost per person tested is about $10.

Yet in the United States, the providers of the approved clinical diagnostic tests for SARS-CoV-2 are able to charge a significant monopoly markup over their marginal cost of doing the test. The US government pays $100 per test to labs that are using high throughput technologies.

It would not be surprising if the two dominant providers of diagnostic tests, LabCorp and Quest, oppose entry into the testing business by university labs that can offer the tests at one-tenth the price they charge. Nor would it be surprising if these powerful companies were feeding information to news organizations and to members of Congress which suggests that it would be a terrible idea to invite university labs in as new providers of test services.

~3 minutes

The American Academy of Pediatrics Challenges CDC Guidance on Schools

According to the policy guidance on reopening schools from the American Academy of Pediatrics (AAP):

“The AAP strongly advocates that all policy considerations for the coming school year should start with a goal of having students physically present in school.”

Physical presence matters because students learn less when they study remotely. Students from poorer families suffer the most.

As a result, the AAP challenges some of the worst elements in the CDC guidance, including its advice on physical distance, which will keep students out of the classroom, and its support for temperature checks, which are known to have failed.

~2 minutes

The FDA's Perpetual Process Machine

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.

~5 minutes

US Pandemic Update: June 2020

  • 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.

~3 minutes

$11 billion for Testing by States Could Run Out in 8 Days

(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.

~6 minutes
MORE POSTS