U.S. COVID test makers anticipate layoffs as federal funding dries up – Stat

Labcorp patient service center in San Francisco Bay

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U.S. COVID test makers have scaled back production, and some expect layoffs as the federal government diverts funding earmarked for COVID testing to vaccines and treatment amid political wrangling over further allocations, Stat News reported Friday.

White House officials said last week that funding allotted for testing and personal protective equipment would instead be sent for purchases of vaccines and Paxlovid oral antiviral treatment.

Leading COVID-19 test maker Laboratory Corporation (NYSE:LH) said that the government backing was crucial to maintain production capacity to meet the demand for its PCR tests.

“In response to decreasing demand for COVID-19 PCR testing due, in part, to the availability of vaccines, boosters and other testing options and the loss of government funding, Labcorp reduced its staffing levels, primarily contingent and temporary workers, dedicated to daily COVID-19 PCR testing,” LabCorp (LH) spokesman Christopher Allman-Bradshaw said.

Meanwhile, the rapid COVID-19 antigen test maker Abbott (ABT) said that funding constraints have not yet impacted its ability to supply tests. However, with a seasonal decline in COVID case counts, the consistency of orders and manufacturing will be critical to ensure a reliable supply, John Koval, a company spokesman said.

In August, Abbott (ABT) struggled to increase production capacity after the company scaled back production and dismissed thousands of workers in response to a drop in COVID cases in the spring.

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