U.S. Invests $232 Million to Produce At-Home Covid-19 Tests

(Bloomberg) -- The U.S. government is investing $231.8 million to ramp up production of at-home Covid-19 tests that don't require a prescription.

Brisbane, Australia-based test-maker Ellume Ltd. said it will deliver 8.5 million at-home tests this year, according to a statement Monday. It plans to open its first U.S. factory, which will increase global production capacity by at least half a million tests a day from the current rate of 100,000.

“We want to help the U.S. reopen as safely and as quickly as possible,” said Ellume Chief Executive Officer Sean Parsons. “We are prioritizing our partnership with the U.S. government to mobilize tests quickly.”

The Ellume deal provides an early look at how President Joe Biden plans to expand Covid-19 testing, a perennial U.S. problem. Efforts to do so are likely to encounter the same barriers as the Trump administration faced, as test manufacturing can take many months to years to scale up. A dearth of testing and high prices per test have been major impediments to widespread consumer access.

“Making easier-to-use tests available to every American is a high priority with obvious benefits,” said Andy Slavitt, a senior adviser to the White House's Covid-19 effort, at a briefing Monday.

Manufacturing more tests should bring down costs, “a chicken-and-egg problem that I think we have taken a step to solve today, by creating mass production so that we will have tens of millions of these tests out there,” Slavitt said.

Ellume's goal is to produce the additional 500,000 tests daily by the end of the year, according to a spokeswoman. The company is currently in talks with regional and state leaders on a manufacturing location, she said.

FDA Clearance

Ellume's test received emergency clearance from the U.S. Food and Drug Administration in December for over-the-counter, at-home use, but isn't yet available in the U.S., the spokeswoman said. The product is a single-use, $30 test that can be self-administered with a nasal swab. It detects proteins on the surface of the coronavirus in 15 minutes, delivering the results to an app.

Ellume was a participant in the National Institutes of Health's Rapid Acceleration of Diagnostics program, through which it received about $30 million to scale up manufacturing. Parsons previously told Bloomberg that the company could have capacity for a million tests a day by mid-2021.

Asked on Monday about the test's $30 price tag and whether there will be enough for widespread screening, Slavitt said he didn't have a complete answer.

“Life doesn't change until we create more ubiquitous capability, not only around what we've talked about here -- vaccines -- but also testing,” he said.

©2021 Bloomberg L.P.