Maker of Rapid COVID Tests Told Factory to Destroy Inventory

Sheri Fink  4 days ago

For weeks in June and July, workers at a Maine factory making one of America’s most popular rapid tests for Covid-19 were given a task that shocked them: take apart millions of the products they had worked so hard to create and stuff them into garbage bags.

Soon afterward, Andy Wilkinson, a site manager for Abbott Laboratories, the manufacturer, stood before rows of employees to announce layoffs. The company canceled contracts with suppliers and shuttered the only other plant making the test, in Illinois, dismissing a work force of 2,000. “The numbers are going down,” he told the workers of the demand for testing, saying it wasn’t their fault. “This is all about money.”

© Abbott, via Agence France-Presse — Getty Images BinaxNOW, a rapid antigen test made by Abbott, can provide results in 15 minutes.

As virus cases in the U.S. plummeted this spring, so did Abbott’s Covid-testing sales. But now, amid a new surge in infections, steps the company took to eliminate stock and wind down manufacturing are proving untimely — hobbling efforts to expand screening as the highly contagious Delta variant rages across the country.

Sign up for The Morning newsletter from The New York Times

Demand for the 15-minute antigen test, BinaxNOW, is soaring again as people return to schools and offices. Yet Abbott has reportedly told thousands of newly interested companies that it cannot equip their testing programs in the near future. CVS, Rite Aid and Walgreens locations have been selling out of the at-home version, and Amazon shows shipping delays of up to three weeks. Abbott is scrambling to hire back hundreds of workers.

© Mohamed Azakir/Reuters Students at College des Saints Coeurs Ain Najm in Lebanon. The W.H.O. has had trouble buying tests for schools in the country.

America was notoriously slow in rolling out testing in the early days of the pandemic, and the story of the Abbott tests is a microcosm of the larger challenges of ensuring that the private sector can deliver the tools needed to fight public health crises, both before they happen and during the twists and turns of an actual event.

“Businesses crave certainty, and pandemics don’t lend certainty to demand,” said Stephen S. Tang, chief executive of OraSure Technologies, which in the midst of the testing slump in June received emergency F.D.A. authorization for its own rapid test, InteliSwab, long in development. But the company is not yet supplying retail stores.

Meanwhile, Dr. Sean Parsons, chief executive of Ellume, the Australian manufacturer of a competitor rapid test, said this week that demand was 1,000 times what it had forecast and that it was racing to set up a U.S. plant.

Abbott’s decisions have ramifications even beyond the United States. Employees in Maine, many of them immigrants from African countries, were upset at having to discard what might have been donated. Other countries probably could have used the materials, according to Dr. Sergio Carmona, chief medical officer of FIND, a nonprofit that promotes access to diagnostics.

“This makes me feel sick,” he said of the destruction, noting that more than a dozen African nations have no domestic funds to buy Covid tests.

In an interview, Robert B. Ford, Abbott’s chief executive, argued that the discarded materials — finished test cards — should not be viewed as tests. Kits for sale also include swabs, liquid buffer and instructions.

“I would just caution in terms of using the word ‘destroy’ because it kind of gives a sense here that we’ve got all these tests that were in packages and we threw them away,” he added.

Asked why the materials needed to be thrown away, Mr. Ford cited a limited shelf life. But photographs taken in June and July of some of the estimated 8.6 million Abbott test cards employees said were shredded show expiration dates more than seven months away.

Workers had their own conjectures. Some figured layoffs were imminent and there would be no employees left to dispose of the excess, while others thought the company did not want to flood the market and decrease the value of its product: A box of two home tests carries a retail price of $20 to $24.

As for donating BinaxNOW, it is a U.S. product that is not registered internationally, Mr. Ford said. “We couldn’t just ship it there.” But he acknowledged that the company did in fact send a million tests to India in May, paid for by the U.S. government.

Dr. Mariangela Batista Galvao Simao, an assistant director general at the W.H.O., said the agency was not made aware of the BinaxNOW surplus. While some countries might have had regulatory barriers, the W.H.O. “would have worked to facilitate whatever is needed.” Donating tests would probably have required considerable extra work for Abbott, she added.

Addressing the challenges ahead in the U.S., Abbott’s public affairs director, Aly Morici, said in an email that it was “difficult to scale up on a dime, but we’re doing so again.” She acknowledged that “there will be some supply constraints over the coming weeks.”

Abbott invited workers back to the plant in Maine this month to meet what it described in a letter as “unexpected manufacturing needs.” But it is unclear how many employees will return. They would forgo weeks of being paid for doing no work, as provided for in their severance packages, with only a two-week “thank you” pay extension and no guarantee that their jobs will last.

The company was not in this position in early 2020. Anticipating the need for quick, reliable tests that required no specialized equipment, Abbott assembled a team of about 100 scientists, supply-chain experts and engineers to design BinaxNOW in a highly compressed time frame. The company took risks, importing expensive equipment and opening two U.S. factories. “Everybody was working nonstop,” Mr. Ford said. “This is ultimately what Abbott was built for.”

The test strip, resembling the one on a pregnancy stick, is less sensitive than PCR but delivers results on the spot, allowing a company or school to take immediate action.

The F.D.A. granted BinaxNOW emergency authorization last August. A day later, the U.S. government announced plans to buy 150 million of the tests for $760 million — $5 a test, plus shipping — to be used in settings including nursing homes and schools.

Friendship Public Charter School in Washington received 20,000 government-purchased BinaxNOW tests free of charge as part of a pilot program supported by the Rockefeller Foundation. Patricia A. Brantley, the school’s chief executive, said that 70 percent of students’ parents opted in for them to get swabbed once a week. “Testing is still an important part of the strategy not only to reopen schools but to keep them open,” Ms. Brantley said.

Northwestern University also adopted BinaxNOW early, testing students twice a week. The university performed up to 5,000 rapid tests a day, according to Luke Figora, the school’s vice president for operations.

After the F.D.A. authorized BinaxNOW for at-home use, Northwestern bought 150,000 kits, handing them out to students, faculty and staff. “We wanted to give them one more tool to stay safe,” Mr. Figora said.

Abbott met its initial production goals by keeping manufacturing lines running 24 hours a day and emphasizing speed to an extent that some employees said made them uncomfortable.

On a January conference call, investors learned the hard work was paying off: Abbott had sold $2.4 billion in coronavirus tests, mostly rapid ones, in the final quarter of 2020. “I expect testing demand is still going to remain high, even as the vaccines roll out,” Mr. Ford said on the call.

“The big point here is the sustainability.”

For a while, it appeared he would be right. In March, the federal government announced $10 billion to support testing in schools. By April, Abbott had reaped another $2.2 billion in testing sales. The same month, the F.D.A. extended BinaxNOW’s shelf life, originally six months, to a year.

But then the C.D.C. came out with a game-changing announcement: Vaccinated people without symptoms no longer needed to be tested, even after exposure.

“We couldn’t have anticipated what has occurred over the past several weeks,” Mr. Ford told investors on another call, describing “a sharp and rapid decline in demand,” particularly for rapid tests, and dropping the company’s earnings forecast. Abbott later announced a $500 million restructuring plan.

“Are you not thinking that there’s going to be any kind of, you know, resurgence or ramp-up of screening testing in the fall?” Matt Taylor, a managing director at UBS, asked on the call. “What are you to do with all the capacity that you’ve built up?”

The destruction that followed lasted about a month. A list of “lots to be destroyed” appeared on a white board at the plant in Westbrook, Maine, and some of those had recently been labeled with new expiration dates.

Several employees, not authorized to speak for the company, said they were told to eliminate 25 lots of about 345,000 test cards each at the Westbrook factory. Mr. Ford would not confirm that number.

Test pouches were dumped onto tables, one former employee, Steven Hall, recalled. “Some people ripped them open singly, and some people used the scissors and did four or five at a time,” he said. They stuffed foil wrappers and desiccant packets into trash bags and boxed the test cards for shredding.

As the Delta variant drives a new appreciation for screening programs, and the C.D.C. again recommends testing vaccinated people who are exposed, Abbott’s inability to meet demand is causing pain in the business world.

The U.S. Rapid Action Consortium, which buys BinaxNOW on behalf of more than a dozen workplace testing programs, including Air Canada and Scotiabank, has seen increased interest, according to Darren Saumur, chief operating officer at Genpact, a founding member. But when the group asked to bump up its purchases, an Abbott sales representative said that she could only provide what was already committed, adding that the company had been unable to fulfill 14,000 requests from new clients, Mr. Saumur said. (Abbott declined to comment on the figure.)

The group’s negotiations with Abbott to lower the cost of the tests were also halted. “The price points we were talking about they definitely don’t want to talk about anymore,” Mr. Saumur said.

For many Abbott employees, especially those from African countries, the most troubling aspect was the waste of it all. “I was hurting, seeing that,” said Aristoteles Landa, a worker from Angola.

Abbott representatives said the company was able to meet demand for its rapid Covid tests outside the U.S. through sales of a South Korean-manufactured version called Panbio.

Last fall, the W.H.O. approved that test for emergency use, and the Global Fund committed an initial $50 million to allow low- and middle-income countries to buy Panbio and another company’s test at a maximum price of $5 each (a malaria test based on similar technology sells for about $0.20). A coalition of international organizations announced a goal of securing a half-billion tests within the year.

But more than 10 months after the announcement, only a fraction of that number — under 60 million — has been procured under the plan, according to the W.H.O., with cost being one constraint.

Amal Barakat, a virologist at the W.H.O.’s Eastern Mediterranean regional office, shook her head when she heard about the destruction in Maine. “My heart,” she said, “it hurts.”

In many countries, Dr. Barakat said, “we can’t fulfill all their demand.” Lebanon recently requested rapid tests for children in schools, she said, but her agency lacks the funds to procure them. Laboratories there were importing “whatever,” regardless of regulatory status.

She dismissed the idea that the test could not go to other countries because it had not been approved. “This is just paperwork,” she said.

Emily Anthes contributed reporting.