Test

America's lab-testing duopoly just got even more important

Snacks / Thursday, March 12, 2020

First rule for fixing a problem... Be able to identify it. LabCorp and Quest Diagnostics are America's clinical-testing duopoly — they're the ones who analyze your blood/saliva/etc. after your doctor collects test samples. Now, these publicly-traded labs are producing coronavirus tests. US confirmed infections have topped 1K — keeping that number as low as possible depends a lot on these labs:

  • 3 major entities offering testing right now: Labcorp, Quest, and government-run labs.
  • Requesting a test doesn't mean you'll get one — state/local labs run through the CDC have limited testing capacity and aren't well-funded enough to scale.
  • COVID-19 tests are more complex than flu/strep tests — they take 4-6 hours to analyze, and it's challenging for small labs to run them in large batches.

This is Big Clinical's big moment... Lots of molecular testing companies are trying to develop COVID-19 kits. But only LabCorp and Quest have the capacity to scale for the amount of testing needed to crunch your bodily data. Still, both their stocks plunged over 22% in the past 5 days, since they haven't been able to capitalize on demand for testing.

Off the JV bench — and in the Varsity game... LabCorp and Quest could be doing more to scale testing, but they have some "opportunity blockage" (like Hasbro with Baby Yoda).

  • Neither company lets people come into one of their thousands of locations to get tested for COVID-19. They require a sample be taken at a doctor's office, and turnaround can take 3-4 days.
  • The CDC has imposed restrictions (aka, red tape) around the rollout of testing kits and guidance for doctors on who should get the test, slowing the scaling process.

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