NEW YORK – As laboratories and vendors raced to ramp up molecular testing for SARS-CoV-2 this winter and spring, they ran into a series of instrument and reagent shortages, exposing a number of previously little noticed chokepoints in the testing supply chain.
Now in vitro diagnostic firms are working to massively grow rapid antigen testing for the virus, and again they are running up against equipment, materials, and manufacturing constraints that will limit how much and how quickly capacity can be expanded.
In recent weeks, IVD vendors Abbott and Roche have launched instrument-free point-of-care rapid antigen tests for SARS-CoV-2. Both companies have announced that they are capable of producing tens of millions of these tests per month, but even at that level of production, demand still outstrips supply. In the case of Abbott, for instance, the US Department of Health and Human Services has purchased 150 million of the company's BinaxNow test, essentially monopolizing the supply through the end of this year.
Meanwhile, a number of other vendors, large and small, have instrument-free rapid antigen tests in the works, and policymakers and analysts continue to call for expansion of testing capacity, with some projecting a need of as many as 20 million tests per day in the US alone.
Unsurprisingly, this has put a strain on the industry's manufacturing capabilities.
"The interesting thing about this industry is that the big IVD players—Abbott, BD, Roche, PerkinElmer — typically don't have a lot of excess capacity in their manufacturing lines to handle a surge like COVID has presented," said Tony Lemmo, CEO of diagnostic manufacturing firm BioDot.
This means that they have had to invest in new production lines or manufacturing facilities to meet the dramatic growth in demand. This takes time, though, Lemmo noted. "A new facility requires a lot of planning and it probably takes six months of effort to get that going."
In fact, that likely underestimates the challenge. Getting a new facility up and running involves sourcing the automated systems required to produce tests in those new facilities, and the companies that build these systems are facing production and supply challenges of their own.
Ted Meigs is cofounder, president, and CEO of Kinematic Automation, a Twain Harte, California-based company that produces the automated manufacturing systems used to produce medical equipment including the sort of point-of-care assays used to test for SARS-CoV-2.
He said his firm recently received a request from a large IVD manufacturer for seven of its systems used for laminating test strips. The company wanted the new systems in six weeks, which Meigs said is half of the typical 12-week delivery time for those machines.
Another major IVD vendor has requested multiple machines that typically take 10 months to deliver in three to four months, he said.
Meigs said that his company has been able to fulfil these requests, but that it has had to scramble to do so.
"We're paying overtime, we're giving bonuses out, incentivizing people to work around the clock," he said.
In some cases, rather than build the instrumentation itself, Kinematic has simply sourced the parts and passed them onto the customer to put together themselves.
"One of our partners had their own in-house machine shop capabilities," Meigs said. "We gave them all the engineering and all the documentation so they could build our platforms, and they were able to actually get the parts and build the machines."
While manpower to build the machinery to produce these tests is in short supply, so are the parts that go into the machines themselves.
"The fact that there are all these companies whose business has doubled, tripled, quadrupled, and everything needs to be done immediately has put a serious strain on the supply chain of the very basic components you need to build the machines," Meigs said. "We're talking motors, sensors, cables. Whether you're building the equipment, or you are building the bits and pieces to sell to the people who are building the equipment, we're all in the same boat."
Without enough automation equipment to go around, assembly of the tests has emerged as a major chokepoint, Lemmo said.
"The biggest challenge in many instances is really on the assembly side, cutting the strips, putting them into the cassettes, sealing those and pouching them," he said. "That part of the process is often the slow step. Each of those [test] cassettes that you see usually have some custom elements that work with the individual test that is being made."
"Right now, some of the big players are literally hiring people off the street to manually put this stuff together, waiting for this automation equipment," Meigs said.
He added that while typically the IVD firms were responsible for sourcing the raw materials that go into their tests, he was aware that this was a major challenge for the industry, as well.
For instance, even before the pandemic, IVD makers were struggling with a shortage of the nitrocellulose material commonly used in point-of-care and home testing strips.
"To build a machine that makes nitrocellulose requires a two to three year lead time," Meigs said, noting that one of the major vendors of this material (whom he declined to name on the record) had not correctly anticipated demand for the product and, so, had failed to build enough capacity. This vendor had corrected course and managed to bring a new machine online for nitrocellulose production just around the time the pandemic hit, he said. "But there is still a strain."
Lemmo said that what he called panic buying of nitrocellulose in the early days of the pandemic further disrupted the supply chain for this material, though he noted that supply has since come more back into balance.
Meigs said the testing materials supply also impacts the production of automation equipment as his company and others like it need enough material to make sure their machinery is working properly before shipping them out.
"We can't qualify [a machine] without materials, without molded parts, and glass fiber, and backing cards, and nitrocellulose," he said.
Meigs said that despite the challenges faced by the industry, based on the timing of deliveries of automation machinery, he expects that there will be an explosion of point-of-care testing capacity at the beginning of 2021.
"All of this demand came in April and May, and these machines are just starting to hit the production floor right now," he said. "And I would guess that by the first of the year there is going to be a huge flood of this kind of equipment into the marketplace, allowing the manufacturers to now really produce [high] volumes."
Meigs said he couldn't give an exact number for what test capacity could reach but based on requests his firm is seeing it could easily reach the level of hundreds of millions of tests per month.
"We get requests on a weekly basis from companies that all have the same goal, they need to make 25 million a month," he said. "And we're only getting a fraction of that traffic. Other companies are getting the same requests, some by the same people and some by different people."
"I would say that in the first quarter of 2021, we're going to have ten times the capacity of what is out there right now," he said.
This story first appeared in our sister publication 360Dx, which provides in-depth coverage of in vitro diagnostics and the clinical lab market.