Abbott Laboratories (ABT) has an enviable problem: It can't produce enough rapid at-home COVID-19 antigen tests to keep up with demand.
The company had previously warned that there would be a shortage of tests, though they are not the result of the supply chain issues many companies are facing.
In a statement, Abbott explained that the company had started to reduce production when demand waned earlier this year.
But following the surge of the Delta variant in recent months, which resulted in a surge in demand and changes in public health guidance, the company began re-opening and hiring more workers at its plants in Illinois and Maine, according to a statement.
CEO Robert Ford told Yahoo Finance Tuesday that Abbott will soon be producing as many tests as it was last year, prior to vaccines being available, by the end of October, and that supply-chain constraints are not an issue.
"So the two manufacturing sites that we set up were built here in the U.S., and the majority of our suppliers are all U.S.-based. So we're not seeing that crunch on supply chain when it comes to to the BinaxNOW test," he said.
Ford said the popularity of the product paves the way for more opportunity to put tests in patients' hands.
"So a lot of testing historically has been done in hospitals and labs. And what we see now with COVID, is this trend to be able to add on a different type of testing, one that's a little bit more decentralized," Ford added.
That includes at home, at pharmacies and even in hotels, airports or other venues.
"We've long believed in the trend to decentralize some of the testing. It's not an 'either or', it's an 'and,'" Ford said.
The BinaxNOW rapid antigen test was the first to be widely used by the U.S. federal government, and cost just $5 per test when the company was shipping 40 tests per box.
Since hitting the shelves of major retailers like CVS (CVS), Walgreens (WBA) and Walmart (WMT), the cost rose to between $14 and $24 for a test kit, which includes two tests. That still puts it at an advantage compared to competitors and new entrants - of which one, Ellume, recently had to recall its at-home test. Ellume's test sells for $26 per test, more than triple the price of a single Abbott test.
The cost of at-home tests has been a concern for some experts, who point to Europe and other regions of the world that have tests available to the public for $5 or less.
Ford noted that additional costs of distribution, stocking and markup for retailers played a role in the increased price, but that over time the situation should improve — especially as Abbott pursues other testing options.
"I believe that we'll continue to see improvement in costs and in prices, and it will become more and more and more accessible as we go forward," Ford said.
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