Private labs have conducted more than 85 percent of all COVID-19 tests in the U.S., but those tests haven't offset the financial losses some labs are facing due to a lack of routine testing.
Two of the largest diagnostics companies, Quest Diagnostics and LabCorp, have both taken a hard hit to their finances due to a lack of routine testing. Quest reported first-quarter revenues of $1.82 billion, down 3.7 percent compared to 2019. LabCorp's diagnostics revenue fell to $1.7 billion in the first quarter, down 1.2 percent from the year before.
As hospitals have been prohibited from conducting elective surgeries to focus on treating COVID-19 patients, Quest and LabCorp have seen a significant decline in their routine testing business.
As of April 27, Quest Diagnostics has performed more than 1 million COVID-19 diagnostic tests and 75,000 antibody tests since the pandemic began.
But COVID-19 testing hasn't offset the decline in routine testing as the Secaucus, N.J.-based company's overall testing volumes declined by more than 40 percent during the last two weeks of March and are expected to continue dropping until it hits between 50 percent and 60 percent, MedTech Dive reported.
Quest had to furlough 4,000 employees because of the business declines and the company withdrew its 2020 financial guidance.
LabCorp's demand for testing fell 50 percent to 55 percent at the end of the first fiscal quarter compared to normal daily levels, CNBC reported.
CEO Adam Schechter told CNBC he expects the company will offset some of the testing declines by expanding capacity for COVID-19 antibody testing, as it plans to quadruple its capacity for antibody tests by mid-May.
But so far, the increased COVID-19 diagnostic testing Burlington, N.C.-based LabCorp has conducted hasn't offset the decline in routine testing.
Mr. Schechter told CNBC that unless LabCorp starts to see routine diagnostic test volumes return to normal levels, it will be hard for COVID-19 testing to make up for the losses.
LabCorp has also had to furlough workers and withdrew its 2020 financial guidance.