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Please note!
This fact brief was originally published as an experiment to test the concepts behind fact briefs.
Readers should be aware that while there is still a lot of useful information in fact briefs like this one, not all of them reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date, don't hesitate to contact us at support@gigafact.org.
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FACT BRIEF

Are COVID-19 tests producing substantial profits for the US health care industry?

By Lisa Freedland
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YES

Private U.S. providers of COVID-19 diagnostic tests and testing services have continued to make significant profits in 2021.

Abbott, one of the best-known manufacturers of the tests, reported global COVID-19 testing-related sales of $1.9 billion in the third quarter of 2021, as the surge of Delta-variant infections boosted demand for its tests. It reported profits 50% above forecasts and said it expected 40% growth in profits for the full year.

Companies, clinics and hospitals administering the tests also “have been booking record profits,” Kaiser Health News reported in May. U.S. regulations don’t limit fees charged to insurers or the public. In 2020, Quest Diagnostics made $42 in revenue per procedure, which on average cost $29 to administer—margins one-third higher than the company generates from its regular activities, according to Reuters. Quest in October raised its 2021 earnings outlook based on “higher than anticipated" COVID-19 testing volumes.

This Brief has been updated to include third-quarter financial figures.

This fact brief is responsive to conversations such as this one.
Sources
BioWorld Abbott soundly beats earnings estimates with delta boost
Abbott Abbott Reports Third-Quarter 2021 Results; Achieves Strong Double-Digit Earnings Growth and Raises Guidance
Kaiser Health News Covid Testing Has Turned Into a Financial Windfall for Hospitals and Other Providers
Reuters Breakingviews - How U.S. made Covid-19 tests a profitable disaster
The Motley Fool Transcript of Quest Diagnostics third quarter 2021 earnings call
ABOUT THE CONTRIBUTOR
Gigafact
Between 2020 and 2022, under close editorial supervision, Gigafact contracted a group of freelance writers and editors to test the concepts for fact briefs and provide inputs to our software development process. We call this effort Gigafact Foundry. Over the course of these two years, Gigafact Foundry writers published over 1500 fact briefs in response to claims they found online. Their important work forms the basis of Gigafact formats and editorial guidelines, and is available to the public on Gigafact.org. Readers should be aware that while there is still a lot of relevant information to be found, not all fact briefs produced by Gigafact Foundry reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date and need to be looked at with fresh eyes, don't hesitate to contact us at support@gigafact.org.
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About fact briefs published on Gigafact
Fact briefs are short, credibly sourced summaries that offer “yes/no” answers in response to claims found online. They rely on publicly available, often primary source data and documents. Fact briefs are created by contributors to Gigafact —a nonprofit project looking to expand participation in fact-checking and protect the democratic process. See all fact briefs here.