How Omicron could stretch the nation’s Covid testing supply

Dec 16, 2021

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With Alice Miranda Ollstein

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Quick Fix

— Biden administration health officials are worried that Omicron could drive a doubling or tripling of demand for Covid-19 tests.

— The federal government's pandemic response drove a sharp increase in U.S. health spending last year, new data shows.

— Democrats could be forced to punt their $1.7 trillion spending bill into next year amid negotiations with Sen. Joe Manchin over his support.

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Driving the Day

HOW OMICRON COULD TEST OUR TESTING SUPPLY — The Biden administration is bracing for a bad winter — and health officials privately worry it could stretch the nation's testing stockpile to the limit.

Health officials are warning test makers and laboratories that demand for Covid-19 tests could double or even triple in the next 60 days as Omicron drives a surge in cases, POLITICO's David Lim and Adam scooped.

Those concerns are fueled by internal HHS modeling that projects the U.S. could need to conduct 3 to 5 million tests a day by February, up from the current daily level of 1.6 million.

What's driving the projected demand: The model assumes Omicron is three to five times more transmissible than Delta and that it'll become the dominant strain within four weeks. During a separate public briefing Wednesday, the administration estimated that Omicron infections are doubling every two days.

The rising caseload could prompt more people to seek out tests either to confirm an infection or for peace of mind — a prospect that's raised fresh worries about whether current manufacturing can keep pace.

An HHS official said the department is modeling for a range of scenarios and is focused on ensuring plenty of tests will be available. Yet the administration has so far declined to make the kinds of massive purchases of at-home tests that health experts and some in the industry say could make them more widely accessible.

"In order to stay ahead of future stockpiles in testing, a clear policy to stockpile tests and/or guarantee purchase of tests would help to stabilize supply and keep this industry's massive mobilization where it needs to be," said AdvaMed CEO Scott Whitaker.

Whitaker and other diagnostics industry sources are still confident they'll be able to keep pace with demand. But Biden administration officials aren't yet so sure.

"This is different than any conversations that we've had with this administration in terms of the urgency," said William Morice, president of Mayo Clinic Laboratories.

HEALTH SPENDING GROWTH DOUBLED IN 2020 — Spending on health care jumped by 9.7 percent as the pandemic took hold in 2020, more than double the prior year's growth rate and the fastest year-over-year jump in almost two decades, POLITICO's Rachael Levy reports.

The increase means that the medical system accounted for nearly one-fifth of the U.S. economy by the end of last year, as the government shelled out billions of dollars in an effort to contain the coronavirus.

The spending surge — calculated by CMS researchers — occurred while the broader economy contracted by 2.2 percent. Nearly all the health system's increase came from federal aid, such as assistance for health care providers, public health programs and Medicaid payments.

One health sector that spent less in 2020: Private insurance, which spent 3.5 percent less on medical goods and services compared to 2019. Medicare also grew at a slower pace than the prior year.

Medicaid, meanwhile, saw its biggest jump in enrollment since 2015, driving a 9.2 increase in spending.

The pandemic also shifted the nation's coverage picture. More than 2 million fewer people got insurance from work as a result of Covid-induced job cuts. In addition to the greater Medicaid enrollment, 600,000 more people picked Obamacare plans.

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In Congress

BUILD BACK LATER — Democrats' bid to pass a $1.7 trillion spending package is close to stalling out for the year over difficulties getting Sen. Joe Manchin on board with the bill, POLITICO's Burgess Everett, Alex Thompson and Jonathan Lemire report.

Manchin and President Joe Biden remain far apart on an agreement despite days of discussions. The most recent flashpoint emerged over whether to extend an expanded child tax credit.

The West Virginia senator has suggested pulling the tax credit from the bill — though he's publicly denied opposing the provision — and raised broader concerns over the package's cost and financing.

Democrats in the evenly divided Senate need Manchin's sign-off to move forward on Biden's top domestic agenda item, and have worked for months to make the bill palatable to him. Biden spoke personally with the senator Monday and Tuesday in hopes of winning his support.

But the president, along with his aides, have tired of the lengthy negotiations and may soon push Manchin to make a final decision. Even so, getting a final verdict could take until 2022.

"It's less about whether, than about when and how much," Sen. Tim Kaine (D-Va.) said.

A BYRD IN THE HAND — Even with a floor vote likely ruled out until 2022, arguments over the bill's provisions before the Senate parliamentarian will continue this week and could drag into early next week, POLITICO's Alice Miranda Ollstein reports.

"We're trying to get as much done as we possibly can," Senate Finance Chair Ron Wyden (D-Ore.) told reporters. "I hope we make headway going into the weekend."

But the so-called Byrd bath could still run into more delays because of parliamentarian Elizabeth MacDonough's ongoing cancer treatment.

Democrats expect the GOP to challenge multiple drug price provisions in the package, including a cap on out-of-pocket insulin spending and penalties for drugmakers that hike prices faster than inflation.

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Coronavirus

COVID FATIGUE IS SETTING IN — Most Americans say they're "worn out" by how Covid-19 has affected their daily lives — and nearly half would go as far as saying they're "angry" about it, according to new Monmouth University polling.

The survey found that both Republicans and Democrats are equally worn out, with more than 60 percent saying they're tiring of the pandemic-related changes to life. But while a similar proportion of Republicans are also angry about it, just about a third of Democrats share that same emotion.

Americans are also losing patience with their leaders. Fewer than half now believe Biden or his health agencies are doing a good job on the pandemic, while just 50 percent are happy with how governors are handling the crisis — down from 73 percent in May 2020.

Support for masking and distancing guidelines and proof of vaccination requirements has also declined. About 55 percent now back masking and distancing, down from 63 percent in September. Proof of vaccination requirements won 46 percent support, down from 53 percent in September.

Around the Agencies

CMS VOWS TO REIN IN PBM FEES — The agency is crafting new rules aimed at reining in payments pharmacies make to pharmacy benefit managers amid complaints that they've become exorbitant, POLITICO's Megan R. Wilson reports.

CMS chief Chiquita Brooks-LaSure told lawmakers in a letter sent Tuesday that a massive spike in direct and indirect remuneration fees over the last decade is "troubling" and the agency would use its authority to address the issue.

Congress and lobbyists for independent pharmacies have urged CMS for years to tackle the DIR fees, which PBMs who serve patients can demand from pharmacies long after those patients have picked up their prescriptions.

A CMS spokesperson wouldn't comment on potential new rules, but said the agency wants to ensure pharmacies have the financial transparency and predictability they need to remain viable.

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What We're Reading

The J.P. Morgan Healthcare Conference will be held virtually after several major biotech companies said they'd pull out of the in-person event over health and safety concerns, STAT's Damian Garde and Adam Feuerstein report.

Six months after the cruise industry restarted operations in the U.S., Omicron is poised to put its new health protocols to the test, The New York Times' Ceylan Yeginsu reports.

For Bloomberg News, Drew Armstrong, David Ingold and Paul Murray zoom in on hard-hit Kentucky to show how unvaccinated Covid-19 patients are pushing hospitals to the brink.

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