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Health companies shift focus as demand declines for COVID-19 testing

admin by admin
August 11, 2022
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Health companies shift focus as demand declines for COVID-19 testing
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When the COVID-19 pandemic started, it didn’t take long for health companies to start offering tests to people who didn’t want to wait in long lines at public health facilities.

Prices for individual PCR tests have exceeded $100 in most cases, and Calgary-based Ichor Health was one of the companies making a lot of revenue with these test sales.

The company got its start before the pandemic, but quickly swelled to opening five clinics in Alberta and installing new machines to facilitate testing.

“We had about $150,000 to $160,000 per month in overhead costs that were backed by COVID testing,” CEO Mike Kosmicas said.

But with the number of reported cases dropping across the country, along with restrictions requiring these tests, the gold rush is now in the rear-view mirror and companies like Ichor Health are trying to switch to other services in order to stay afloat.

Kosmicas said the plan was never to live off COVID-19 testing forever, but the drop in revenue was more severe than expected.

“I was stuck in a situation where I had a very high cash burn rate with much less income. So, in order to live to see another day, so to speak, we had to close everything, close the offices, expel everyone.”

Ichor is now in “hibernation,” according to Cosmicas, and hopes to be re-launched again in the future by offering molecular tests for various other diseases. As for when this will happen, the CEO is unsure, and there doesn’t seem to be much demand at the moment.

“I would say I have greatly overestimated people’s willingness to pay for preventive testing out of their pocket,” Kosmicas said.

“Not like it used to be”

Even a company whose founder described it as “disabled” for offering COVID-19 tests at a much lower-than-average price, has recently struggled. Art Agolli, CEO and founder of Equity Health Services, said his company has had to cut staff in the past few months and is now looking to use its technology in new ways.

“We diversify into other areas … DNA testing, cancer testing, things like that,” Agolli said.

Agolli said there is still a need to test travelers going to countries that require molecular testing, but that demand will likely never reach the same level it did during the height of the pandemic.

“It’s not what it used to be. A lot of it has to do with the various governments’ travel authorizations that have been removed.”

Calgary-based Ichor Health was one of several companies generating a lot of revenue through sales of COVID-19 tests. The company is now in “hibernation,” according to its CEO. (Ichor blood services)

Agoli and Kuzmickas agree that the pandemic may have helped develop testing technology so that it can now be used for other purposes. Going forward, Agolli said he hopes there will be less focus in the medical testing industry on just making profits.

“Yes we’re there to make a profit, but we’ve sensed there’s a pandemic as a healthcare company, it’s none of our business to tamper,” he said.

“These businesses don’t have to be expensive and they shouldn’t hurt the pockets of Albertans and Canadians.”

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