Newsom Announces Partnership to Double State’s Testing Capacity

Courtesy photo by fernando zhiminaicela for Pixabay 

Governors says California will not adhere to new CDC testing guidance issued Monday

Governor Gavin Newsom announced Wednesday that he signed a contract with a diagnostics company that will allow California to process up to an additional 150,000 COVID-19 diagnostic tests a day, with a contractual turnaround time of 24-48 hours. The goal is to stand up a laboratory facility and begin processing tens of thousands of additional tests by Nov. 1 and run at full capacity by ­no later than March 1, 2021.

This agreement aims to disrupt the testing marketplace, help break supply chain logjams and drive down the costs for tests. It will greatly expand California’s ability to track and prevent COVID-19 infections across the state and create additional testing capacity that will allow the state to increase testing in communities at high risk for contracting COVID-19, like essential workers, those in congregate settings and communities of color.

“California is using its market power to combat global supply chain challenges and protect Californians in the fight against COVID-19. Supply chains across the country have slowed as demand for COVID-19 tests has increased, and flu season will only exacerbate the problem,” said Newsom. “So we are building our own laboratory capabilities right here on California soil with a stable supply chain to fight the disease, lower the prices of testing for everyone and protect Californians most at risk from COVID-19.”

Under the contract — which will initially cost $100 million, with a cap at $1.4 billion — with Massachusetts-based PerkinElmer, the state will utilize polymerase chain reaction (PCR) diagnostic testing, which is considered the “gold standard” and more accurate than antigen tests. The contract also includes provisions that enable the contractor to adopt new technology at a lower price point, should advancements become available. The state also plans to diversify its testing capabilities.

The per-test cost, according to the governor’s office, would be $30.78 at 150,000 tests per day. For context, Medicare and Medicaid both reimburse at roughly $100 per test, while the average cost of a COVID-19 test ranges from $150 – $200 per test. The state will also enter into a contract for third-party billing services to recoup costs from health insurance companies or other payers.

“This is exactly what the federal government should be doing,” said the governor. “Had the federal government done this some time ago, you wouldn’t see average costs [per] test at $150 to $200 — costing the taxpayers, quite literally, tens of billions of dollars, costing employers billions and billions of dollars, costing the health plans billions of dollars as well.”

During Wednesday’s press conference, the governor also said California will disregard new guidance from the Centers for Disease Control and Prevention (CDC) issued Monday.

According to the CDC, asymptomatic individuals who have been in close contact with a person with COVID-19 for at least 15 minutes do not “necessarily need a test unless you are a vulnerable individual or your health care provider or State or local public health officials recommend you take one.” The agency also says that asymptomatic people who have not been in close contact with someone who has the virus do not need a test. Furthermore, the CDC now says, “If you are in a high COVID-19 transmission area and have attended a public or private gathering of more than 10 people (without widespread mask wearing or physical distancing), you do not necessarily need a test unless you are a vulnerable individual or your health care provider or State or local public health officials recommend you take one.” The CDC previously advised testing for everyone with a “recent known or suspected exposure.”

“I don’t agree with the new CDC guidance. Period. Full stop,” he said. “And it’s not the policy in the state of California. We will not be influenced by that change. We’re influenced by those who are experts in the field who feel very differently.”

CDC Director Robert Redfield spoke on the agency’s changes Wednesday night amid the controversy and backlash from public health officials and medical professionals. In a statement, Redfield said “Everyone who needs a COVID-19 test, can get a test. Everyone who wants a test does not necessarily need a test; the key is to engage the needed public health community in the decision with the appropriate follow-up action.”

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