The bouquet of Covid-19 tests that most diagnostic labs are offering include antibody tests (blood tests), rapid antigen tests (point of care tests that detect the presence of an antigen from a nasal or throat swab in case of SARS-CoV-2), and reverse transcription-polymerase chain reaction (RT-PCR) tests.
Diagnostic chains are pinning hopes on a bouquet of Covid tests as a steady stream of revenue, and not just for the coming quarters.
Non-Covid revenues, these laboratories (labs) claimed, are back to 80 per cent of January levels.
“Covid-19 tests are already part of our 500-tests portfolio,” said A Velumani, promoter, chairman and managing director (MD), Thyrocare Technologies.
The chain saw revenue from wellness-related tests decline in the first quarter.
Analysts felt only sickness-related testing was likely to see steady demand.
The bouquet of Covid-19 tests that most diagnostic labs are offering include antibody tests (blood tests), rapid antigen tests (point of care tests that detect the presence of an antigen from a nasal or throat swab in case of SARS-CoV-2), and reverse transcription-polymerase chain reaction (RT-PCR) tests.
The prices of RT-PCR tests, a molecular diagnostic test, has come down significantly.
Most labs now offer the test for Rs 2,000-2,500.
Antibody tests, which detect the presence of Covid-19 antibodies in a blood sample, come for Rs 900-1,500.
The owner of a Delhi-based lab chain pointed out that antibody tests are high-margin tests for labs, as the kits used for testing are rather inexpensive.
“If the kit costs Rs 150-200, the tests cost nothing less than Rs 900.
"However, with volumes picking up, costs may come down to Rs 500 or so per test. Even then margins would be decent,” he said.
Analysts seem to agree.
Edelweiss analysts noted in a recent note on Dr Lal PathLabs that antibody testing is likely to become a bigger opportunity.
It is likely to become a part of preventive check-ups.
“While medically these tests may not fight the battle, they have great psychological value,” an analyst observed.
SRL Diagnostics’ chief executive officer Anand K noted that people often go for preventive check-ups once they notice they have come in close proximity to a Covid-positive person.
“As their risk profiles in the Aarogya Setu app increases, they opt for tests to check if they had been exposed or if they have relevant antibodies,” said Anand.
Anand also felt that with a high number of daily case additions, the demand for Covid testing is likely to remain high.
“Earlier if contact tracing ratio was 1:10 or 10 people for every one Covid-positive, now with the unlocking in progress, it is almost 1:50 or 50 people per positive person.
"The ambit of contact tracing-related testing, too, is likely to see a jump, with daily additions now around 80,000 cases,” Anand said.
Edelweiss noted after Fortis Healthcare’s (the parent company of SRL Diagnostics) first quarter results, SRL is now seeing larger opportunity in Covid-19 testing than earlier envisaged.
It is expanding Covid-19 testing facilities to Bengaluru, Hyderabad, Chennai, and other places, and also adding testing facilities for antigen and antibody testing.
Covid-19 revenues contribute 30 per cent to diagnostic revenues, even as volume contribution is around 10-15 per cent.
Velumani said: “If a vaccine comes, antibody tests would remain in demand.
"If a drug comes, the demand for RT-PCR would remain stable.”
As such, the volume of RT-PCR testing has come down, noted most labs, with the government picking up most of the tab.
While Covid-19 testing is now a part of the labs’ portfolio, firms point out that there will be cannibalisation between tests, too.
Ameera Shah, MD of Metropolis Healthcare, said new tests (like saliva-based and strip-based tests) are likely to come up, as more research happens in this area.
“Going forward, there would be cannibalisation among these tests, too. Covid-19 tests bouquet is here to stay.
"Corporate, too, have expressed demand for these tests as they slowly call their workforce back to office,” said Shah.
Some firms like SRL have started to offer customised packages for corporates - periodic antibody or antigen tests of groups on a rotation basis, and if the medical officer feels someone was exposed (has symptoms or history), then RT-PCR tests for those.
Harsh Mahajan, founder and MD of Mahajan Imaging, said: “Antibody or antigen tests have no scientific value.
"Antibody tests are only good for serosurveillance. Antigen tests throw up a high number of false negatives. The gold standard is RT-PCR testing.”
Non-Covid testing is also picking up.
While Shah noted that the demand revival is different across different cities, depending on prescription generation, chains like Thyrocare and SRL pointed out that they were back to 80 per cent of January levels.
Velumani, in fact, expected that by Diwali (November), the demand would be 1.2-times pre-Covid levels.
