The governor announced a new partnership to improve testing efficiency and capacity by opening a new lab in Valencia. 

Governor Gavin Newsom has announced a new partnership with PerkinElmer to create a lab that will double the state’s capacity of daily testing, increasing it to over 250,000 tests per day. 

This “first-of-its-kind” agreement aims to disrupt the testing marketplace, help break supply chain logjams and drive down the costs for tests for every Californian.

“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 in a statement. “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.”

The state continues to evaluate new technological breakthroughs in testing, which is why this contract includes provisions that enable the contractor to adopt new technology at a lower price point. Additionally, the state plans to leverage multiple technologies or modalities with multiple laboratory partners to ensure that we diversify our testing capabilities.

The per-test cost 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, according to Newsom’s office.

To support this contract at the lowest cost to taxpayers, the state will enter into a contract for third-party billing services to recoup costs from health insurance companies or other payers, according to the state.

The lab is scheduled to open on Nov. 1, 2020.

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