Private laboratories in Nigeria raked in at least N26 billion from running COVID-19 Polymerase Chain Reaction (PCR) tests on international travellers across the country in the last two years, according to official data.
BusinessDay analysis of testing data from the Nigeria Centre for Disease Control (NCDC) shows that the mandatory requirement for travellers to undertake PCR tests, hours before boarding and after arrival, led to a bubble that boosted the testing operations of most laboratories.
Laboratories with multiple centres across the country made the most of the bubble, with the top five amassing over N8.6 billion in revenue.
Only private labs were assigned to undertake testing for travel purposes as the Federal Government raced to ramp up testing capacity in 2020, leaving government-run labs to attend to domestic needs alone.
Medbury Medical Services earned over N2.7 billion from 60,034 PCR tests between October 2020 and the second week of March 2022, making it the highest earner.
The revenue is calculated by multiplying the total number of tests run by the average cost of test in Lagos and Abuja: N44,950.
54Gene emerged the second-highest earner with over N2.4 billion raked in from 52,479 tests in Abuja, Lagos, Ogun and Kano within the same period.
Clina-Lancet Laboratories made more than N1.4 billion from 31,869 tests across multiple states, making it the third-highest earner.
Everight Diagnostics made over N1.1 billion from 24,967 tests to become the fourth-highest earner, while DNA Labs, an indigenous biotechnology company, emerged the fifth-highest earner, raking in slightly over N1 billion from 23,984 tests.
The top five earners generated the most revenue between December 2021 and January 2022, a period considered the peak of travel season.
But all of that bubble began to burst as countries began to scrap PCR tests from their travel restrictions, replacing it with proof of full vaccination.
On April 4, Nigeria joined a growing list of countries that have scrapped the test from travel protocol, bringing to an end the revenue from compulsory tests bookings by travellers coming into the country.
After two years of COVID crisis and travel restrictions, countries including Sweden, Denmark, Ireland, the United Kingdom, Norway, Israel, and Malaysia are gearing up to return to normalcy, scrapping most of COVID-related restrictions to ease travel.
It’s an answered plea of thousands of Nigerians who were forced to incur additional expenses on tests that increased the cost of travel.
Laboratories had already begun to feel the impact of the scrapping over the last two months that countries such as the UK and Saudi Arabia, among others, started.
Jude Uzonwanne, interim chief executive officer, 7RiverLabs, owned by 54Gene, in an emailed response to BusinessDay, said a combination of a decrease in the rate of international travel and scrapping of tests by more countries had led to a slight decline in the demand for COVID-19 PCR test.
He expects to see further decline in demand as the implementation of the Federal Government’s scrapping takes full effect.
He, however, expressed optimism that rapid tests (which are cheaper) will remain relevant as adoption scales up globally for quick and immediate testing.
Uzonwanne said, “We have experienced a slight change in demand for two major reasons. First, the travel peak season, November to January, has ended, and fewer people are going in and out of the country. Second, a change in COVID-19 protocols by various governments around the world has led to the removal of negative PCR tests as a travel requirement for fully vaccinated travellers.
“However, we continue to receive requests for COVID-19 tests from walk-in and corporate clients, as well as unvaccinated travellers.”
Apart from the hope of the testing market being sustained by unvaccinated travellers and cooperate clients, the laboratory is banking on its other specialised tests as well as other range of tests across histopathology, microbiology, hematology, clinical chemistry and molecular genetics.
BusinessDay reached out to Medbury, the highest earner, but no response had been received as of the time of filing this report.
While some analysts expect laboratories would have to focus more on other aspects of their testing operations, some believe that other molecular tests are incapable of generating the volume of demand that a pandemic like COVID-19 would.
“The honeymoon is over. It means testing will only be limited to people who are sick and require the tests. It also means they will now have to use the capacity of the laboratories to do other tests that require PCR capability,” Debo Ogunlana, founder of Doctoora, a platform that rents out medical equipment to practitioners, said, stressing the need for the labs to diversify their revenue sources. (BusinessDay)
