Quest Diagnostics Inc. sees a growing direct-to-consumer testing opportunity following the Covid-19 pandemic, as patients seek greater control of their health care and the crisis accelerates a shift to digital technologies.
Direct-to-consumer testing for medical needs like colorectal cancer and others could bring in $250 million in revenue for Quest by 2025 in a total market worth about $2 billion, the company said at its investor day on Thursday.
The emphasis on direct-to-consumer testing represents a shift for Quest, which traditionally sells its screenings through hospitals, doctors offices and some 2,200 Quest-run patient service centers. In the last year, Quest and other laboratories saw increasing demand for coronavirus tests that could be accessed more easily, including via swabs collected at home and mailed in for processing.
Photographer: David Paul Morris/Bloomberg
The pandemic was a catalyst that will accelerate the opportunity in front of us in all direct-to-consumer testing, Chief Executive Officer Steve Rusckowski said on Thursday.
The segment could cannibalize some of Quests existing business but will also pose an opportunity for expansion, according to Chief Financial Officer Mark Guinan. A surge in Covid-19 testing catapulted Quest to about $3 billion in revenue in the fourth quarter, a more than 50% gain from the year-earlier period.
Most importantly, if we dont move to where the market is going and where our consumers, patients want it to go, then were going to fall behind, Guinan said. And if we move more quickly and we have a better offering, then well have a chance to gain share.
Presentations at the investor day billed Quest, one of the major U.S. processors of Covid-19 tests, as poised for growth in a post-pandemic world.
Seeking to allay concerns about a drop in lucrative virus testing, executives highlighted new opportunities for broader health-insurance plan contracting, consolidation with smaller laboratories and selling genetic-sequencing tests, following an acquisition of
Blueprint Genetics last year.
Vaccine Rollouts Cloud Covid-19 Testing Industry Outlook
Quest already has name recognition among consumers and has expanded its direct-to-consumer testing, increasing the number of tests available and seeking to improve the consumer experience, said Cathy Doherty, senior vice president of clinical franchise solutions.
Health-insurance plans began covering testing that was sought out by consumers directly during the Covid-19 crisis, a trend that if it continues could make for a larger market, she said. While testing for Covid could decline as the U.S. vaccination campaign plays out, theres going to be a continued need for it, particularly in the near term at schools, company officials said.
Additional growth will come this year from an expanded offering of testing done via kits shipped to a customers door, like a colorectal cancer screening, she said. Quest is also developing flexible payment options and large partnerships for another distribution channel, Doherty said.
These changes reflect that we believe consumer is broader than patient. Patient implies a doctors order. Consumer implies both that plus customers that come to us directly, said Jim Davis, executive vice president, general diagnostics. Quest aims to capitalize on that opportunity to serve customers directly.
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