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The Biden administration has signed a $137 million contract with a pharmaceutical company for the purpose of building a factory for COVID-19 test strip materials, a White House official confirmed to FOX Business on Wednesday.
But the new facility will not start churning out the materials for three years, according to the company. If the timeline is correct, the deal will not alleviate the administration’s scramble to make more tests available in the near future amid a lack of supply for Americans. The administration is under fire for reportedly rejecting a deal in October that would have strongly ramped up the supply of COVID tests.
U.S. President Joe Biden addresses the 76th Session of the U.N. General Assembly on September 21, 2021 at U.N. headquarters in New York City. ((Photo by Timothy A. Clary-Pool/Getty Images) / Getty Images)
The three-year timeline also signals that the administration expects the need for tens of millions of such tests per month into 2024 or 2025 and beyond.
Reuters first reported that the White House inked the agreement with MilliporeSigma, a subsidiary of German firm Merck KGaA, not be confused with U.S. company Merck & Co.
“The money will allow the company over three years to build a new facility to produce nitrocellulose membranes, the paper that displays test results, in Sheboygan, Wisconsin,” the outlet reported. “That, in turn, will allow for 85 million more tests to be produced per month, the official said.”
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The Department of Defense issued a press release stating that it had awarded the contract in coordination with the Department of Health and Human Services, and that it was funded through the American Rescue Plan Act.
The DOD also said that the “industrial base expansion effort will allow MilliporeSigma to establish a nitrocellulose manufacturing capability in its Sheboygan, Wisconsin facility,” suggesting an existing factory might be converted to produce the test strip materials.
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In its own release, MilliporeSigma stated that it “been awarded a $136.7M USD contract award for the construction of a lateral flow membrane production facility over a three-year period at the company’s Sheboygan, Wisconsin site.”
The DOD press release does not mention the three-year timeline.
HHS did not immediately respond to FOX Business’ request for confirmation on the timeline for when MilliporeSigma’s production is expected to be up and running.