Drug Testing News| Press Release

April, 2007

Phamatech earns prison deal
Phamatech, the San Diego-based manufacturer of rapid medical diagnostic devices, was recently awarded a major multi-million-dollar contract to provide drug tests for the Federal Bureau of Prisons.

Until now, such tests were provided on an average of once a year. Under the new program, tests can be administered monthly and, thus, expected to go a long way to bring drug problems in the system under control.
"Done infrequently, prisoners can find ways to beat the system. But done once a week and once a month, you can't hide," said Tuan Pham, founder of Phamatech and its president and CEO.
Pham's company bid on the desirable federal government contract amid serious competition from some of the large players in the pharmaceutical and drug testing field. The Quick Screen contract is for $1.5 to $2 million per year for up to five years and assigns the company 180 prisons serving 250,000 federal prisoners, in all.
"When we did our forecast at the beginning of the year, we didn't expect it," said Pham.

The lucrative half-billion-dollar drug testing market is dominated by a handful of large pharmaceutical companies, which makes the award even sweeter for the fast-growing company, which opened its doors in 1991 and has since grown to occupy a 50,000-square-foot warehouse, storage and laboratory space at 10151 Barnes Canyon Rd. in Sorrento Valley, a stone's throw from QUALCOMM.
"It gives the company credibility," Pham said. "We can look at other businesses in drug and rehabilitation testing. We can approach other government agencies that deal with drug testing and this contract gives us the credibility."
Phamatech is known for its array of devices that are used to test for pregnancies, drugs, hepatitis B and C, AIDS and cancer markers – all of which could be administered in the home. The tests can also be found on the shelves of doctors' offices and in chain stores such as Walgreen's, Rite Aid, Albertson's, Eckerd's and Long's; 40,000 pharmacies carry Phamatech products. In all, one million tests per month are assembled and mailed to individuals, companies and agencies.
The Quick Screen devices will be used to test for methamphetamines, amphetamines, marijuana, cocaine and opiate use. Results can be verified in five minutes.

Under the old system, tests were administered and sent to outside laboratories for results. The average cost per prisoner was between $15 and $20 a test. Now results will be obtained on the spot within five minutes and at half the previous cost, which translates to a considerable savings in time and money. Pham said the prison system will have the option to test more often because of the lower cost or retain its schedule and keep the money as saving.
Dr. Michael Nichols, chairman of the Chaplain Occupational Classification for the State of California, said that since 1983 drugs have been an inherent problem in the prison system in the state, and he was witnessed little change.
"Drugs are being brought in (to the prisons)," Nichols explained. "And that is not being addressed."
He explained that containment and control are top priorities in the prison system. Current overcrowding in the prisons leaves little time for follow through, he said.
However, according to Pham, ready-made tests may alleviate some of these problems.
Using the quick test system has a corollary cost-effective benefit. that could tackle overcrowding in the prison system.
Parolees are often tested once after being released. Now, the same parolees can be called in to be tested randomly. If they remain clean, they remain outside the system instead of being returned to prison and adding more cost to prison upkeep.