Biology research is expensive. Experiments may require specialized equipment, high-grade purity reagents, and trained scientists to do the work. An entire ecosystem has sprung up to support the commercialization of biological reagents. Two (unnamed) companies currently reign as the go-to vendors for purchasing materials required for everything from protein purifications to tissue dissociations. Like any industry, the giants in this space have solidified their stance by dominating smaller players, oftentimes absorbing them into their marketplace. In this way, many of these large vendors follow an Amazon-like business model. It is not uncommon, for example, for a product developed by a small manufacturer to be sold to scientists through these larger vendors.
With consolidation of vendors can often come predatory pricing. While it is true that biology often requires highly quality, specialty reagents, this is not always the case. By looking into a few examples, we can begin to see the full extent of product markup from biology reagent providers. Take, for example, powdered milk – a common material used as a blocking reagent in western blots that prevents non-specific protein binding. 500 grams of powdered milk from a popular science vendor costs ~$49, while an equivalent amount from a popular grocery provider costs only ~$16, representing a 3X price increase. A recent article took this comparison further. In their study, they calculated the cost of baking a homemade batch of cookies using only scientific vendor purchased materials. In this rough analysis, they concluded that a single batch of 30 cookies could cost up to $30,031 in materials.
While these comparisons may seem humorous, they have big implications for the cost of doing science and the pace of innovation. New biotech startups are constantly aware of the cost of their experiments. As the investment market fluctuates, biotechs routinely feel increased pressure to optimize their experiments and minimize research costs. It is true that many biological reagents may warrant high prices. However, these comparisons make it clear that many materials are being sold at markups that would not be tolerated in the public sector.
Large academic institutions feel the weight of this price markup as well. However, these institutions are often able to negotiate discounts with science vendors that can substantially reduce their costs. By contrast, similar negotiations are often not available to smaller biotechs.
While there is certainly a larger debate to be had about the cost of research and the tracing of cash flow intended to fuel biological innovation, we leave our biotech readers with one possible suggestion to help mitigate research costs. As we’ve written about recently, contract research organizations (CROs) can be a great way for small companies to carry out initial experiments. In deciding to outsource work with a CRO, cost of materials should be a necessary consideration for small biotechs. As CROs often specialize in a few areas of expertise, they are likely able to purchase biological reagents in bulk, saving costs that can be passed on to biotech clients.