Are analyses expensive?

I recently talked to a former colleagues working for a bigger pharma company who asked me how much we charged for an XRD analysis. When she got the answer she said: “Wauw – it is expensive!” As the time was not for economic discussions, I just politely smiled and said “Oh, you really think so?” I guess that this is a general thought for many employees in the pharma-laboratories: We have the instrument – I can go in the lab and run the experiment – and it will approximately take me 15 minutes – it is easy and fast, and should definitely not be very expensive.

Of course you cannot expect everybody to be trained in setting up business cases, but still some insight into the overall economics might be valuable. How much did the instrument cost? How much are the expenses for service? How many years do you expect the instrument to run before it “retires”? How much does it cost to run the whole laboratory ? How much time do you use for maintenance? How much are you paid each month? Do you work efficiently all the time? How many samples are analysed on the instrument? What are the necessary expenses for “non-laboratory-related” activities (canteen etc)?

Many people become quite surprised when they find out how much the price for “a simple analysis” actually is – even when it is done by “themselves”.

Working for a CRO, it is part of the job setting up these business cases – and of course an investment has to give certain expected revenue. Sometimes it is quite an eye-opener for the pharma companies to make detailed business cases – and comparing them to the price that a CRO would have charged for the analyses – even though the prices at first sight seemed “high”.