US life science R&D costs have been increasing year over year, with a 40% increase in R&D expenditures since 2018. In the coming year, a critical shortage of qualified and experienced researchers, increases in oil and utility costs, and the possibility of supply disruptions will put continued pressure on the market, further increasing expenditures. While these factors are outside of an organization’s control, there are still ways to reduce other types of spend, such as lab supplies, in times of rising prices. We will explore five strategies for biopharma and pharma organizations to substantially reduce lab supply spending, creating opportunities to allocate resources to other critical areas.

Five ways to save money on lab supply purchasing

1. Bulk purchasing. Many types of lab supplies can be purchased in larger-than-usual quantities to take advantage of economies of scale, such as glassware, consumables, chemicals, media, and buffers. Purchasing in bulk can allow labs to receive better per-unit pricing and lower ordering-related labor costs. However, bulk purchasing also results in increased storage costs and higher upfront costs that tie up cash flow, as well as increased obsolescence, waste, and supplier dependance risks.
2. Group purchasing organizations (GPOs). GPOs negotiate discounts on behalf of multiple labs or organizations, utilizing collective purchasing power to get lower prices. A good option for startups and smaller labs, GPOs also have drawbacks that may offset savings, such as membership fees, a limited supplier pool, and unfavorable contract terms. The unique requirements of the R&D space, such as the need for niche product specificity, make GPOs a complicated choice.
3. Government contracts. Certain labs may be eligible to purchase supplies through government contracts at discounted prices, which can be helpful for labs with limited cash flow. Like many bureaucratic processes, however, the procurement process can be time-consuming and dependent on government funding cycles. Supplier options may be limited and purchasing may be subject to strict compliance requirements.
4. Promotions and discounts. Labs can capitalize on occasional promotions, discounts, and special offers extended by suppliers. If possible, labs can attempt to time certain purchases strategically in order to achieve cost savings. Labs associated with educational or academic institutions may be eligible for educational supplier discounts. Purchasing lower-priced generic product alternatives can be cost-effective, as long as specs and quality standards are met. Additionally, it can be possible to negotiate more favorable terms with suppliers to receive discounted or free shipping based on order volume or frequency. There are many ways to seek promotions and discounts, but this approach can be very time-intensive and still not make a sizeable dent in lab supply spend.
5. Lab supply marketplaces. Lab supply marketplaces arose from the need to address the pain points experienced by the life sciences industry in a way that both reduces spend and labor costs. Purchasers can build a single cart from millions of different SKUs from thousands of vetted suppliers and receive one consolidated invoice per month. Access to centralized, real-time, self-service ordering, tracking, and receiving information increases efficiency and reduces redundant, routine tasks. Utilizing a lab supply marketplace, such as ZAGENO, fosters cost-effectiveness by providing access to a diverse range of suppliers who compete according to price and quality.

A strategic lab supply procurement process can help to alleviate some of the pressure wrought by steadily rising life sciences R&D costs. By reducing the labor associated with adding suppliers to their purchasing systems, labs can save upwards of hundreds of thousands or even millions of dollars per year. Lab supply savings can be used to offset other cost increases, playing a major role in what matters most — bringing products to market that serve the greater good. Contact ZAGENO today to learn how to transform your lab supply purchasing strategy.