Lab Manager | Run Your Lab Like a Business
A $100 bill and a handful of colorful pills on a blue background

Corralling the Costs of R&D

How unmasking asset utilization unlocks ROI

by Elemental Machines
Register for free to listen to this article
Listen with Speechify

by Robert Pemberton, Chief Commercial Officer, Elemental Machines

The graph climbs steeper than a black diamond ski slope. Since 1970, the cost of developing a drug in the United States has swelled at a clip reminiscent of the headline-grabbing growth of home prices, inflation, or college education. If the investment required to bring a new drug to market astounded onlookers in the 1970s at $179 million, today’s $2.6 billion price tag is almost incomprehensible in magnitude.

Get training in Making Data-driven Decisions and earn CEUs.One of over 25 IACET-accredited courses in the Academy.
Making Data-driven Decisions Course

The skyrocketing cost of drugs is widely familiar. It’s the frequent fodder of presidential debates, the dreaded topic of kitchen table conversations, and the origin of countless pharmacy check stand sighs. More easily understood figures—like a $2.1 million individual treatment—generate headlines around the world, while the costly research processes that cause them generate little action.

Behind the indifference is an absence of correlation. For too long, links between costs and results and asset management and savings have largely eluded scientists. As long as aggregate revenues exceed aggregate costs, process optimization is ignored and the status quo is maintained.

But now, lab technologies are making it possible to identify actionable links between the lab operations and overall return on investment (ROI). The elusive path to lowering the cost of prescription drugs may finally have an opening.


If the concept of a 10-figure budget reeks of waste, the aroma is accurate. Roughly $28 billion in R&D investment is wasted each year. According to PLOS, a full 50 percent of annual preclinical research spend results in irreproducible research. The culprits behind such costly irreproducibility are four-fold. Biological reagents and reference materials top the list at 26.1percent, followed by study design at 27.6 percent, data analysis and reporting at 25.5 percent, and laboratory protocols at 10.8 percent.

In many ways, such “waste” is an understood by-product of experimentation. Thomas Edison’s “ten thousand ways not to make a lightbulb” were undoubtedly costly lessons. But among the righteous casualties of experimentation are less righteous ones: archaic assets that go unused, square footage that squanders rent without furthering discovery, and other wasteful habits enabled by the status quo.

Only now has sensor technology evolved to the point that real-time utilization data can emanate from any asset in a lab, offering new intel on old practices and uncovering a trove of potential savings for labs of every variety.


A single lab can contain scientific assets from dozens of manufacturers purchased throughout decades of operation. Much of the equipment on the market today features integrated cloud-connectivity solutions. But a lab’s assets are unique in their endurance; a freezer purchased years before internet of things (IoT) technology was viable isn’t necessarily ripe for replacement

Until recently, the IoT sensors required to track utilization have required costly replacement of otherwise flawless equipment. But emerging turnkey sensor technology is empowering LabOps pros to draw real-time and historical utilization data from a range of assets with the mere attachment of a non-invasive sensor.

One such sensor, recently unveiled by LabOps data pioneer Elemental Machines, clips to the power cord of any powered object to monitor the flow of electrical current within. The device, named Element U, transmits the data to the cloud, where machine learning compares the data to patterns surfaced by the thousands of assets connected to the company’s system. Artificial intelligence separates signal from noise to present key stakeholders with actionable intel that informs operations throughout the organization. That intel has proven profitable.


For two words short on letters, on and off sure wield a lot of power. By establishing a historical record of asset utilization, LabOps leaders are armed with indisputable data both anticipated and not.

Comprehensive utilization data can confirm suspicions about equipment that gets too little use, or overused assets in need of reinforcement. The former can have lucrative implications for lab budgets. Afterall, the true cost of an unused asset is more than its sunk purchase price, power consumption, or underlying square footage (though lab space ranks among the most expensive square footage in real estate). The covert costs of needless equipment are many. Service plans and warranties covering underutilized equipment produce recurring bills that often go unnoticed and unquestioned.

When a leading pharmaceutical manufacturer monitored utilization of just 20 assets in a single lab for 30 days on the Elemental Machines platform, the asset decommissioning, warranty cancelation, and service plan adjustments shaped by the insights totaled$40,000 in savings.

If such savings sound significant alone, consider the implications for a pharmaceutical giant with hundreds of labs and tens of thousands of assets. A leading drugmaker could stand to save upwards of$100 million dollars without changing the operations or equipment its researchers use, but rather by merely decommissioning those they don’t.

The potential ripple effects of nine-figure savings on an organization's operations are wide; the impact of lab-wide asset utilization monitoring, momentous. Thanks to rapidly advancing IoT technology, R&D waste can finally be identified, ROI can be optimized, and perhaps, just perhaps, the prices of prescription drugs can be curtailed.



To learn more, visit: