Fee-For-Service as a Business Model of Growing Importance: The Academic Biobank Experience

Abstract

Biorepositories offer tremendous scientific value to a wide variety of customer groups (academic, commercial, industrial) in their ability to deliver a centralized, standardized service model, encompassing both biospecimen storage and related laboratory services. Generally, the scientific expertise and economies of scale that are offered in centralized, properly resourced research biobanks has yielded value that has been well-recognized by universities, pharmaceutical companies, and other sponsoring institutions. However, like many facets of the economy, biobanks have been under increasing cost pressure in recent years. This has been a particular problem in the academic arena, where direct support from grant sources (both governmental and philanthropic) typically now is more difficult to secure, or provides reduced financial support, relative to previous years. One way to address this challenge is to establish or enhance a well-defined fee-for-service model which is properly calibrated to cover operational costs while still offering competitive value to users. In this model, customers are never charged for the biospecimens themselves, but rather for the laboratory services associated with them. Good communication practices, proper assessment of value, implementation of best practices, and a sound business plan are all needed for this initiative to succeed. Here we summarize our experiences at Washington University School of Medicine in the expectation they will be useful to others.

The Biobank Economic Modeling Tool (BEMT): Online Financial Planning to Facilitate Biobank Sustainability

“…Historically, many human research biobanks were smaller biorepositories located in hospitals and academic medical centers supported by departmental funding mechanisms. 15 Many biobanks today primarily function as ''fee for service'' core facilities offering a variety of specialized services and managing collections of biospecimens ranging in the thousands to millions of samples and are located in hospitals, academic centers, institutions, corporate entities, and government agencies. [15][16][17] Start-up costs for biobanks can require millions of dollars up front to purchase equipment and supplies, build or buy informatics systems, and provide salaries for trained personnel and health care professionals.…”

“…15 Many biobanks today primarily function as ''fee for service'' core facilities offering a variety of specialized services and managing collections of biospecimens ranging in the thousands to millions of samples and are located in hospitals, academic centers, institutions, corporate entities, and government agencies. [15][16][17] Start-up costs for biobanks can require millions of dollars up front to purchase equipment and supplies, build or buy informatics systems, and provide salaries for trained personnel and health care professionals. 5 The challenge for many of these biobanks is that dedicated long-term funding is often not available, leaving biobanks largely dependent on the flow of short-term grant funding, institutional sponsorship, philanthropic donations, and/or the influx of project-related capital to fund operational costs for their biobank.…”

Trends in Biobanking Business Planning: Initial Results of a Survey of Biobankers

“…Twenty-eight out of 32 responders answered the questions about targeted and estimated actual utilization rate of 1 Medservice-Biobanking Consulting & Services, Walchwil, Switzerland. 2 Discovery Science, AstraZeneca, Cambridge, United Kingdom.…”

“…In addition, only in recent years have a few articles been published that focus on business models for biobanks. [1][2][3][4][5][6][7] A successful biobanking model(s) depends on a variety of factors, including welldefined goals, a solid business plan, and specimen collections that are developed according to strict quality and operational controls. Most experts recommend that biobanks be set up and run in a similar manner to small-and mediumsized business enterprises.…”

A Plan for Academic Biobank Solvency—Leveraging Resources and Applying Business Processes to Improve Sustainability

“…5 And even when external funding is present, a shortfall often remains. 6 Despite strong value recognition within their institutions, biobanks are unlikely to receive sufficient internal support to continue operations indefinitely.…”