Why are PCR machines and biotech equipment in general so expensive

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Ujjwal Thaakar

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Apr 21, 2017, 7:57:52 AM4/21/17
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How do the economics work out and why have we not seen bigger companies bring down the process in the advent of open source equipment as well as new startups building low-cost equipment?

Gerald Trost

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Apr 21, 2017, 8:42:04 AM4/21/17
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this is only my honest opinion from my experience:

I bought a open source 3d printer - in industry they had
such things for 3 decades - but they costed
several hundred thousands

the open source thing works fine but for 90% of the time
its in maintenance and I am the machine engineer

I think the open source things are not yet reliable enough.
 
Sent: Friday, April 21, 2017 at 1:57 PM
From: "Ujjwal Thaakar" <ujjwal...@gmail.com>
To: DIYbio <diy...@googlegroups.com>
Subject: [DIYbio] Why are PCR machines and biotech equipment in general so expensive
How do the economics work out and why have we not seen bigger companies bring down the process in the advent of open source equipment as well as new startups building low-cost equipment?

 

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Dennis Oleksyuk

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Apr 21, 2017, 11:48:46 AM4/21/17
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Because building hardware is harder than building software. It requires more skills, time, and money. That's the main reason which applies to hardware development as a whole.

Because the number of customers who buy scientific equipment is small. Therefore the manufacturer has to divide the development cost between a smaller number of customers.

Because the cost of consumables and labor for solving a particular problem is usually higher than the cost of the machine. Therefore the buyers are more interested in saving in labor and consumable cost rather than hardware prices.


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Nathan McCorkle

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Apr 21, 2017, 2:29:36 PM4/21/17
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I agree with the previous folks. In simplest terms it comes down to
the economics 'law' of supply and demand.

Take a piece of hardware like a smartphone. There is so much quality
control that you probably don't think about, it is insanely expensive
and time consuming. Who hasn't experienced their smartphone doing
something dumb or buggy? While it annoys phone users, it usually isn't
a major loss of money. In science that could ruin an experiment (which
are often very very expensive), so end-users are a lot more cautious
and willing to pay for products that are as bug-free as possible. This
also means that less well-tested products will have a harder time
gaining market share, scientists are less swayed by flashy marketing
(less, not completely immune) than the average hardware consumer
because, well just look at all the people being scammed left and right
with TV infomercial products, kickstarters, etc.
-Nathan

John Griessen

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Apr 21, 2017, 8:36:18 PM4/21/17
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On 04/21/2017 10:47 AM, Dennis Oleksyuk wrote:
> Because the cost of consumables and labor for solving a particular problem is usually higher than the cost of the machine.
> Therefore the buyers are more interested in saving in labor and consumable cost

This is one place where some equipment suppliers are going slower than I think they ought to. It's where I
aim my new developments -- how to do something that has been done before with less labor and more
automated steps. I think most lab gear companies are not adapting as quickly as they should with all the nice
hardware development tools we have now. I'm working on shoestring low budget stuff, but if some of it hits, there will be no
trouble affording better plastic molds to attract some of the customers who demand flashy looks. Most lab customers will be
buying because of automation tie ins and saving steps in processes more than the housing it comes in.

To come up with time saving steps that have not been done before is not easy and that's a reason the
equipment costs -- to pay for the "not easy" design steps. Established companies have a lot of designed "looks"
to keep up and that could be making them hold back on introducing new designs as quickly as they could.
The plastic molds for those "looks" are very expensive, so that is a hurdle to action.

I'm going to be trying out designing/buying 3D printed molds to use to make product, and the molds won't be up to snuff for
cell phone types of products, only maybe forgivable as ways to get housings for scientist tools to test
low volume equipment ideas. Another way to get a product out is to carve housings out of plastic
instead of molding anything -- plastic molds can take a lot of time, cost a ton, weigh a ton.
The culture shock electroporator project will have carved then molded housings as it progresses.
The molds will be light weight aluminum things that won't last for volume production, just to get started
and be able to change and adapt.

PCR machines with vials are definitely needing lots of molding tech, so the above expense reasons fit them.
--
John Griessen

Mega [Andreas Stuermer]

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Apr 22, 2017, 2:11:07 AM4/22/17
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Demand and supply. Everybody of 8 billion humans wants a smartphone and there is enourmous competition and pressure to make it as cheap as possible.

Way less demand for thermocyclers, so less companies building them. Then theres the grant system so it's not the researchers personal money and nobody says "are you stupid? I'm not gonna pay you 5000$ for a heat block and a peltier" and builds his own

Mega [Andreas Stuermer]

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Apr 22, 2017, 2:11:56 AM4/22/17
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Ah, Nathan beat me to it ;)

Ujjwal Thaakar

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Apr 22, 2017, 3:01:47 AM4/22/17
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Completely agree with Nathan and others. A year back I was hoping the biohacking community would grow rapidly leading to an increased demand of low cost equipment but looking at OpenPCR and MiniPCR amongst others it clearly doesn't seem to be the case. It doesn't appear these companies are growing at a rapid pace. How do you guys see the growth of individuals who demand low cost equipment?
On Sat, Apr 22, 2017 at 11:42 AM Mega [Andreas Stuermer] <masters...@gmail.com> wrote:
Ah, Nathan beat me to it ;)

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Ujjwal Thaakar

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John Griessen

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Apr 22, 2017, 11:21:44 AM4/22/17
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On 04/22/2017 02:01 AM, Ujjwal Thaakar wrote:
> How do you guys see the growth of individuals who demand low cost equipment?

Probably paltry at best for the next 2 years. Who knows after that?

Best to focus on real innovation rather than "cost down" only tactics in product development.
I had a more optimistic attitude about hacker/buyer numbers and growth back
when kickstarter was fairly new and a project called makerbeam launched. Makerbeam
is smaller than usual scale struts, fasteners and brackets to assemble any prototype with.
The person doing that eventually sold it as a going business to someone in
Europe because it didn't pay his silicon valley rent.
His value add was simply batch production with standard aluminum extrusion methods,
then selling to distributors or direct, so not a ton of innovation there. Most
end user customers want more than generic parts, they want a function. It helps to
target sales to more than builders, makers, hobbyists, engineers. Everyone else
wants an "easy button" of some kind.

I'd look to the growth of individuals who demand up to the minute tech in their
lab gear -- innovation relative to the classical ways, and price in a middle ground between cheap
and "the usual" price.

And like Mega says, "> Then theres the grant system so it's not the researchers personal money and nobody says "are you stupid?
I'm not gonna pay you 5000$ for a heat block and a peltier" and builds his own"

This phenomenon of, 'nobody says "are you stupid?"', is another version of herd mentality in scientists
similar to stock market old fashioned wisdom as in, "Nobody's going to call you stupid for buying IBM."
That translates to needing some marketing BS, industrial designed housings and market share to get some of the sales
of niche market equipment like lab gear. A book called Crossing the Chasm details this product life cycle stage.
But there's still little bits of sales possible to scientists
who don't think with the herd. Be sure to sell them an "easy button" though.

Gerald Trost

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Apr 22, 2017, 2:56:11 PM4/22/17
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Hi all!

Andreas, did you build your own thermocycler ?
I only ask because I wonder how many of us have successfully tried it.

In my chest there beat 2 hearts:

one says
"I am DIY enthusiast, I want to be able to do anything on
my own - at least I want to have the know-how"
 
the other heart says:
"I tried to build so many things and always did I end up
as machine engineer and problem solver"

I have seen OpenPCR and many similar projects on youtube
and I still think these are too expensive.

I dont think the peltier and the heat block are enough -
I suspect that rapid cooling and distributing heat
evenly might be the major issues.

Once I find the time I will bend a thin copper pipe to rings
in order to take up the reaction tubes and let some cooling
liquid run through these pipes in order to heat and to cool.
(Arduino drives peltier and a pump ...)

Maybe I am off topic because I am not really that
familiar with lab technology, if so, please let me know.

The basic idea of my design will be to spread heat and
the cooling evenly - as good as possible.

if somebody is intersted then please, suggest a
discussion forum where DIY-builders can discuss
the "Easy LiquidThermoCycler"

Gerald





 
 
Sent: Saturday, April 22, 2017 at 8:11 AM
From: "Mega [Andreas Stuermer]" <masters...@gmail.com>
To: DIYbio <diy...@googlegroups.com>
Subject: Re: [DIYbio] Why are PCR machines and biotech equipment in general so expensive
Demand and supply. Everybody of 8 billion humans wants a smartphone and there is enourmous competition and pressure to make it as cheap as possible.

Way less demand for thermocyclers, so less companies building them. Then theres the grant system so it's not the researchers personal money and nobody says "are you stupid? I'm not gonna pay you 5000$ for a heat block and a peltier" and builds his own

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Ujjwal Thaakar

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Apr 22, 2017, 3:39:34 PM4/22/17
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Anyone here has an example of how results differ on different PCR machines? Like how much and on what parameter because so many researchers have told me that they don't want to disturb their setup!

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Josh Perfetto

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Apr 23, 2017, 4:17:45 AM4/23/17
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Dennis said it perfectly on all 3 counts.

Ujjwal I thought you were going to develop lower cost PCR. What has stopped your efforts from succeeding?

-Josh


-Josh

On Fri, Apr 21, 2017 at 8:47 AM, Dennis Oleksyuk <den...@oleksyuk.me> wrote:
Because building hardware is harder than building software. It requires more skills, time, and money. That's the main reason which applies to hardware development as a whole.

Because the number of customers who buy scientific equipment is small. Therefore the manufacturer has to divide the development cost between a smaller number of customers.

Because the cost of consumables and labor for solving a particular problem is usually higher than the cost of the machine. Therefore the buyers are more interested in saving in labor and consumable cost rather than hardware prices.

On Fri, Apr 21, 2017 at 8:42 AM Gerald Trost <gerald...@mail.com> wrote:

this is only my honest opinion from my experience:

I bought a open source 3d printer - in industry they had
such things for 3 decades - but they costed
several hundred thousands

the open source thing works fine but for 90% of the time
its in maintenance and I am the machine engineer

I think the open source things are not yet reliable enough.
 
Sent: Friday, April 21, 2017 at 1:57 PM
From: "Ujjwal Thaakar" <ujjwal...@gmail.com>
To: DIYbio <diy...@googlegroups.com>
Subject: [DIYbio] Why are PCR machines and biotech equipment in general so expensive
How do the economics work out and why have we not seen bigger companies bring down the process in the advent of open source equipment as well as new startups building low-cost equipment?

 

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Ujjwal Thaakar

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Apr 28, 2017, 7:56:06 AM4/28/17
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Hi Josh,
I spent most of the last year learning to make hardware and have a prototype ready. It's not great and market ready yet. Turns out I highly underestimated what it takes to build a product.

Now I'm trying to figure out the business opportunity. What has been your experience at Chai as the original pioneer of low-cost PCR? What has the market response been like and what difficulties have you faced. A lot of people on this forum including me talk about developing open source low-cost equipment but what reality are we missing that you have experienced since you are one of the handfuls to have actually built a successful company out of this.

On Sun, Apr 23, 2017 at 1:47 PM Josh Perfetto <jo...@snowrise.com> wrote:
Dennis said it perfectly on all 3 counts.

Ujjwal I thought you were going to develop lower cost PCR. What has stopped your efforts from succeeding?

-Josh


-Josh

On Fri, Apr 21, 2017 at 8:47 AM, Dennis Oleksyuk <den...@oleksyuk.me> wrote:
Because building hardware is harder than building software. It requires more skills, time, and money. That's the main reason which applies to hardware development as a whole.

Because the number of customers who buy scientific equipment is small. Therefore the manufacturer has to divide the development cost between a smaller number of customers.

Because the cost of consumables and labor for solving a particular problem is usually higher than the cost of the machine. Therefore the buyers are more interested in saving in labor and consumable cost rather than hardware prices.

On Fri, Apr 21, 2017 at 8:42 AM Gerald Trost <gerald...@mail.com> wrote:

this is only my honest opinion from my experience:

I bought a open source 3d printer - in industry they had
such things for 3 decades - but they costed
several hundred thousands

the open source thing works fine but for 90% of the time
its in maintenance and I am the machine engineer

I think the open source things are not yet reliable enough.
 
Sent: Friday, April 21, 2017 at 1:57 PM
From: "Ujjwal Thaakar" <ujjwal...@gmail.com>
To: DIYbio <diy...@googlegroups.com>
Subject: [DIYbio] Why are PCR machines and biotech equipment in general so expensive
How do the economics work out and why have we not seen bigger companies bring down the process in the advent of open source equipment as well as new startups building low-cost equipment?

 

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Dennis Oleksyuk

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Apr 28, 2017, 10:07:00 AM4/28/17
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Hi Ujjwal,

To figure out the business opportunity you need to ask real custom about their needs or, even better, become your own customer. I suggest you find a molecular biology lab and go do some experiments there. Order some gene, PCR it into the plasmid, put it into the bacteria, and somehow quantify its effect.

In my personal opinion, the only value in developing yet another version of PCR is educational. 

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John Griessen

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Apr 28, 2017, 11:06:23 AM4/28/17
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On 04/28/2017 06:55 AM, Ujjwal Thaakar wrote:
> Now I'm trying to figure out the business opportunity.

Evil Mad Science Labs is a good example of the business opportunity involved.
the education buyers are very important, and the volumes are low.
Any new innovation that meshes well with lab automation could be more of a hit.

Costs such as safety testing and certification are required as well as
molded parts tooling costs above the 1000's/year volume.

Ujjwal Thaakar

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Apr 28, 2017, 12:56:34 PM4/28/17
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In my personal opinion, the only value in developing yet another version of PCR is educational. 
You mean to say only educational institutes would buy? What about existing researchers, diagnostic labs and biohackers. 

Regarding your other suggestion, I actually started because I wanted a machine of my own. I have performed PCR a couple of times.

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Josh Perfetto

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Apr 29, 2017, 1:55:23 AM4/29/17
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Hi Ujjwal,

Well congratulations on persevering on your project over the past year!

I think there is a common mistake some people on this forum make, which is concentrating on the BOM cost. They make this mistake because coming from a DIY background, their vast amounts of personal time are unaccounted for, and the only costs they see are material costs. But that is not how a business runs.

Here's what those people don't see. Consider a popular video game sold over the Internet. It might be sold for $50. The actual cost to transmit the game might be pennies, which is the closest equivalent to BOM costs. The rest of that $50 goes to fixed development costs, transactional costs, marketing, distribution costs (resellers), customer support, and hopefully a small amount of profit.

Hardware is just like the video game, except that in addition to all those costs, the BOM/COGS cost is very significant as well.

Rarely have I heard someone object to the $50 video game price because it only costs pennies to transmit. But once hardware is involved, some people become infatuated with the BOM costs, neglecting all the other costs. This is a big mistake in general, but doubly so in biotech, where the volumes are small compared to a video game, but fixed development costs equally large, so those fixed costs have to be spread across a smaller number of units. This is why biotech equipment in general is so expensive.

OpenPCR was never intended to be a business. It was a personal project between me and a friend, and initially we didn't even intend to sell kits but just release an open source design. Honestly it was started before I understood the above, and being a software person at the time, I also didn't understand the R&D effort required. The project stemmed from a conversation during a long car trip. I think at the time I thought it would be a 2 week project, and it ended up consuming 1.5 years of my life :) I learned a lot, but OpenPCR was never about making money.

Chai is different. We've raised millions from Silicon Valley investors. The concept behind Chai is not to make low cost equipment, but to expand molecular diagnostics to valuable industrial applications. Doing that necessitated making things easier and cheaper. Honestly our devices are priced out of the reach of most biohackerspaces, but we're focussed on continuing to reduce the costs of molecular diagnostics to expand the market size. Eventually this technology will be affordable even to consumers.

-Josh


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Josh Perfetto
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Chai
3206 Scott Blvd | Santa Clara, CA 95054

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Ujjwal Thaakar

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Ravasz

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Apr 29, 2017, 8:20:18 AM4/29/17
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I just wanted to elaborate on this statement here:


"
In my personal opinion, the only value in developing yet another version of PCR is educational. 
You mean to say only educational institutes would buy? What about existing researchers, diagnostic labs and biohackers. 
"

When I asked around my academic workplace for old, free equipment that we could donate to our local community lab, I immediately got offered 2 functioning PCR machines. I turned them down because the community lab had 5(!) already, and in reality only actually needed one. It turns out for academic institutions, PCR machines are cheap already and new ones are bought every now and then from leftover grant money just to replace the older units in case they ever fail.

A perfectly good, new, branded PCR machine costs $1000-2000. Compare that to the cost of standard lab consumables which are like $100 for a 1 day experiment for 1 researcher, or to the cost of a simple mass spectrometer, DNA sequencer or fluorescence microscope which are easily above $100K each.

Working for years to bring down the cost a new open source PCR machine from $1000 to $800 is great, but it won't really affect academic labs and biotech companies. They will buy the same $2000 branded PCR machine anyway as for them it costs peanuts, and they realize that reliability is everything: if your branded machine is reliable 98% of the time and your open source machine only 95%, they you will easily recover the cost of the branded PCR machine in no time due to the cost saved by having to repeat less experiments.

So the only gain from developing a new PCR machine is really the learning experience you get, so the educational opportunity as said above. You cannot base a business model on it.

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