Here is exactly why timing is everything....
As the VP of Procurement and in my first year with Veloxity, I look back and 2008 seems so long ago now. Back then Pharma and CROs closed their wallets to new capital investment as the financial crisis dug in. In the LC-MS/MS marketplace, orders dried up, budgets were on hold, spending was scrutinized, and every potential deal was a highly competitive and combative internally and externally. Interest in leasing LC-MS/MS systems took on a new level of interest. Renting versus owning offered plenty of flexibility and a lower cost of usage. Used LC-MS/MS regained traction as pharma and CROs began to blend new and refurbished in order to extend their budgets, and the markets began to recover.
From back then to 2020, LC-MS/MS demand went through the roof, buoyed in part by high reimbursements in the confirmatory role of LC-MS/MS in tackling the Opioid problem in the US. Every doctor, clinic and hospital testing patients were attracted to LC-MS/MS as an investment opportunity with high sample throughput and high reimbursements. The conservative labs pursued used LC-MS/MS solutions for a lower cost entry point into the testing market and were able to better sustain themselves as re-imbursements continually declined. More progressive labs seeking fast growth and profits, invested heavily in new LC-MS/MS and ultimately many suffered closures and layoffs when the reimbursements shrank.
The LC-MS/MS capital marketplace has always been a series of lows and highs. The 2020 flatlined. The pandemic put orders for LC-MS/MS on hold. It was difficult to process orders, difficult to ship, and difficult to install and service with lockdown. The global LC-MS/MS market shut down. In 2021, as vaccines restored confidence in people and work gradually resumed – business took off again. A backlog of orders, staff shortages, supply chain issues, and inflation are keeping current prices up. High-end used LC-MS/MS are harder to acquire, new LC-MS/MS are on much longer lead times with supply chain issues, and so the availability of LC-MS/MS systems becomes unpredictable.
At Veloxity Labs, the answer is to plan better. We work with a trusted asset management partner and continue to take consultation and guidance on new versus refurbished, pricing, timing, financing, market conditions, and we have a unique 80% capacity strategy that drives our instrument needs with plenty of lead-time thus avoiding expensive last-minute buying. Just as importantly, we became educated, and we learned how to help vendors help us. We work with them towards the same goal, which mirrors the relationship and partnership approach we enjoy with our CRO clients. This mode of operation gives our clients flexibility and the responsiveness they require for drug development. Visit our website at www.veloxitylabs.com to discuss your bioanalytical project.
Martin Steel, VP of Procurement