Demand Management: A New Look at Procurement of Animal Models

The research model and services (RMS) is the most crucial segment of preclinical trials, as it helps in determining the safety and efficacy of a new drug. The market for RMS is consolidated with the top 5 service providers having ~80% of the market. The market is entirely driven by the regulatory mandate for animal testing, thus, service providers like Charles River Laboratories, Taconic Farms, Harlan, Marshall, dictate the price of research models in all geographies. The procurement of RMS has not brought in cost savings in the recent past, as the supplier power is very high and the services virtually irreplaceable. This whitepaper is targeted to address the looming issues faced by category managers for research animals in pharmaceutical, cosmetics, agrochemical as well as chemical industries, through management of demand like Use of alternates Refining the test procedures Replace the traditional models with new research models Procurement of animal models must move from transactional to strategic engagements, as it brings in cost savings with assured supply of animal models. Further, management of the demand through adoption of newer technologies, refinement of the process, reduces the animals required. This also helps in fail early fail cheap options that reduce the overall cost of development of drugs. Animal research has been a rite of passage for developing new drugs to treat humans. The practice has an established history from 3BC. Today, animal based testing is carried out by a variety of industries, ranging from research labs in Pharmaceutical, cosmetics to chemical and agrochemical testing. Animal models preferred for research are rodents, dogs, cats, primates. The regulatory authorities like FDA, EMA, and REACH mandate the drugs/chemicals that are intended for human use, must be tested on animals. These tests are aimed largely at understanding the toxicity, immunogenicity and efficacy of the drugs, chemicals or cosmetics upon administration on animals. However, animal models cannot predict toxicology completely in human beings. This can be attributed to the variance of concordance of the two species (humans and animals), in genome, age, dosage patterns, immune response, etc. Recent recall of Omontys (erythropoietic agent) due to severe anaphylactic reactions serves a tragic example of lack of predictability of animal testing. Fialuridine (nucleoside analogue) trial by NIH and TGN1412 (immunomodulary drug) trial by Tegenero Therapeutics present strong cases, wherein toxic reactions in humans were not identified during animal testing. Despite the mandate, regulatory authorities agree that animal testing can predict about 40-45% toxicities that might occur in humans. Procurement of animal models in recent past has not ushered in significant cost efficiencies from supply market. The suppliers through mergers and acquisitions have achieved considerable market share across different geographies in specialized capabilities as well as capacities. This in turn led to market consolidation, wherein, top 5 service providers have garnered 80% of the market. Hence, they dictate the price, leaving the buyers with very little power for negotiation owing to criticality of the segment. Yet another challenge in procurement of animal models is disruptions resulting from the animal rights extremist activities, which target the transit of animals from supplier to buyers. These disruptions also portray a negative image of animal testing.