Purchasing Second-Hand Pharmaceutical and Biotech Equipment
Problem: Whether due to mergers and acquisitions, lab downsizing, upgrading or outsourcing, many pharmaceutical and biotech companies—large and small—are opting to sell R&D or manufacturing equipment no longer needed in their own labs. This presents a great opportunity for other institutions to obtain late-model, quality equipment at a reduced cost, direct from the working lab. While purchasing second-hand equipment can be a cost effective and socially acceptable way to go, there are potential pitfalls buyers should look out for including: unreliable sellers, equipment contamination, hidden fees, and unverified purchasing channels.
Expect to save 30-50 percent on general lab equipment that is less than three years old; expect up to an 80 percent savings on lab equipment that is more than five years old.Solution: By implementing a few best practices, interested buyers of used biopharma equipment can navigate the secondary market successfully and ensure a streamlined purchasing process.
Buying from a credible source and knowing the condition of the assets are two extremely important rules to go by. Because the equipment is typically sold ‘as is’ with no refunds, make sure what you are buying has come straight from the working lab environment of a reputable institution. If possible, you should plan to inspect the equipment in person. In some cases the seller will schedule a preview period for potential buyers to come out and look at the item(s). If an in-person preview is not offered or not possible, plan to validate the equipment based on the written description, images and video provided via the sales platform. Keep in mind: all credible secondary market sellers will provide this type of marketing collateral as well as transparency when it comes to the sales terms and conditions.
Another important thing to consider is whether the device meets the specs you require. In most cases you can still get by with an older generation model but make sure the technology of the device is in line with what you need. For example, a generation 3000 mass spectrometer can work just as well as a generation 4000 model, depending on your specific needs.
It’s important to be familiar with the different types of platforms in which to purchase used equipment via the secondary market. The most common channels nowadays are competitive online auctions and private treaty sales. The type of equipment you are purchasing and the type of sales channel you are purchasing it through have a direct effect on the anticipated savings:
- If purchasing via a private treaty sale, expect a 40-60 percent savings off original acquisition value
- If purchasing via an online auction, expect a 30-80 percent saving depending on how old the item is and the original acquisition value
Finally be sure to factor in removal and shipping costs for everything you plan to purchase. A good rule of thumb: the larger the product, the more expensive it will be to transport.
Additionally, keep in mind that sometimes rooms are built around devices so you may have to knock through an exit wall to remove the equipment (ex: a nuclear magnetic resonance (NMR) spectrometer or a big chemical dryer mixer); and don’t forget the installation costs at your facility.
Between lower acquisition costs, reduced installation time, ease of purchase and the breadth of quality product, buying used equipment with its bottom line benefits has never been easier to justify and will continue to be a staple in the pharmaceutical and biotech space.
For more information, visit http://www.liquidityservicesinc.com/ , or Liquidity Services’ online marketplace www.go-dove.com/events To learn more about how Liquidity Services can help manage your surplus assets, please contact sell@liquidityservicesinc.com.