What does it cost to run an academic lab?

"If we knew what it was we were doing, it would not be called research, would it?"
– Albert Einstein
We have all been part of an academic lab in one way or another. Be it in grad school or in college, academic labs are where we all started out, and while some of us transitioned into the industry, others currently still belong to one. However, many of us don’t have a clear idea about how much it takes to start or run an academic lab. As a graduate student, I left that up to my professor to worry about. I had many experiments to run, and needed to make those experiments work. It was not until my postdoc days, when I was writing multiple grants to acquire funding for the lab, did I realize how much it actually costs to run an academic lab.

Jerry Maguire, TriStar Pictures.
As you can imagine, academic scientific research is a very expensive undertaking, with millions of personnel hours and money spent in an effort to improve our current understanding of science. The U.S. federal government has proposed a budget of $135.4 billion for research and development (R&D) for the fiscal year 2015. The proposed budget, however, is always under scrutiny for possible cuts to reduce overall government spending. Other countries of course have their own government support, although in general, support for academic sciences is in short supply around the world.

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So what does a new faculty member fresh out of their postdoctoral research start off with in the U.S.? Fortunately, in a major university, a new faculty member will most likely receive a start-up package from the university or the department that they recently joined. The package can be about $1.5 million for a junior faculty, and $3 million or more for a senior faculty, which is used to cover the majority of expenditures associated with the establishment of a successful lab. As the name implies, a start-up package should allow the faculty member to hit the ground running and begin collecting meaningful data that will help them to seek and obtain subsequent funding through grant submissions. This is, however, different at non-research-based universities, or research labs in a small college, where the faculty member receives a much reduced start-up package (in the range of $100,000), or does not receive one at all.

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The primary funding agencies supported by the U.S. federal government include the National Institute of Health (NIH) for biomedical research and the National Science Foundation (NSF) for all non-biomedical disciplines. Also, there are other government supported programs such as the Department of Defense (DOD), Department of Veterans Affairs (VA), and U.S. Department of Agriculture (USDA), to name a few. Other sources of funding include private and philanthropic organizations, venture capital and private industry. Although the options for funding are varied, the process of applying and obtaining funding can be quite challenging. According to the NIH, roughly one in five grant applications are funded through a competitive process. Further, it takes about nine months to a year from the time the grant is applied to the actual time that the funding begins.

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Once a lab acquires the required funding, there are 3 major components of a lab budget: 1) major equipment, 2) personnel, and 3) supplies/consumables. Major equipment can include anything from refrigerators, cell culture hoods, PCR machines and centrifuges, to very expensive state of the art microscopes and flow cytometers that can cost upwards of a few hundred thousand dollars. Obviously, the more expensive the instrument, the higher the maintenance costs. It seems as a rule of thumb the annual service contract costs between 10% and 15% of the equipment's acquisition costs.

After instrument costs, next comes personnel costs, which constitute a large majority of the budget. Typically, personnel include full or part-time laboratory technicians, graduate or undergraduate students and post-doctoral fellows. Ideally, the post-doc or graduate student should have a fellowship or be funded through teaching assistantships. If, however, the advisor has to support a graduate student through their grant money, then the costs can run more than $50,000 per year, per student, for salary, benefits and travel.
Finally, there has to be some budget allocated for lab supplies. As you can imagine, it costs money to pay for the materials used in a lab, whether it be pipette tips, ELISA kits or antibodies. The cost of these consumables could be $20,000 or more per year, with the cost depending on the number of people in the lab and the types of assays performed. Labs that work with mice incur additional charges. Just maintaining a colony of 200 mice (which is considered a small number) can cost about $55,000 per year, without taking into account any other ancillary costs.
Mr. Bean. Endemol UK.
And if that is not enough, up to 45 to 50% of every research grant received by the faculty member is retained by the university as "indirect costs“, with the range varying between universities. This money goes to the university to pay for general overhead costs and infrastructure support. This in some sense is thought to be the pay-back of the faculty member’s initial start-up package. In addition to indirect costs, the university also receives the majority of any money obtained from a patent or intellectual property that is developed by a faculty member.
So, the next time we read about a scientific discovery or a major breakthrough in the treatment for cancer, let’s remember that there was a lot of time, money and effort that went into that research. In addition, acquiring the resources and using them well required careful budget planning, good negotiation skills, wise spending decisions and good business sense. No wonder running an academic lab is commonly compared to running a business! BioLegend fully understands these challenges faced by labs all around the world, and so, to help enable research and discovery, we provide an extensive selection of antibodies and reagents at an outstanding price. In addition, BioLegend can help set up a newly started lab with our Lab Startup Discounts. If you have any comments about how your lab is managing its budget, please contact us at tech@biolegend.com.
Contributed by Mohar Chattopadhyay, PhD.
  1. Grants & Funding
  2. Sources of Funding for Biomedical Research
  3. The 2015 Budget: Science, Technology, and Innovation for Opportunity and Growth
  4. The Third Annual Laboratory Spending Trends Report
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