Developing a Business Plan for Your Gnotobiotics Program

Chapter 4

Developing a Business Plan for Your Gnotobiotics Program George Langan, Betty Theriault The University of Chicago, Chicago, IL, United States

Chapter Outline 1. Introduction 2. Operational Management Considerations in Establishing a Gnotobiotics Program 3. Developing a Business Model 3.1 Identifying the Users and Volume of Work 3.2 Identifying Space and Equipment Requirements 3.3 Labor—What Products and Services Will Be provided and Who Will Provide Them 4. Identifying Expenses 4.1 Consumable Supplies 4.2 Labor

335 335 337 337 339



4.3 Support Costs 4.4 Quality Control Costs 5. Establishing Fees 6. Subsidization 7. Financial Reviews 8. Summary References

345 346 346 347 347 347 348

341 342 342 344

1. INTRODUCTION With the recent rebirth in the use of gnotobiotic animals, many researchers are looking to establish gnotobiotic technology as part of their research program. Gnotobiotic animal colonies require rigorous attention to detail and strict management practices to maintain their microbial status. Because of intensity of these operations, the cost associated with maintaining these animals can be significant. Before considering the establishment of a gnotobiotic facility, an operational and business plan should be developed to assure all parties involved understand how the facility will operate and how it will be financially supported. There are many ways to operate and financially support these facilities, so one size does not fit all. This chapter will outline the financial and management issues to be considered when establishing and operating a gnotobiotic facility and will guide the reader in preparing an operational business plan for the facility. To assist with clarity, here the authors define terminology to be used within this chapter. As previously defined, gnotobiotic refers to an animal associated with flora or fauna that is fully defined to the extent of current methodologies, and germfree (axenic) is limited to a gnotobiote, which is free of all demonstrable associated forms of life (Wostmann, 1996). As the germfree animal is a subset of defined gnotobiote, the term gnotobiotic will be used in this chapter to reference both populations except where germfree animals are specifically being discussed. Additionally, the authors would like to introduce the reader to Fig. 4.1 at the end of the chapter, which will be referenced often throughout the text of the chapter.

2. OPERATIONAL MANAGEMENT CONSIDERATIONS IN ESTABLISHING A GNOTOBIOTICS PROGRAM Gnotobiotic facilities are typically managed either as a central resource or within an individual investigator laboratory. Determining the most appropriate model depends on many factors, including the specific needs of the research, what services the facility will provide, the training and expertise of staff, the potential number of users of the program, potential for staff turnover, and institutional structure and support for the program. Program size and anticipated Gnotobiotics. http://dx.doi.org/10.1016/B978-0-12-804561-9.00004-9 Copyright © 2017 Elsevier Inc. All rights reserved.

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336 Gnotobiotics

Equipment costs: (prices quoted as of 2017 and will vary with manufacturer). Flexible film isolator costs Steriliza€on cylinder and table Semi-Rigid isolator costs IVC bioexclusion rack (48 cages) Biological Safety Cabinets Autoclave (cost/unit without install)

$ 10,000 - $12,000 / isolator table (2 - 4 isolators/table) $ 2,700.00 (need 1 cylinder per 2 – 3 isolators) $ 6,000.00 - $10,000.00 ( isolator 3’ or 6’) $ 39,000.00 / ven€lated rack $ 15,000.00 – 78,000/BSC $ 100,000.00 (sufficient to hold 2-4 steriliza€on cylinders)

Labor Costs: 15– 20 isolators / technician (perform husbandry only, research techniques by others) *This will vary with the size of the isolators, complexity of the work performed, and needs of the program. 10-15 isolators / Technical services staff / (perform breeding, experimental procedures, transfers, sample collec€on.) Consumable Supply Costs: $1200-$1400/ isolator / year Example Facility: For this example, the cost to renovate and create the space is not included due to the significant variability in construc€on costs, which will be dictated by the geographic region and the area to be renovated vs newly constructed. Survey Results: • 4 main inves€gators that an€cipate maintaining 3-4 unique germfree mouse lines con€nually. They are all well established and funded in different areas of microbiome research. • They will conduct 3-4 experimental studies at a €me which will require separate isolators for these studies. Some studies are 4 weeks, others may last 8-10 weeks. Esmate of equipment to be purchased. • 8-16 isolators to use for maintaining the germfree lines. Fewer could be used if larger isolators and mul€ple lines per isolator are acceptable. Number of mice required per experimental cohort must also be considered. • 16 experimental isolators – each inves€gator will get 4 isolators for experiments Alterna€vely this could be done in an IVC rack and reduce the isolator purchases to only breeding. ▪ IVC rack $39,000 vs. 2 isolator table and cylinders s $26,700 • 1-2 back up isolators: used for emergency transfer of mice in an isolator that is problema€c • Total isolators: 34 isolators = (4 – 8 breeding isolators) 2 – 4 double level tables x $12,000/table = $48,000; 16 experimental isolators (4 isolators on a double level table) x 12,000/table = $48,000 • 1 BSC (standard BSC ~ $15,000, specialized BSC for bio-exclusion prac€ces ~ $78,000 • 1 Steriliza€on cylinders/ 3 isolators = 24 isolators/3 = 8 cylinders x $1,800 = $14,400 • 6 isolator tables x 6 steriliza€on cylinder carts (1 per table) = $900.00 x 6 = $5,400 • Isolators are not supplied with caging, so cages, wire-bars, water božles and sipper tubes will need to be factored into the equipment costs. Average wire-bar costs $25.00; cage božom $20.00; water božle and sipper tube; $20.00; total cost per cage set-up $65.00 Breeding isolator = 8 x 18 cages x $65.00 = ~ $9,360 Experimental isolator = 16 x 8 cages x $65.00 = ~$8,320 Prices are rough es€mates from 2016. They should only be used to develop a rough order of magnitude cost for ini€al planning purposes.

FIGURE 4.1  Estimated costs for establishing a gnotobiotic/germfree facility.

growth should be carefully considered in determining how the facility will be managed. Programs with one or two investigators may be efficiently managed in an individual laboratory; however, programs with multiple investigators from different laboratories often benefit from having a centralized resource group managing the facility. Centrally managed facilities also provide greater stability to the program in the event of the departure of researchers or attrition of key laboratory personnel. In a recent online survey of institutions currently maintaining gnotobiotic animals,

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approximately 44% of facilities were centrally managed, 21% were investigator managed, and 35% were a combination (Listserve, 2015). This chapter will mostly focus on developing a business model for a centralized facility; however, most of the concepts can be applied to any facility. Before considering establishing your own facility, consideration should be given to outsourcing germfree and gnotobiotic research studies. This may have significant cost benefits for very small programs or projects. The cost and knowledge needed to establish and maintain these facilities are significant regardless of scale. Obtaining germfree mice from collaborators or vendors or conducting the work at other institutions may be the most cost-efficient method to finance and conduct small or pilot research studies. Institutions should carefully consider the costs of establishing a gnotobiotic program versus outsourcing the work to a facility at another institution or a contract service resource. There are limited resources available for obtaining gnotobiotic animals, so this will need to be taken into consideration in the overall business planning. During publication of this chapter, Taconic (commercial vendor) and the University of North Carolina’s National Gnotobiotic Rodent Resource Center were the only places to purchase germfree rodents (Taconic, 2015; NGRRC, 2015). Collaborative exchanges between researchers may occur resulting in growth or demand on existing gnotobiotic programs. Additional resources for purchasing and outsourcing are likely to become available as demand continues to increase and more gnotobiotic programs develop at institutions across the country and internationally.

3. DEVELOPING A BUSINESS MODEL An initial step in the development of your business model is to identify the product and services you will provide in your facility (Baker, 2011). The business model can be all-inclusive, including husbandry and research procedures, or a model that is mostly based on provision of basic husbandry where the research staff work within the gnotobiotic facility to conduct research procedures. Alternatively, your facility planning may encompass a hybrid business model. The cost of providing different levels of service as part of your business plan should be carefully considered, especially as it may relate to the risk of breaks in sterility due to procedural mistakes. Training for working in a gnotobiotic facility is significant, and high staff turnover will lead to inefficiency and possible increased frequency of procedural mistakes. Procedural mistakes in turn can lead to contaminations, resulting in loss of time and valuable resources. Facilities that rely on personnel who are not dedicated to the facility or utilize part-time personnel (e.g., students) may find the training and experience required for these individuals to work in a gnotobiotic facility difficult to manage. When considering staffing plans, remember to consider the cost of breaks in sterility due to procedural mistakes. A risk analysis of the potential for sterility breaks with the different staffing models, and how this will affect the operational cost of the entire facility, should be carefully considered. To initiate your risk assessment, potential risks to the operation will need to be carefully considered and accurately identified and then listed. Fig. 4.2 provides an example of how an institution might set up a risk assessment for their gnotobiotic program. These risks are ranked based on their likelihood of occurring and their potential impact (impact to science, impact to program resources, and financial impact). The ranking will allow you to develop appropriate approaches to limit the impact of the concern. Mitigation of risks may involve various changes in the operational procedures, staff training, or assignment of duties to certain staff and/or supervisors/managers. The costs of the risk and the cost of the mitigation must be taken into consideration when developing costs for the facility. There are online references and tools available, which describe how to conduct a risk assessment that can be consulted beyond the brief description presented here. A good reference can be found at https://www.ready.gov/risk-assessment, which describes the basic process for conducting a risk assessment and provides links to several other references and tools. Although the information is not specific to gnotobiotic facilities, the concepts are applicable.

3.1 Identifying the Users and Volume of Work The size of the facility, and how best to manage the facility, will often be determined by the volume and type of work to be conducted. A first step in the planning process can be to conduct a survey to gage interest in the use of gnotobiotic models among the research staff. There are limitations with survey use, such as overanticipating the true demand for the service. Researchers may overestimate their use of the facility or services as it may be linked to available versus pending funding. There may also be a disconnection with the desire to use the facility and services versus the amount of money they are willing to pay. It is therefore advisable to look for ways to validate your survey results with other resources such as their current funding to support gnotobiotic research at the institution, and the level of pending funding for this type of research as an indicator of future growth. An initial estimate of the cost to do this type of work should be included in the survey if possible. Conducting gnotobiotic/germfree studies also requires an understanding of how these studies will be

338 Gnotobiotics

1. Idenfy possible risks to your business 1. Contaminaon / Breaks in sterility 2. Labor turnover 3. Equipment malfuncon e.g. autoclave or housing unit 4. Loss of ulies to the facility 2. Rank these risks by impact to the program and likelihood of occurrence. 1. Loss of power: i. Example: high impact, low likelihood: emergency generator for building is available. 2. Contaminaon break in experimental isolator: i. Example: medium impact, medium likelihood 3. Contaminaon break in germfree breeding isolator: i. Example: High impact, medium likelihood: Rederivaon available in facility; Back-up breeders maintained in a second isolator. Note: if rederivaon or back-up breeders were not available the impact would be higher 3. Develop operaonal plans and conngencies to migate those risks with the most impact and most likely to occur. 1. Contaminaon break in germfree breeding isolator: High impact, medium likelihood: i. Look at Root Cause Analysis for the break ii. Revise specific SOPs iii. Retrain staff iv. Review QA procedures 4. Determine how you will build the cost of these risks and migaon factors into your business plan. 1. Costs to consider: i. Down me from the specific risk and loss of recharge revenue ii. Cost of “clean up” i.e. rederivaon of lines or expansion of back-up breeding populaon iii. Cost of addional QA procedures 2. Likelihood consideraons: i. High and medium likelihood: build costs into the maintenance costs of the facility. ii. Low likelihood: establish conngency funds to cover the addional costs, or establish separate fees to cover costs.

FIGURE 4.2  Steps in developing risk assessment.

technically conducted as this has not been common practice at most institutions. It is therefore prudent to investigate the researcher’s ability to conduct these studies and if they have other suitable resources available. Because of the uniqueness of these facilities, looking at interest from neighboring institutions can also be considered if collaborative studies are likely to develop between institutions. Gnotobiotic/germfree facilities might not be available at each institution and may therefore be considered regional resources. In addition to identifying the potential users and volume of work to be conducted, knowledge of the specifics of the studies to be conducted is important. Knowledge of the specific animals (i.e., mouse strains) and their microbial status to be maintained will be useful in determining the number and type of the housing units to be used. Study design, study length, and anticipated frequency of studies to be conducted will also figure into the operating costs. Studies requiring frequent turnover of isolators or caging units will result in increased labor requirements in the facility to reestablish gnotobiotic housing or maintenance of large numbers of gnotobiotic caging units. The goal of identifying the number of users, and how frequently they will utilize the facility, is used to determine the number of housing units (regardless of type) that will be needed to accommodate the needs of the institution. This will be important in identifying the initial setup costs for the facility and will be used later in developing the operational costs of the facility, as the charge for the housing unit is likely how the facility will recover the operational costs of the program.

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3.2 Identifying Space and Equipment Requirements Gnotobiotic housing space is mostly an equipment-based technology (Smith et al., 2009), therefore the specific space needs are dictated by the type of equipment to be used in the facility. When establishing a gnotobiotic facility, funds need to be considered for capital investments such as renovation of space and purchase of equipment necessary for maintaining a facility (e.g., sterilization equipment and housing units). Details regarding the selection and use of the different types of housing equipment and the facility construction requirements of the different types of housing and support equipment are described in Chapters 2 and 3 of this book. Fig. 4.1 provides some ballpark estimates of the cost to purchase equipment used in a facility, which will help in developing an estimate of the costs needed to establish a facility. Most vivarium space can be readily used or converted for use by a gnotobiotic program as it is already designed for animal housing and equipped with suitable HVAC (heating ventilation & air conditioning) and utilities to support a gnotobiotic facility. However, laboratory space, such as a wet laboratory, may also be renovated to accommodate a gnotobiotic program but may require greater investment to convert the space to meet standards required for animal housing. The decision regarding which space to be used is determined by the gnotobiotic facility needs, renovation costs, and preferences of the institution. Space renovation costs will differ with the type of space being modified (vivarium vs. wet laboratory), and the construction costs, which often vary geographically. Construction that requires major changes to mechanical systems will be more significant than minor architectural changes. Information regarding how architectural versus mechanical system modifications can affect costs is described elsewhere (Smith et al., 2009). Estimation of the specific construction costs is beyond the scope of this chapter, but the reader is advised to consult a local architectural design firm or an institutional design and space planning team for estimating costs for construction of space associated with your gnotobiotic program. The planning team should have experience with animal facility design. When considering renovation of space for a gnotobiotic program, there are some items required that will need to be carefully considered in the planning and budgeting process. For instance, if the program will utilize an autoclave for sterilization of products, reliable access to an autoclave must be assured. Autoclaves also should be supplied with high-quality clean steam to decrease mineral deposit and enhance steam quality and purity. The autoclave must be regularly serviced to assure consistent operation. Inconsistent autoclave performance will be devastating to a facility. Planners should consider heat load in the facility from operation of the various equipment (i.e., biological safety cabinets, autoclaves, and housing equipment) to determine the suitability of the HVAC. Humidity control is also important to prevent high humidity levels, which may lead to condensation inside isolators, and damp filters that can increase chances of contamination. The design team should work together to determine the requirements for room dimensions and door sizes to accommodate the specific housing and support equipment. Fig. 4.3 provides dimensions of the different types of housing and support equipment used in a typical facility. Deciding in advance of construction or renovation the type and size of equipment to be used in your facility will be useful in determining the placement of the housing units in the overall floor plan, and selecting the type and number of electrical outlets to accommodate the number and type of housing units to be used. Equipment choices will further help with determining the amount of work and storage space needed. When working with flexible-film isolators, placement of electrical outlets should be carefully considered to avoid accidental puncture of the flexible film. At the authors’ institution, outlets are placed high on the wall or ceiling. Placement on the ceiling is also advantageous for powering individually ventilated cage racks. For many gnotobiotic programs, the autoclave is a fundamental component of the gnotobiotic facility, therefore sizing the autoclave to the volume of materials to be processed, at start-up and in the future, is critical. Inefficiency in sterilizing supplies can result in operational bottlenecks that drive up costs. The most common unit for housing germfree animals is the isolator. When supported by autoclaved supplies, sterilization cylinders are required for supplying the isolator. Part of your operational planning will be to determine the number of sterilization cylinder autoclave cycles needed to maintain the isolators in the facility. This number combined with the sterilization and processing time for each cycle will help in determining the size and/or number of autoclaves needed in the facility. Weighing the initial costs of purchasing a smaller or larger size autoclave(s) versus the increased costs to run more loads through a smaller unit should be carefully considered. This will affect your operational expenses mostly by increasing the labor costs needed to run more autoclave loads. Similarly, gnotobiotic facilities may rely on individually ventilated racks and sterilized cages and components for maintaining gnotobiotic animals. The methodology for processing racks and cages in your program will influence autoclave size and capacity and therefore must be considered early in the planning stages. Alternatively, use of prepackaged gamma-irradiated products may be used to maintain gnotobiotic animals. Purchase of chemical dip tanks to submerge prepackaged products to screen for leaks and packaging compromise is recommended

340 Gnotobiotics

Flexible Film Isolator:

Semi-Rigid Isolator: 33.00

66.00 96.00

Individually Ventilated Rack:

FIGURE 4.3  Typical dimensions of housing equipment to be used in a gnotobiotic/germfree facility. The sizes are estimates for planning purposes and may vary by manufacturer and model. It is critical to assure ceiling heights, doorways, and halls are of sufficient size for movement of this equipment throughout the space.

to enhance product screening before use. If high levels of chemical sterilant will be used in the operation of your program, cost of chemical waste containers and storage space for these materials will need to be considered in the space design. Additionally, consideration of which sterilants may be used to process materials in the unit must be considered in the planning stages as some chemicals such as peracetic acid require enhanced exhaust practices and must be incorporated into the facility design (Krout et. al., 2013). On the other hand, commonly used chlorine dioxide–based sterilants may not require facility design consideration, but may add to operational costs associated with chemical waste disposal and consumable personal protective equipment.

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TABLE 4.1  Gnotobiotic Housing Methods Housing Type

Advantages

Disadvantages

Flexible-film isolator

l

Simple design with enhanced cage visibility Isolator units relatively mobile l Common designs from 6 cage to 64 cage capacity l Interchangeable components l Components relatively low cost

l

l

l

Less flexible film surface area Rigid design imparts protection l Internal lighting enhances visibility when desired l Common designs from 16 to 64 cage capacity l Often designed with enhanced working (floor) space

l

Ventilated cage design Microbial status is determined at cage level l Accommodation of more individualized studies within a smaller space allocation l Facilitates small project turnover

l

Semirigid isolator

l l

Ventilated rack

l l

Less isolator protection from damage Dependent on room light for illumination l Microbial status of isolator is dependent on each animal and cage within the isolator

Relatively immobile compared with lightweight flexible film models l Requires detection equipment to identify areas of interface leakage l Microbial status of isolator is dependent on each animal and cage within the isolator

Requires manipulation of each cage within a biological safety cabinet l Each cage manipulation imparts risk of contamination l Requires cage level microbial status monitoring l Increased labor per cage

A determination will need to be made fairly early in the design process regarding the type and number of housing units to be used in the gnotobiotic facility. The advantages and disadvantages of the various types of housing units (flexible-film isolators, semirigid isolators, and ventilated racks) have been discussed elsewhere in the book and will not be discussed in detail here except for how they affect the business plan for the facility. Table 4.1 provides information regarding how these different housing units may affect your business planning. The different types of housing units will occupy varying footprints (Fig. 4.3) and hold different numbers of cages; therefore, the number of each type of unit will need to be matched with the types of studies and required cage census anticipated. It is likely that a mix of housing units may be the most efficient way to accommodate all the types of studies to be conducted (e.g., breeding colonies, short-term and long-term experiments).

3.3 Labor—What Products and Services Will Be provided and Who Will Provide Them As previously mentioned, a risk–cost analysis should include a discussion of who is best suited to work within the facility. The risks differ with the work being performed and the housing unit in which the animals are maintained. If the facility is isolator-based housing, the risk of a break in sterility significantly increases when multiple people are allowed access, or individuals with limited training and experience, have access. Breaks in sterility are very costly; including the cost of confirming the break, cost of the lost experiment, recycling the isolator, and the potential need to rederive the gnotobiotic animals if contamination occurs within a breeding isolator without backup. Similarly, maintaining gnotobiotic or germfree animals within individually ventilated cages requires rigorous adherence to proper use of a biological safety cabinet and sterile technique. Deviations in technique can result in cage contamination and experimental losses. Depending on how your program is structured, duties such as facility supervision, basic husbandry care (food, water, bedding, and cage changes), packaging and sterilizing materials, and technical procedures (compound administration, sample collection) may need to be assigned to different individuals. Training to work within a gnotobiotic facility is a lengthy process as competency in gnotobiotic procedures can often take 3–6 months to master. Allocation of staff time toward training requirements for the unit must be considered as this will add labor costs, which may not otherwise be captured by time-motion studies to be discussed later in the chapter. Not all individuals are well suited to working with gnotobiotic technologies. Individuals working within a gnotobiotic facility should have skill sets demonstrating strong attention to detail, specialized understanding of concepts of sterility and sterile technique, and advanced husbandry and technical skills.

342 Gnotobiotics

To compare costs, you will need to estimate the costs of training individuals for working in the facility at different experience levels. This can be compared with the costs of breaks in sterility of the housing unit. An estimate of the likelihood of breaks occurring with the different experience and training levels will need to be determined. Such estimates are difficult to make for start-up facilities. A starting point of such estimates can be based on tolerance levels for contaminations. For example, if tolerance for contaminations will be very low for breeding colonies and moderate for holding stock, perhaps only highly trained and skilled technicians are permitted to work with the units breeding stocks, whereas individuals with moderate training and skill level may work with holding stock. Similarly, determining tolerance levels for research study contaminations will require assessment. As an example, an individual who is still in training and gaining experience may develop skills by working with small numbers of animals on studies where resources permit ready duplication of the study in the event of contamination, whereas studies with high stakes may require the added cost of labor of highly skilled personnel. Although there is no one business model that suites everyone, it is usually best to have a dedicated group of experienced technical staff working in the isolators to conduct the routine animal care and to conduct the research procedures. Skilled and experienced staff come at a cost to the program, but their cost will likely result in better quality control and service, which can result in cost savings in the end. When first developing a program, a husbandry or laboratory manager along with a highly trained assistant may provide adequate coverage for a developing facility. We found this to be true for our centrally managed model using flexible-film isolator housing units until our isolator population reached five large (18 cage capacity) isolators and two small (8 cage capacity) isolators used for three research groups. Back then, we employed a full-time care technician and allocated partial time commitment by a senior faculty member to oversee the core’s research and technical operations. For each ∼20 additional isolators placed into use, an additional full-time staff member became needed. We found that with three full-time staff members, it was beneficial to have a staff member in a supervisory role within the facility to oversee all of the daily operations of the unit. Skill level of staff members will be determined by the services provided by the facility, the business model adapted, and the involvement of the staff in conducting experimental procedures as a fee for service in lieu of research staff members performing these tasks. Additionally, staffing levels will be influenced by how all-inclusive the business model is in supporting activities of the units’ operation versus outsourcing of tasks to other components of an animal care program. As census increases and core services expand, senior level labor costs will also have to be factored in for scientific directors and/or technical directors for centrally managed facilities.

4. IDENTIFYING EXPENSES Once a basic business model has been established for the gnotobiotic program, the facility should begin the task of identification of expenses associated with the gnotobiotic program to begin to develop its fee structure. Identification of expenses for a gnotobiotic program is similar to that described for typical animal facilities. There are many references available regarding how to budget, calculate per diems, depreciate equipment costs, and determine direct versus indirect costs (NCRR, 2000; Baker, 2011; Silverman, 2008a,b) and will not be discussed in depth in this chapter. These concepts can be used in determining the direct costs for the gnotobiotic program and how to think about allocating those costs to the appropriate cost center (NCRR, 2000) for the animal facility.

4.1 Consumable Supplies The consumable supplies will somewhat be determined by the type of equipment in use. When considering consumable supplies, it is helpful to consider supplies associated with the care of the animals, with delivering those commodities to the animals, with maintaining the housing unit itself, and with the equipment supporting all of these components utilizing consumable goods. Consumable supplies associated with the care of the animals include but may not be limited to food, water, and bedding and nesting materials. The amount of food and water consumed on average by each species of animal each day can be found in many laboratory animal reference texts. In most cases, daily care cost in a gnotobiotic facility will be impacted by institutional policy such as the frequency of required cage sanitation. Gnotobiotic facilities should work cooperatively with Institutional Animal Care and Use Committees and Institutional Biosafety Committees to establish appropriate, practical, and justifiable policies (Guide, 2011). It may be possible to establish exceptions for germfree animals for which cage changes can be less frequent than for specific pathogen-free or gnotobiotic animals. Minimizing supply changes for germfree animals will decrease risk of contamination as well as save both time and money. Based on average consumption and anticipated replacement, calculations can be made on how much food and water will be

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consumed by a cage or an isolator for a given time interval. With this information determined, cost attributed to diet may be calculated. Similarly, based on intended water supply source, water consumption, and any costs associated with water acquisition, cost of water supply may be calculated. Bedding and, where permissible, nesting materials must also be provided to the animals. The type of bedding used, the amount provided per cage, and the bedding-change interval must be determined. Nesting material and/or cage enrichment should also be considered. Based on the bedding-change frequency determined by the type of housing environment and based on programmatic considerations, costs of these materials per cage or housing unit can be determined. The housing and operation strategy decided on in developing the business plan for your gnotobiotics program will then influence costs associated with delivering consumable supplies to the animals. A program developed around the use of isolator units supplied with autoclaved goods must take into consideration consumable goods associated with the autoclave and delivery process. As an example, sterilization cylinders will require preparation with Mylar film and tape. Connection of the sterilization cylinder to the isolator will require a transfer sleeve and cold sterilant fumigation. Alternatively, a program may be developed around the use of gamma-irradiated products. Although such a program will eliminate the need for sterilization cylinders and transfer sleeve processes, the trade-off will be increased costs associated with purchase of gamma-irradiated products and potentially larger volume of cold sterilant usage for immersing or heavily spraying prepackaged goods into the isolator unit. Similarly, gnotobiotic programs utilizing ventilated cage systems may utilize some combination of autoclave sterilization and gamma-irradiated product. The type of ventilated rack system will influence how consumable products are introduced into the cage and the consumable products associated with those processes. It is likely that a program may operate more than one type of housing unit. In such cases, it may be most advantageous to calculate costs independently for each housing unit type. Each type of housing unit will have different consumable goods based on design and usage. Most of these goods have variable functional life spans making absolute cost calculations challenging. An example of this is isolator gloves. Gloves are available from different manufacturers and made of different materials. Softer materials impart the advantage of dexterity and enhanced tactile feel. Firmer materials while being more rigid often have longer periods of durability and less potential for damage and compromise. The attachment of gloves to the housing unit influences ease or difficulty in changing gloves while a unit is operational. Some may be changed with care while the unit is operational, whereas others may best be changed with full isolator recycle. Similarly, sterile gloves required to service ventilated cages dictate limited use with high consumption. Evaluating each service component needed for each housing system and the anticipated frequency of replacement is needed to establish a cost calculation. Each housing unit type and system for supplying it will have associated equipment with consumable components. Various types of housing units and equipment to supply them are covered in other chapters of this book and will not be repeated here. Of significance to this chapter is the identification of all the consumable components to be used and the frequency at which they will require replacement to determine the associated cost. Using the example of the sterilization cylinder, this piece of support equipment utilizes filter material wrapped around the cylinder to protect the products inside from contamination. The filter material must be replaced periodically. Once the periodicity of replacement is determined for the program, autoclave cylinder usage factored with the periodicity of replacement will yield the amount of filter material to be consumed (Table 4.2). Determining supply costs is most directly done by estimating the materials that will be used for the isolator, or other housing unit, for the entire year. The price of the supplies, once identified, can be readily achieved by contacting your local supplier (see Chapter 3). Understanding the volume you will need to purchase during the year may also help with getting the best price for the supplies. Each of the consumable supply costs will eventually be allocated based on its frequency of

TABLE 4.2  Consumable Supplies for Sterilization Cylinders Supply

Amount Consumed per Cylinder

Frequency of Consumption

Mylar film

“X” square inches based on cylinder diameter

Every usage

Tape (autoclave, vinyl, other)

“X” inches per cylinder based on program practices

Every usage

Sterilization indicators

Based on program practices

Every usage

D4 filter material

“X” inches length × “X” inches width based on cylinder diameter

Program-based intervals

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TABLE 4.3  Gnotobiotic Cost Accounting Small isolator Maintenance Costs Labor Animal facility overhead Microbial tesng Supply costs (isolator and sterilzaon cylinder) Sterilizaon Canister labor Feed Personal Protecve Equipment Water Bedding

Large Isolator

$x $x $x $x $x $x $x $x $x

$x $x $x $x $x $x $x $x $x

(based on me studies conducted in the facility) (likely uses the rate for the animal facility) (supplies and labor to confirm sterility ) (the allocaon of the material costs for the housing unit) (based on me studies for preparing and sterilizing the canistors) (feed costs / cage / charge frequency - likely already known for the animal facility) (costs for PPE specific for the gnotobioc facility) (water costs / cage/charge frequency) (bedding costs / cage, charge frequency - likely already known for the animal facility)

$xx/365

$xx/365

Subtotal Costs divided by 365 for a daily fee (Can also use a weekly or monthly fee depending on your business model)

$xx /avg # small isolators

$xx/avg # large isolators

Subtotal Costs divided by the average number of housing units

$x $x $x

$x $x $x

$x

$x

Subtotal: (yearly costs) Charge:

Set up/ Recycle fee Labor overhead lab

Technical Services (breeding, gavaging, etc)

$ labor rate x me worked

Rederiva­ons * this is not a complete list of costs

$x

(me to perform task x labor rate)

per cycle

(Surgical fee, supplies, maintence of rederivaon colony)

use and fee structure decided on (daily, weekly, or monthly charge; cage fee vs. isolator fee). Table 4.3 is an example of how the final expenses are collected to determine a use charge. Depending on the specifics of your program, costs can be separated into materials that are replaced as part of routinely maintaining the isolator (e.g., isolator film and shelving units) versus those that are replaced when the isolator is set up or taken down and recycled for a new study (e.g., filter material, worn gloves). By separating routine maintenance charges associated with wear and those needed with each recycle event, the studies requiring increased effort pay appropriately for the service. Costs of support supplies may be allocated as specific costs for maintaining the animals or housing unit versus those allocated to routine maintenance charges. Table 4.3 shows how this may be allocated. The cost of shipping gnotobiotic animals also differs from standard animal shipments. The most significant cost to consider is the cost of the gnotobiotic shipping containers and the increased labor to package and unpack the animals. Depending on how this service is structured at your institution will dictate how this is incorporated into your fee structure. It may be as simple as charging the increased cost of the shipping container to the order and adding the labor costs for packaging the animals for shipment.

4.2 Labor Labor is the most significant cost to the program as gnotobiotic positions are typically not entry-level positions, so personnel are likely to receive higher compensation. At the authors’ program, labor costs represent approximately 85%–90% of the cost of the facility. Assigning labor costs to the gnotobiotic program is best done by conducting time and motion studies to determine how long each process takes a person to complete. In a gnotobiotic facility, different tasks will be performed by different levels of staff, likely based on their skills and experience, therefore labor rates for the different staffing levels in the facility will need to be known. To initiate a time study, have a member from each staffing level in the facility complete a log of the time it takes them to perform specific tasks associated with caring for the facility and for the animals. Collecting information on the different tasks will allow more flexibility in determining how to establish the fee structure for the facility (i.e., isolator setup vs. general husbandry, vs. technical assistance). Examples of different tasks for time studies are given in Table 4.4. After collecting time studies from different individuals performing each of the different tasks, an average time to conduct a given task is determined. To calculate the labor costs associated with a given task the labor rate for the staff level assigned the task is multiplied by the average time documented to complete the task.

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TABLE 4.4  Example of Tasks for Time Studies Task

Time to Perform

Frequency Performed

Animal/cage health check

“x” minutes per cage

Daily

Cage change

“x” minutes per cage

Program-determined interval

Prepare sterilization cylinder with bedding materials

“x” minutes to perform per cylinder

Based on isolator housing density

Prepare sterilization cylinder with food

“x” minutes to perform per cylinder

Based on isolator housing density

Test package integrity and introduce irradiated diet

“x” minutes per bag

Based on isolator or ventilated rack housing density

Recycle 60″ × 30″ flexible film-isolator

“x” minutes for each process and “x” minutes for whole procedure

Based on experimental intervals or program-determined intervals

Rebuild and supply 18 cage semirigid isolator

“x” minutes for each process and “x” minutes for whole procedure

Based on experimental intervals or program-determined intervals

Collect samples for isolator sterility testing

“x” minutes per isolator

Program-determined intervals

Introduce materials and perform oral gavage on five animals

“x” minutes per animal, cage, or material

Service on request

Labor can be divided into the various activities that will occur in the facility such as general care and husbandry, isolator maintenance and recycling, and research or technical procedures. A determination of how these costs will be recharged can be based on what works best for the specific needs of the program and what most equitably distributes the costs to facility use. As previously described, separating the costs for tasks such as setup and recycling of the isolators may have advantages in some programs, while others may include these costs in a regular maintenance fee. Technical services may be most easily handled as a straight fee for service. Because technical services such as administration of drugs and collection of samples are often dictated by the specifics of the study, trying to incorporate this into a routine fee structure can be difficult. The level of staff that would perform these tasks are also highly skilled and experienced, therefore separating these specific duties into a fee for service will likely be the most equitable way to cover the costs of this service. Alternatively, research personnel may perform procedures directly related to experimental interventions. This will be determined by the business model decided on as well as risk assessment for potential cost savings versus potential complications with maintaining the microbial state of the animals. A technical service that will likely need to be provided is Caesarean and/or embryo transfer rederivation to create germfree lines. This is a complex technical service that will likely result in multiple types of expenses. These expenses can be charged as a single service fee or broken down as multiple charges. Expenses to consider include the long-term maintenance of a germfree colony needed to produce recipient mothers, the surgery/procedure charge (including labor time and supplies) for the rederivation, and the labor associated with coordinating the donor and recipient mothers. Additional fees to be considered with this service are the costs of maintaining the rederived animals until their sterility/health status is verified prior to distribution as well as the cost associated with the testing necessary.

4.3 Support Costs The animal facility will likely have internal support costs (NCRR, 2000) that cover such things as administration, colony health care, cage processing, and personnel supervision. The support costs for the gnotobiotic facility, however, may be unique because of the specialized nature of these facilities and should be evaluated differently from the rest of the animal facility as part of the annual cost accounting. For example, the time required to develop and maintain standard operating procedures and documentation for a gnotobiotic program may be greater than that required by other parts of the program and these costs should be taken into consideration when developing your facility expenses. Similarly, there may be fewer costs associated with cage washing compared to other parts of the animal facility; however, preventative maintenance and use of equipment such as the autoclave may be greater because of the critical nature the autoclave may have, and enhanced maintenance that may be required, to assure reliable use.

346 Gnotobiotics

1. 2. 3. 4. 5. 6.

Aerobic and Anaerobic Cultures Fecal 16sRNA PCR Biological indicator use with steriliza
on loads Chemical indicator use with steriliza
on loads Microbial tes
ng of gamma irradiated products Sen
nel Health tes
ng of colonies

FIGURE 4.4  Quality control testing for gnotobiotic isolators.

4.4 Quality Control Costs Assuring that gnotobiotic and germfree animals maintain their health status requires additional quality control steps than in a typical facility. These methods are discussed elsewhere in this book. The costs associated with these quality control procedures, however, need to be included in the costs of maintaining the facility. Fig. 4.4 lists the types of quality control testing that may be used so it can be incorporated into the cost of maintaining the facility. The costs may differ with the type of housing unit and how the housing units are being used (i.e., breeding isolators or cages vs. experimental isolators or cages). Similarly, the costs will vary depending on the unit performing the tests. If conducted by the gnotobiotic facility personnel, time studies and consumable supplies for each test will need to be considered. Alternatively, if the tests will be outsourced to an external laboratory, sample preparation time, delivery expenses, and test fees will need to be determined. Some of these quality control costs can be directly allocated to the use of the housing unit and others may be allocated to support costs for the facility depending on how the institution performs the cost accounting.

5. ESTABLISHING FEES When creating your business model, the plan must meet the federal requirements established in the National Institutes of Health Cost Analysis and Rate Setting Manual (NCRR, 2000) and Code of Federal Regulations (OMB Circular A-21) if these are applicable to your program. There are several approaches to how rate setting can be performed and the gnotobiotic facility will likely follow the institutions general approach. Some institutions have established a committee to help review and set fees, whereas in other facilities these rates are set by facility administration. A simplified approach to setting rates involves taking all the expenses for the current year divided by 365 to get a per-day expense. Be sure to exclude any services in which a fee for service is charged. Divide that number by the average number of units (e.g., cages) per day, which will give you a per-day rate. This will give you a daily costs for the general care of the unit (Silverman, 2008b). A careful look at the operational aspects of the facility along with the expenses of the facility will likely reveal the most appropriate way to charge for animal care and services in the gnotobiotic facility. The more detailed and specific your expense tracking is to the specific cost centers, the easier it will be adjusted how the fees will be charged (James, 2001). For facilities that are not yet operational, projections developed through assessment of expenses discussed in the previous sections may be applied. Consumable supplies, labor, support costs, and quality control costs can guide initial fees. Record keeping and documentation of all of these cost areas will allow for frequent reassessment and fee adjustments. Facilities experiencing significant and steady growth may benefit from these frequent assessments as cost centers will fluctuate as a by-product of facility scale and usage. It may be most efficient, depending on the type of studies and the operational plans of the facility, to consider charging by a unit different from the cage if isolator housing will be utilized. Much of the work in maintaining gnotobiotic animals involves maintaining the isolator and therefore charging for the isolator per week or per day may simplify the fee structure for the facility compared to charging per cage. For facilities using multiple types of housing units (e.g., ventilated cage and different size isolators), a fee structure for each housing unit may be best. A review of the operations and expense information for the facility may also reveal other areas in which a modification of the fee structure will result in fees that are more equitable. If a large amount of labor and supply costs are being dedicated to certain aspect of maintaining the facility, but not all users of the facility equally need that service at the same frequency, it may be best to establish a separate charge for that service. An example of such as service would be the breakdown and recycling of an isolator after an experiment. Depending on the type of research being conducted, studies may be relatively short term and require isolator recycling more frequently than others do. If such is the case, the expenses for this service could be charged separately than the standard maintenance fee. A service fee system is another option for recovering costs in a gnotobiotic facility. There is a large amount of technical work performed in these facilities, but volume may differ with the specific research projects. By instituting a fee for service for some aspects of the program, cost recovery can be more specifically designed to the specific needs of each of

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the different type of research being conducted. Examples of services in which a fee could be charged include animal procedures provided by experienced gnotobiotic animal technicians, training of investigators for specific types of facility use, or quality assurance testing (e.g., increased frequency requested for a particular study over program-established frequency). Technician fees can either be charged by the specific service or based on the time spent performing the service. When service fees are charged as part of the cost recovery system, make sure they have not been included in the standard “per diem” fees for the animal.

6. SUBSIDIZATION Institutions subsidize their animal programs for various reasons. This could be based on the programs strategic importance, or to make the rates paid by investigator more affordable. This is true for gnotobiotic programs as well. Given the recent rebirth in the use of gnotobiotic animals in research studies, financial support for new investigators for these studies may be limited. Providing initial financial support for the program could allow new researchers interested in this area of investigation to use the facility and gain preliminary data for future grant submission. Initial subsidization is also a means to allow a new facility to become established and become more financially stable. Subsidization may also be used as a way to decrease the amount charged to investigators, while maintaining more control over the facility. For instance, the use of highly skilled and experienced gnotobiotic technicians in the facility will likely increase the cost of operation of the facility. However, the use of more experienced and trained individuals can have significant benefits through fewer mistakes or breaks in sterility. An institution could make a strategic decision to offset some of the costs for investigators by subsidizing the facility in an effort to provide a higher quality program. Gnotobiotic facilities may also be regional resources that have external users from other institutions. If the institution is providing a subsidy to the program, it should consider setting external rates that are higher than the internal rates to take into account the subsidy and any other internal expenses not covered by the internal rates.

7. FINANCIAL REVIEWS As the gnotobiotic program grows and becomes more efficient, financial reviews of the program should occur annually as the budget is established for the animal facility. Many of the factors that went into developing your initial business plan and budget should be reviewed based on the previous year to determine if additional expenses and savings need to be considered. During this review, a look at the risk analysis previously used should be reviewed to determine if there are any new risks to consider, or if some change in procedures or work in the facility may be decreasing risks to the facility. An understanding of the future year’s census should also be reviewed in an attempt to determine how much growth or decrease in use the facility will experience. Any growth will likely affect your labor and will need to be considered for the next year. Equipment and supplies may also need to increase to accommodate the facility growth. Finally, a determination of the rates the facility will charge in the next year will need to be determined so that the facility can balance its budget. Long-range forecasting can be very beneficial. Attempting to establish a 5-year outlook for the facility will help in making long-term strategic plans. The farther you get from the current year, the less accurate the business plan numbers become because of unanticipated changes in facility usage or expenses. This long-range outlook, however, when updated each year, will help to plan for investments in the program and can be used to give facility users an anticipated rate schedule for future years so these costs can be better accommodated in future grant submissions. The 5-year plan should focus on the most significant cost drivers for the budget. These are typically labor, equipment investments, and laboratory costs associated with maintaining quality assurance of the germfree isolators. A yearly inflationary increase can be added to each year of the plan to assist with predicting the future year’s expenses. The 5-year plan also eases the process of creating an annual budget as the major components of the plan have already been estimated.

8. SUMMARY Developing a business plan for your gnotobiotic program will at first be perceived as a daunting task. The effort necessary in developing a business plan unique to your program, though challenging and requiring a significant time investment, will provide many benefits. Because of the labor intensity of operating a gnotobiotic program, the costs associated with setup and maintenance of a germfree and gnotobiotic animals can be significant. Fig. 4.1 provides some insight into these costs. Similarly, materials and equipment to support the gnotobiotic program will likely be unique from any other aspects of existing operations. Before considering the establishment of a gnotobiotic facility, an operational and business plan should be developed to assure all parties understand how the facility will operate

348 Gnotobiotics

and how it will be financially supported. At the outset, determining the size and scope of the program will assist in structuring the optimal program design and operation that is specific to your needs. Determining management structure such as centrally managed, investigator laboratory managed, a collaboration and outsourcing approach or some combination of these models will set the framework for space, equipment, and labor considerations. It will also permit assessment of a planning strategy either for developing a comprehensive program based on anticipated needs or developing a program that is designed on incremental growth or phase in. These factors will provide the basic outline for the facility design and business plan development. Once size, scope, and general management plans are outlined, strategies for facility operation will need to be determined. Operational plans require risk assessments based on products and services to be provided and the individuals identified to provide them. Risk tolerance thresholds influence operational management decisions and costs. A careful understanding of risk tolerance for each product and service in your facility will inform operational plans that will also inform fee structure. Similarly, the general management plan will assist with initial determinations on housing, equipment, and support needs. Involvement of the user group or an oversight committee will be important so that those that will be involved in the program clearly understand how the facility will be set up and managed and what the expectations are for cost recovery and institutional support. Integral to any business plan is an understanding of its revenue and expenses. Expenses fall into the categories of consumable supplies, labor, overhead, support costs, and costs associated with quality control. With careful analysis of all aspects of your gnotobiotic program all associated expenses can be identified, itemized, and used to establish fee structures. When establishing your gnotobiotic fee structure, careful consideration of federal requirements or other rate setting guidelines must be considered. Such guidelines allow for several approaches to how rate setting may be performed. Determining daily fees based on overall program costs for a year and tailoring fees to differential usage are two approaches that have been described. In preparing your fee structure, an understanding of the level of subsidization the facility will receive needs to be known. The final step is to assure that your expenses are being covered by your revenue from your fees plus any other forms of financial support provided to the facility. This should be reviewed at least annually. Each gnotobiotic program will be unique. Program scope, design, services, region, institution, staffing, equipment, and operations will factor into the program’s unique design, operation, and management. Consideration of all of the components of your gnotobiotic program will allow for the development of a business plan. The information provided in this chapter is expected to lay a foundation on which to structure a business plan, consider its operational plan, and formulate an operational budget. All programs whether just being envisioned or having been long established can benefit from periodic evaluation and reassessment. The approach to program assessment as detailed in this chapter should assist the reader in this process.

REFERENCES Baker, D.G., 2011. A user-friendly approach to cost accounting in laboratory animal facilities. Lab. Anim. (N.Y.) 40, 277–286. Code of Federal Regulations, Chapter II, Part 220-Cost Principles for Educational Institutions (OMB Circular A-21) [On-line] Available: https://www. gpo.gov/fdsys/pkg/CFR-2012-title2-vol1/pdf/CFR-2012-title2-vol1-part220.pdf. Guide for the Care and Use of Laboratory Animals, 2011. National Research Council, eighth ed. The National Academies Press. James, A.A., 2001. Fiscal Management. Management of Laboratory Animal Care and Use Programs. CRC Press. Krout, J., et al., December 2013. Eradication of Bacillius licheniformis Contamination While Maintaining Employee Safety in a Gnotobiotic Mouse Colony. LAS Pro. Listserve, G. 12/2/15 2015. Gnotobiotics List Krout, J. National Gnotobiotics Association Results. NCRR, 2000. Cost Analysis and Rate Setting Manual for Animal Research Facilities. NGRRC, 2015. National Gnotobiotic Rodent Resource Center [Online]. Available: https://www.med.unc.edu/ngrrc. Silverman, J., 2008a. Managing Financial Resources. Managing the Laboratory Animal Facility, Second Edition. CRC Press. Silverman, J., 2008b. Setting Per Diem Rates. Managing the Laboratory Animal Facility, second ed. CRC Press. Smith, L.W., Orndorff, C., Lehner, N.D.M., 2009. Chapter 8-cost. In: Lehner, J.R.H.D.M. (Ed.), Planning and Designing Research Animal Facilities. Academic Press, London. Taconic, 2015. Genetically Engineered Rodent Models | Precision Research Models. [Online]. Available: http://www.taconic.com/. Wostmann, B.S., 1996. Germfree and Gnotobiotic Animal Models. Background and Applications. CRC Press.