The Economic Future of Guinea Pigging

The idea for this posts stems from a conversation with my father during intersession. Just briefly, our discussion landed on the topic of economics – and how many fast food companies were doing well in spite of the recession. Guinea pigging is considered an easier, less demanding alternative to minimum wage jobs. Given this parallel, I wondered how contract research organizations (CROs) were faring in our current economic situation. Did the lack of jobs create a larger pool of willing low-wage test subjects, allowing for easier and cheaper testing? Or did the economic decline affect CROs as dramatically as other companies?

To get a general sense, I examined stock prices over the past two years for the CROs mentioned in the NYT article “Guinea Pigging” (Covance, Parexel, PPD), as well as a few other well-known companies (Charles River, MDS Pharma). The trends observed were almost identical: steady growth over the past two years with a steep decline starting late 2008. Most companies’ stocks dropped to well under half their early-2008 prices. It is clear that CROs have not benefitted from the recession.

The impact this will have on the future of Guinea Pigging is uncertain; however, it is unlikely to be a favorable change. Given the financial situation of CROs, conditions during testing are likely to deteriorate. Furthermore, wages are likely to decrease as well, leading to greater activity, and thus risk, among professional guinea-pigs. Furthermore, with jobs continuing to be lost, more and more people may rely on guinea pigging for supplemental wages. The dangers of Guinea Pigging seem even greater than before.

Stock prices taken from http://finance.yahoo.com/