State agency spent millions on failed biospecimen program it hopes to revive

Everything changed for Brent Gendleman in 2003.

That’s when the businessman uprooted his life in Washington, D.C., to make the trek west to Arizona and run 5am Solutions, a software company that focuses on medical and research applications.

Just one year earlier, Arizona’s business and scientific leaders came together to create the Bioscience Roadmap, a plan to make the state into a hub of medical research and technology.

Gendleman saw an opportunity to use his expertise to cash in on the burgeoning bioscience industry. By 2009, 5am had secured a contract with the state to develop a program to manage biospecimens, the tissue samples that form the bedrock of medical research.

Twelve years after moving to Arizona, Gendleman was gone, and the system his company created was scrapped.

Meanwhile, the government agency that poured millions into the project hasn’t discussed it at a formal meeting in months, despite its status as a core initiative. However, new plans may breathe life into the program by the end of the year.

“There was nothing but good intentions, and (the agency) just decided to go in a different direction, and I don’t know what that direction is today,” Gendleman said.

That project – the Arizona Biospecimen Locator – was an online database of tissue and organ samples developed under the purview of the Arizona Biomedical Research Commission, which supports and oversees bioscience research in the state.

Biospecimens, such as blood or organ tissues, are removed from patients for research purposes. They are critical in helping scientists understand the human body and fight diseases.

“In essence, a great deal of the biospecimens that existed in Arizona were not readily visible,” Gendleman said. “It’s not that they weren’t available, they weren’t visible.”

Hospitals already distributed these specimens to researchers, but problems arose because every hospital used a different system. They had no unified method for deciding who could access them and for what purpose, meaning researchers had trouble finding the right samples for their experiments.

The locator allowed researchers to track and order biospecimens sourced from hospitals across the state. It consolidated information about samples into a searchable database.

“Basically, we had the Amazon for samples for Arizona,” Gendleman said.

5am began work on the locator in 2009, after years of working on other projects, and according to Victor Waddell, executive director for the Biomedical Research Commission, the locator launched in June 2012.

5am began building the locator as a standalone service and even sold a version of the software to Oregon Health and Science University, Gendleman said. At the time, the locator was one of 5am’s core product offerings.

Rising costs and a realigned focus

That success didn’t last long.

State officials said they could not provide the amount spent to develop the program because of a gap in reporting caused by changes in agency structure. But maintaining the locator was expensive.

There wasn’t a clear way to sustain the endeavor because the system only charged researchers for the cost of distribution and recovery.

And because orders from the locator could be unpredictable, there was no guarantee of regular usage, Gendleman said. They had to maintain the program even in the event that no one used it, adding to the costs.

At its peak in 2013, the locator connected to three hospitals and contained information on more than 12,000 specimens, according to agency reports. The commission spent about $580,000 to fund 5am’s work that year.

By the next year, the commission spent more than $1.6 million on the locator, which had ballooned to account for more than 18 percent of the agency’s expenditures, according to reports. In addition to general maintenance costs, the program continued to expand.

As the costs rose, the political environment at the state Capitol changed. The commission was an independent agency when 5am began working with it in 2009. Over the next few years, the state folded the commission into the Department of Health Services.

The move brought a new direction and a desire to reduce spending across the agency.

The commission draws its revenue from tobacco and lottery taxes, and has received about $10 million in revenue each year since 2010.

For a time, the commission spent more than it was earning. In 2013, the commission expended about $12.4 million for all programs. By 2015, it had cut spending to less than $7 million.

The locator project was not immune to the cuts.

“There was change in leadership, and the funding for even the basic, ‘we need to keep the lights on, guys,’ ran out, and it ended at that time,” Gendleman said.

Meeting minutes show the commission noticed problems with the locator as early as August 2013, saying the program needed a new business model to be sustainable. At the time, the commission said it could not fully fund the project by 2015. Waddell said the locator program ended as of September 2014.

Finding a sustainable future

Despite the issues surrounding funding, Waddell said the commission and member hospitals are trying to relaunch the public database. He’s hopeful that a newer, more sustainable version of the locator could expand to more hospitals and research institutions to become the go-to database to find specimens in the state.

Catherine Seiler, biobank program manager at Dignity Health St. Joseph’s Hospital and Medical Center, is working with the commission to find a path forward for the locator.

She and others have been attempting to find a way to allow hospitals, research institutions and other stakeholders to funnel revenues into a fund that could support programs like the locator without financial aid from the commission.

She said she hopes to propose the plan, tentatively called the Arizona Research Resource Network, within the next few weeks. She has been meeting with bioscience organizations across the state to assess their needs and wants. Feedback has been “extraordinarily positive,” Seiler said.

“There are a number of projects that are supported by the (commission), and what we wanted to do was combine the needs of researchers throughout Arizona … with the idea that these programs might need to be supported financially in the future by a mechanism other than the (commission),” Seiler said.

Seiler said she hopes the locator comes back online by the end of the year. Although 5am provided the commission with the source code for the locator, the next version will use a different company’s software.

Despite the new direction, Seiler said many of the lessons learned from the old locator may be applicable to the latest edition.

Research rolls on

The locator partnered with three hospitals for tissue samples: St. Joseph’s Hospital, Phoenix Children’s Hospital and Maricopa Integrated Health System, according to the commission’s website.

Commission reports show partner hospitals distributed more than 675 specimens to researchers during the few months it was active in fiscal 2015.

While trading via the locator ground to a halt when it discontinued, the program’s inactivity hasn’t necessarily slowed down research.

“(The hospitals) can still be reached by researchers. They’re in communication with researchers, particularly in Arizona,” Waddell said. “They’re still active. They’re still moving forward. … However, the ultimate goal is to get (the specimens) posted on a website to where they’re going to be more accessible.”

The commission’s website says the publicly searchable database will return soon. And although it lists the locator as one of its priorities, the agency last publicly discussed the locator in a significant manner in December 2013. Since then, it was briefly mentioned twice – at the agency’s July and October 2015 meetings – as a possible agenda item for future gatherings, according to meeting minutes.

The commission’s next meeting was scheduled for February, according to commission program manager Jennifer Botsford.

The meeting hasn’t happened yet because the commission must evaluate a large number of scientific research grant requests before it can meet, and commissioners often have conflicting schedules, Waddell said.

“We’ve had some challenges recently, but we’ve still been able to keep moving forward with things,” Waddell said.

Ahead of the times

What Arizona was trying to do with the locator was unprecedented, among the first of its kind on a statewide scale.

Gendleman said he believes the locator may have hit the market too early, that technology had changed too rapidly for hospitals and the government to easily integrate new ideas.

“There wasn’t an iPhone when we started the company,” he said. “There wasn’t an iPad. There wasn’t the cloud. … This is a tremendous amount of technology shift in both consumer technology and scientific technology.”

He believes the institutions don’t necessarily want a technological solution to their specimen problems. Instead, he said they use “people power,” and researchers call the hospitals if they want samples.

5am Solutions officially left Arizona in 2015. The company now has locations in Maryland, San Francisco and Boston and has shifted its offerings toward data analysis, but Gendleman said he still gets emails from Seiler about the locator.

And while he considers the locator a worthy scientific idea, Gendleman said he doesn’t know how to make it into a viable product and convince institutions to commit to the concept. Underpinning the problem is what he called a “cultural bias toward the individual” in a scientific community driven to aggressively publish research to survive in a competitive environment.

“That’s the business and that infiltrates the different types of hospitals, no matter who they are, if they have a clinical research motive,” Gendlemen said. “I think that’s the real challenge – that the resource is viewed as a scarcity – which led our enthusiasm for the idea that we’ve just got to bring the specimens from the basement to the Internet. That’s all we have to do. No. That’s not all we have to do.”