In 1978, James Carlson was teaching pharmacy science at North Dakota State University, and doing pharmaceutical research. He doubted a generic drug was equal to the name brand drug it was designed to replace, so he convinced the drug company to let him test the drug on human subjects.
His study found the generic drug was equivalent to the brand name.
The $4,600 study led to a $1.5 million contract for the drug company to sell its drug to veteran's hospitals.
"I didn't find that out until several years later," says Carlson, "but it gave them impetus to keep coming back to us -- since we had the cheapest research prices in the country, at that time probably in the world."
In 1983 Carlson and a colleague started PRACS Institute. He says his goal was a six-bed research facility with his own phone and computer. He hoped to win $200,000 a year in study grants. PRACS now has 650 employees, and 900 beds. It paid more than $15 million to research subjects last year.
Contract research organizations, or CROs, are a rapidly growing part of the pharmaceutical testing industry.
James Carlson recently retired from day-to-day operations, and PRACS merged with four other research companies to form Cetero, one of the largest private research organizations in the country. Inside the company's new Fargo facility, there are dormitories with long rows of hospital beds and state-of-the-art labs. An individual drug study might have 48 participants.
James Carlson says PRACS has more than 100,000 potential research subjects in its database.
Some cardiac studies require subjects to spend two or three weeks at PRACS, but the typical drug study happens on a weekend.
Subjects check in on Friday and leave on Sunday. Each person in the study might earn from several hundred to several thousand dollars.
Everyone gets a full physical examination before being accepted in the study. Everything they eat and drink is closely monitored. Bring in a candy bar or some chips and you're likely to get thrown out of the study. Everything is scheduled, down to the second. Drugs are given at precise times and then teams of phlebotomists stand ready to draw blood at precise intervals. Each subject might have blood drawn a dozen or more times over the weekend. That amounts to about a soda can full of blood.
Carlson says the accuracy of drug studies depends on rigid standards. If one lab tech has a problem drawing blood from a subject, another is waiting to step in and make sure the next subject's blood is drawn on time. There are cushions at the ready in case a study participant faints at the sight of a needle.
"If they faint and the needle is already in the vein and we're getting blood, we keep on going," says Carlson.
"We have a simple rule, 'You came to give blood, we're here to get blood,'" he adds with a chuckle.
After blood is drawn it goes immediately to a freezer to stop the drug from breaking down. Then it goes to a lab where the blood is analyzed and the amount of the test drug is measured.
Carlson says the precisely choreographed process is essential to a valid drug study. "Our job here is not to cure people. Our job is to make sure when you give these drugs to humans they are absorbed in an absolutely predictable manner and it's repeatable," explains Carlson.
Drug companies use the studies to convince the Food and Drug Administration a generic drug can safely be marketed.
Carlson contends PRACS research saves American consumers more than $2 billion a year by helping bring generic drugs to market.
PRACS does testing for at least 50 drug companies in North America and Europe that pay for the studies. That arrangement worries some industry observers who say there's not enough oversight.
According to Mary Faith Marshall, professor at the University of Minnesota Center for Bioethics, privately funded research lacks adequate government oversight.
"It boils down to the integrity of the organization and it's leadership and certainly that filters down to the people within the organization," says Marshall, who believes private research companies should all be required to meet strict accreditation standards.
University researchers and private companies like PRACS are required to have an independent Institutional Review Board, or IRB. The board's job is to ensure studies are done safely.
Tufts Center for the Study of Drug Development Senior Fellow Ken Getz, says drug companies will continue to outsource more of their research studies to private companies and universities.
Getz says more oversight is needed industry wide. The FDA regulates drug studies but doesn't closely monitor them. Getz says IRBs are usually made up of volunteers who don't always have enough time to carefully review the growing number of drug studies.
"The IRB oversight is stressed within the institutional setting and within the for-profit setting. I'm concerned eventually, this is a system that will face some serious challenges unless it can address these capacity needs," says Getz.
Getz says private drug researchers have a strong incentive to maintain high standards. He says mistakes could destroy a CRO financially.
PRACS Institute founder James Carlson agrees, a research company won't survive without high ethical standards. He says drug companies don't always like the results of the studies they pay for.
"If we have to be at odds with a drug company because we think their product is inferior, so be it. In the end we'll win because you can't put out an inferior product," says Carlson.
Carlson says recent scandals that drove some private drug research organizations out of business were caused by ethics failures.
PRACS Institute recently added a skin-products testing lab and James Carlson says the company still has room to grow in the lucrative pharmaceutical research industry.