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NMR Instrument Price Hikes Spook Users

With Agilent gone, users fear Bruker will abuse its dominant position in the nuclear magnetic resonance market

by Marc S. Reisch
June 29, 2015 | A version of this story appeared in Volume 93, Issue 26

Credit: Bruker Corp.
Bruker says raising prices will allow it to develop next-generation NMR systems.
Rendering of a 1 GHz nuclear magnetic resonance spectrometer magnet.
Credit: Bruker Corp.
Bruker says raising prices will allow it to develop next-generation NMR systems.

Researchers at Cornell University were prepared to spend about $500,000 with scientific instrument maker Bruker Corp. to upgrade a nuclear magnetic resonance spectrometer, a workhorse tool used to characterize the physical and chemical properties of molecules. But they were shocked to learn in March they would have to pay Bruker 25% more than they had budgeted for the device upgrade.

What had changed between September 2014, when Cornell received a quote on the upgrade, and March was that Agilent Technologies decided to leave the NMR business. Agilent’s October exit gave Bruker a near-monopoly in the high-field NMR business. Its only competition now comes from Jeol, a Japanese firm with a global market share of less than 10%.

With Agilent gone, other NMR users at academic institutions are expecting price increases too. Customers also bemoan the loss of competition that helped restrain prices and bring technology advances to market.

Bruker says it is committed to new science but that developing technology means it must make a profit. The firm says it is eliminating discounts from NMR list prices and increasing list prices in the high-single-digit percent range.

For Cornell, the 25% increase over the September 2014 quote was unprecedented, says David B. Collum, chair of the school’s department of chemistry and chemical biology. It put the university in a bind. “We only got money for the NMR based on the quote,” he says.

Funds to make the purchase came from government grants, university resources, and research group operating budgets. Finding another $125,000 to pay for the NMR upgrade just wasn’t going to be possible, Collum says.

He contends that Bruker’s September quote was calculated to put pressure on a faltering Agilent just weeks before Agilent exited the NMR business. He suggests that Bruker only intended to stand by the quote if Agilent had stayed in the business.

With Agilent gone, Bruker felt free to raise its price, Collum says. When Cornell balked, Bruker offered the school a different upgrade package “that would not suit our needs.” Collum says he took an unorthodox approach and went on the social network Twitter to complain in a tweet that caught Bruker’s attention. Bruker has since agreed to honor the original quote, he says.

Joshua Young, Bruker’s vice president of investor relations, tells C&EN, “We are not raising prices by 25%, but we are stopping discounts.” NMR users can expect to see an average price increase of less than 10%, he says.

“Our earnings per share have been flat. To be healthy and competitive, we have to grow our earnings as well as our sales,” Young explains. Improved earnings also justify Bruker’s research investment in NMR technology and “take it into the gigahertz-plus realm to aid protein structure research,” he says.

Indeed, Bruker continues to update its NMR line. In April, at the Experimental Nuclear Magnetic Resonance Conference in Pacific Grove, Calif., the firm revealed a soon-to-be-available 1-GHz NMR magnet. According to Frank H. Laukien, Bruker’s chief executive officer, next-generation GHz-power tools will increase understanding of inherently disordered proteins and could enable “breakthroughs in the study of cancer biology and neurodegenerative diseases, like Alzheimer’s.”

Even though Bruker maintains that it will continue to advance NMR technology, Martha Morton, director of research instrumentation at the University of Nebraska, Lincoln, says she is worried that, with Agilent out of the picture, “competition and scientific progress” could suffer over time.

For now, Morton says she is glad her lab does not have Agilent NMRs and uses Bruker exclusively. People with equipment from Agilent and its predecessor Varian “are already having problems getting parts,” she says.

Bruker, on the other hand, has a reputation for service, Morton says. “I hope that won’t change.”

That reputation, as well as the availability of many different types of probes, was behind Hla Win-Piazza’s recent decision to buy new hardware from Bruker instead of Jeol for use with an older magnet. A probe holds samples in an NMR’s magnetic field for analysis.

Win-Piazza is the NMR lab supervisor at Western Washington University in Bellingham, Wash. Because two faculty members conduct peptide research, the university needs probes that aren’t yet available from Jeol, she says. Otherwise, she might have decided to go with a Jeol system, which is less costly.

The Japanese firm, Win-Piazza notes, is promising to expand the variety of probes it offers. If her decision to upgrade the university’s NMR equipment came in another year or two, Win-Piazza says that might have also pushed her toward Jeol.

“I think we need to shake Bruker’s tree,” Win-Piazza says. “Some of us need to start using Jeol and make the industry more competitive.”  



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