2013 Trends In Drug Testing 15th Annual Industry Survey CONDUCTED BY: BILL CURRENT [email protected]

2013 Trends 2013 Trends In Drug TestingIn Drug Testing15th Annual Industry 15th Annual Industry SurveySurvey

CONDUCTED BY:CONDUCTED BY:

BILL CURRENTBILL CURRENT

StateDrugTestingLaws.comStateDrugTestingLaws.com

[email protected]@billcurrent.com

954-255-8650954-255-8650

Thanks to our Thanks to our 2013 Survey Sponsors…2013 Survey Sponsors…

2013 Survey of 2013 Survey of Drug Testing Industry TrendsDrug Testing Industry Trends

The 2013 Survey of Drug Testing Industry Trends is copyrighted by WFC & Associates.

These slides may be found at StateDrugTestingLaws.com.

For additional information please contact Bill Current at 954-255-8650 or email at [email protected]


Panel of drug testing experts 16-question survey conducted by one-on-one

interviews and via email responses Plus one bonus question Brand-name recognition rankings Results were summarized by verbatim responses


Allison Thierry-Hunt, Allied Safety HealthAllison Thierry-Hunt, Allied Safety Health Bob McCormick, Quest DiagnosticsBob McCormick, Quest Diagnostics Chris Williams, ARCpointChris Williams, ARCpoint Colin Woods, DISAColin Woods, DISA Darrin Schmidt, PAMLDarrin Schmidt, PAML David Eades, SterlingDavid Eades, Sterling Dennis Bennett, EDPMDennis Bennett, EDPM Eric Quilter, Compliance Information ServicesEric Quilter, Compliance Information Services Gina Kesler, D&A ExpertsGina Kesler, D&A Experts Greg Capps, ScreenHubbGreg Capps, ScreenHubb Heidi Seaton, Orange Tree Employment ScreeningHeidi Seaton, Orange Tree Employment Screening Jesse Berger, PinkertonJesse Berger, Pinkerton

2013 Survey of 2013 Survey of Drug Testing Industry TrendsDrug Testing Industry Trends Joe Whelan, DSI Medical ServicesJoe Whelan, DSI Medical Services Judy Swartley, Red PlanetJudy Swartley, Red Planet Laurie Jantz, OraSure TechnologiesLaurie Jantz, OraSure Technologies Lynn Carr, FirstLabLynn Carr, FirstLab Lynn Ward, University ServicesLynn Ward, University Services Mary Rush, Professional Drug Screening ServicesMary Rush, Professional Drug Screening Services Mickey Moore, Employee Screening Svc. of MissouriMickey Moore, Employee Screening Svc. of Missouri Nina French, FirstAdvantageNina French, FirstAdvantage Sandra Serrano, ASAPSandra Serrano, ASAP Todd Bailey, Premier BiotechTodd Bailey, Premier Biotech Todd Shoulberg, ClearStarTodd Shoulberg, ClearStar

2013 Survey Format2013 Survey Format

This presentation will be presented in five This presentation will be presented in five parts:parts:1.1.State of the IndustryState of the Industry2.2.Trends in Drug TestingTrends in Drug Testing3.3.Brand-Name RecognitionBrand-Name Recognition4.4.Concerns & PredictionsConcerns & Predictions5.5.Bonus QuestionBonus Question: What impact will legal : What impact will legal marijuana have on the drug testing marijuana have on the drug testing industry? industry?

Hot IssuesHot Issues

HHS Guidelines for Lab-Based Oral Fluid HHS Guidelines for Lab-Based Oral Fluid TestingTesting

Synthetic Drugs (K2, Spice, etc.)Synthetic Drugs (K2, Spice, etc.) Legalization of MarijuanaLegalization of Marijuana On-going ConsolidationOn-going Consolidation

Section 1: Section 1: State of the IndustryState of the Industry

State of the IndustryState of the Industry

Drug Testing SalesDrug Testing Sales

Background Screening SalesBackground Screening Sales

Non-Workplace MarketsNon-Workplace Markets

State of the Industry State of the Industry Some of our occupational health clients have Some of our occupational health clients have scaled back scaled back due due

to the economy. We have also added clients, so we are to the economy. We have also added clients, so we are about evenabout even with the previous year. with the previous year.

Growing at same rate as economy about 2%...Growing at same rate as economy about 2%... Substantially up… Substantially up… largest year of growth curvelargest year of growth curve… sales are up … sales are up

across the board.across the board. Drug testing sales are up, not as much as usual… up 9%.Drug testing sales are up, not as much as usual… up 9%. Excellent for us. Very, very good. Testing through first 6 Excellent for us. Very, very good. Testing through first 6

months is up over 15%. Revenue is up over 19%. months is up over 15%. Revenue is up over 19%. Having a really, really good year. Having a really, really good year. Client for client, up, absolutelyClient for client, up, absolutely

Drug Testing SalesDrug Testing Sales Sales are up, about 30%Sales are up, about 30% Up, just under 20%Up, just under 20% Up, approx. 10%Up, approx. 10% Up 11%Up 11% Sales are up approximately 25%Sales are up approximately 25% Up by 20%Up by 20% Up, by approximately 10-15%Up, by approximately 10-15% Up- 14%Up- 14% Up… significant increase… current clients are up 15-20% Up… significant increase… current clients are up 15-20%

over same period last yearover same period last year Our current clients are up 20%; across the board we’re up Our current clients are up 20%; across the board we’re up

20%... our company is up more than that 20%20%... our company is up more than that 20%

Background Check SalesBackground Check Sales

Fairly Fairly stablestable…… SteadySteady… background screening always seem to be … background screening always seem to be

last consideration in the screening processlast consideration in the screening process Doesn't seem to rise to one-stop shop conceptDoesn't seem to rise to one-stop shop concept; client ; client

may have had a long-time relationship with a provider may have had a long-time relationship with a provider that they stick with… it’s a very small piece of our that they stick with… it’s a very small piece of our business modelbusiness model

We have decided to We have decided to no longer provide background no longer provide background checks checks and instead focus entire energy and attention and instead focus entire energy and attention on drug and alcohol testing, training and program on drug and alcohol testing, training and program administrationadministration

Background Check SalesBackground Check Sales

Up just like drug testing… more people do background Up just like drug testing… more people do background checks than drug testingchecks than drug testing

Huge untapped market… amazing how much Huge untapped market… amazing how much marketing you can do and not run up against marketing you can do and not run up against competitioncompetition

Marginally upMarginally up Sales are up… doubled since last year.Sales are up… doubled since last year. Up, just over 20%Up, just over 20% Up, approximately 10%Up, approximately 10% Sales are up approximately 25%Sales are up approximately 25%

Non-Workplace MarketsNon-Workplace Markets Primary care officesPrimary care offices, tests requested by parents of , tests requested by parents of

teens… largely due to K2, prescription drugs, etc.teens… largely due to K2, prescription drugs, etc. Get more requests for Get more requests for physicalsphysicals Interesting to see what Interesting to see what CotinineCotinine does with the ACA… does with the ACA… Seeing a renaissance in Seeing a renaissance in student testingstudent testing… maybe all the … maybe all the

press with PEDs, the funding is there, toopress with PEDs, the funding is there, too Pain management Pain management growing very rapidly, seeing double growing very rapidly, seeing double

digit growth… digit growth… criminal justice criminal justice seems to be opening up, seems to be opening up, higher volumehigher volume

More drug driving cases requiring testing, more More drug driving cases requiring testing, more lawyers lawyers seeking help for their clients seeking help for their clients as part of their penanceas part of their penance

Section 2: Section 2: Trends in Drug TestingTrends in Drug Testing

K2/Spice, Bath SaltsK2/Spice, Bath Salts

POCT/On-Site TestingPOCT/On-Site Testing

Oral Fluid TestingOral Fluid Testing

Hair TestingHair Testing

Drug Test PricesDrug Test Prices

Collection PricesCollection Prices

K2-Spice/Bath SaltsK2-Spice/Bath Salts

While some said these drugs are here to stay, While some said these drugs are here to stay, many said the obstacles to sales are significant, many said the obstacles to sales are significant, including:including:Tests are expensiveTests are expensiveWindow of detection is too shortWindow of detection is too shortLabs only test for a small number of the many Labs only test for a small number of the many chemical compoundschemical compounds

The high might be over? The high might be over?


Continued growthContinued growth Increasing as employers do not want to delay in hiringIncreasing as employers do not want to delay in hiring More employers are looking for collection alternatives More employers are looking for collection alternatives

as a way to save moneyas a way to save money A little more; throwing it out there a little more and it's A little more; throwing it out there a little more and it's

stickingsticking Big piece of our model… 65-70%, but it’s pretty flat…Big piece of our model… 65-70%, but it’s pretty flat… Urine… not so much oral fluidUrine… not so much oral fluid Don't see much of a trend either way. Don't see much of a trend either way. Not actively Not actively

trying to sell ittrying to sell it The vast majority of our clients continue to require lab-The vast majority of our clients continue to require lab-

based testingbased testing

POCT: On-Site vs. POCT: On-Site vs. Collection SiteCollection Site

More and more drugs become available on a More and more drugs become available on a product… doing 15 panels on a cupproduct… doing 15 panels on a cup

My clients are 85% at clinic/collection site, 15% My clients are 85% at clinic/collection site, 15% at the workplaceat the workplace

80% at the collection site and 20% at the 80% at the collection site and 20% at the worksite worksite

About 60% are being done at worksite. Most About 60% are being done at worksite. Most bringing collectors out. bringing collectors out.

60% at collection site (urine), 40% onsite at 60% at collection site (urine), 40% onsite at place of work (saliva)place of work (saliva)


StaffingStaffing ConstructionConstruction Corrections/Criminal JusticeCorrections/Criminal Justice

Trending up… more and more drugs become Trending up… more and more drugs become available on a product… doing 15 panels on a available on a product… doing 15 panels on a cupcup


Seen Seen good growth good growth in it… customers that use it are in in it… customers that use it are in growth industries… seen some large customers growth industries… seen some large customers wanting to pilot itwanting to pilot it

Little upward swingLittle upward swing… simplest and least invasive … simplest and least invasive process… if an employer is willing to bring it in-house process… if an employer is willing to bring it in-house that would workthat would work

Much educating to doMuch educating to do. Employers aren’t . Employers aren’t knowledgeable and tend to stick with what they knowknowledgeable and tend to stick with what they know

We receive a lot of inquiries, but not a lot of switches We receive a lot of inquiries, but not a lot of switches from lab-based urine testing.from lab-based urine testing.

Have a couple of accounts that do a lot… one account Have a couple of accounts that do a lot… one account 80,000 this year80,000 this year


Only going up… especially with the new marijuana Only going up… especially with the new marijuana regulations/lawsregulations/laws

No movement. Seeing more increase in hair testing No movement. Seeing more increase in hair testing than oral fluid testing. Surprising to me. Thought oral than oral fluid testing. Surprising to me. Thought oral fluid would take off more than hair testingfluid would take off more than hair testing

Virtually everyone agrees that the SAMHSA regs and Virtually everyone agrees that the SAMHSA regs and eventual DOT adoption will make a significant eventual DOT adoption will make a significant difference in favor of lab-based oral fluid testingdifference in favor of lab-based oral fluid testing

Hair TestingHair Testing

Most said it is either steady or up this year:Most said it is either steady or up this year: Clearly going up… driven by trucking companies… Clearly going up… driven by trucking companies…

haven't seen a customer go from urine to hair, not like haven't seen a customer go from urine to hair, not like urine to oral fluidsurine to oral fluids

Still a select market, not a bad place to be… but limited Still a select market, not a bad place to be… but limited market product, most consider it just a pre-employment market product, most consider it just a pre-employment test… only a few labs are out in front… test… only a few labs are out in front… trucking, oil & trucking, oil & gasgas… seeing upward trend on hair testing… seeing upward trend on hair testing

Obviously, there's a place for it. If really interested in Obviously, there's a place for it. If really interested in culling out potential drug users it's certainly worth the culling out potential drug users it's certainly worth the money. money.

Drug Test PricesDrug Test Prices

While some said prices are going up, most said they are While some said prices are going up, most said they are coming down:coming down:XYZ is aggressively lowering prices, but they don't need XYZ is aggressively lowering prices, but they don't need to go as low as they go…to go as low as they go…For most part, prices are static… there’s a reluctance to For most part, prices are static… there’s a reluctance to raise pricesraise pricesPressures in the vendor chain to raise prices… hard to Pressures in the vendor chain to raise prices… hard to push price increases on TPA and MROs… margins are push price increases on TPA and MROs… margins are so tight for TPAs and MROsso tight for TPAs and MROs

Collection PricesCollection Prices

Most said they’re going up:Most said they’re going up: Every year collection sites are trying to inch their prices Every year collection sites are trying to inch their prices

up… same trend as always. Get a love note from XYZ up… same trend as always. Get a love note from XYZ Company. Company.

Average for non-PSC collection $16-$17… in remote Average for non-PSC collection $16-$17… in remote areas it starts in 20s… PSC for urine $10 areas it starts in 20s… PSC for urine $10

Average price for urine collection between $16-17 for Average price for urine collection between $16-17 for third party… XYZ Company is higher, move to push third party… XYZ Company is higher, move to push everything over $20… ND, oil & gas areas over $20everything over $20… ND, oil & gas areas over $20

Section 3: Section 3: Brand Name RecognitionBrand Name Recognition

Laboratory Urine TestingLaboratory Urine Testing

Laboratory Oral Fluid TestingLaboratory Oral Fluid Testing

POCT/On-Site Oral FluidPOCT/On-Site Oral Fluid

POCT/On-Site UrinePOCT/On-Site Urine

Hair Testing LabHair Testing Lab

Collection ServicesCollection Services

LaboratoriesLaboratories Company Points # of 1st

Mentions# of 2nd

Mentions# of 3rd

Mentions1. Quest 111 28 12 32. LabCorp 77 9 22 63. Alere 31 2 5 153. MedTox 22 0 6 105. CRL 20 4 1 6

Oral Fluid TestingOral Fluid Testing Company Points # of 1st

Mentions# of 2nd

Mentions# of 3rd

Mentions1. OraSure 98 22 15 22. Quest 55 11 8 63. Immunalysis 39 7 7 44. Alere 8 1 2 1

Oral Fluid POCTOral Fluid POCT Company Points # of 1st

Mentions# of 2nd

Mentions# of 3rd

Mentions1. Alere 39 9 4 32. Branan 16 4 2 03. Stat Swab 7 2 0 14. OraLert 7 1 1 2

Urine POCT Urine POCT Company Points # of 1st

Mentions# of 2nd

Mentions# of 3rd

Mentions1. Alere 54 12 8 2

2. eScreen 34 9 3 1

3. Noble 16 3 3 1

4. EZ Screen 15 2 4 1

Hair TestingHair Testing Company Points # of 1st

Mentions# of 2nd

Mentions# of 3rd

Mentions1. Psychemedics 95 18 12 5

2. Quest 68 13 10 9

3. Omega 64 10 11 12

CollectorsCollectors Company Points # of 1st

Mentions# of 2nd

Mentions# of 3rd

Mentions1.Concentra 52 13 3 7

2. Quest 44 10 5 4

3. LabCorp 29 4 7 3

4. EMSI 19 3 3 4

5. US HealthWorks 18 1 6 3

Section 4: Section 4: Concerns & PredictionsConcerns & Predictions

What’s your greatest What’s your greatest concernconcern for the industry? for the industry?Over saturation of the marketDilution of professional services… people are jumping into the industry representing and misrepresenting what they can bringValue of information and being informed is not just nice, but it will be critical……First time saw some major accounts stop drug testing

Section 4: ConcernsSection 4: Concerns

About getting the cheapest drug screen possible and less about making a DFWP part of the businesses’ strategy to reduce risk and gain more out of human capital. .

Lowest price wins regardless of quality My greatest concern is more regulation, making it

harder for employers to conduct business in a clean workplace

Still a dire need for breath alcohol testing sites. Fewer Still a dire need for breath alcohol testing sites. Fewer and fewer places have the machines.and fewer places have the machines.

Greatest Concerns:Greatest Concerns:

Collections, Collections, CollectionsCollections, Collections, Collections

Section 4: PredictionsSection 4: Predictions

What’s your What’s your predictionprediction for the industry? for the industry?More and more TPA’s will quit the business due to the lack of profit marginI predict this industry will grow; growth brings those that seek to make money and the process behind what we do may get lost.Will see consolidation at all levels, labs, collections… couple of companies that could become juggernauts… challenge for them is to stay customer focused? More often than not they don't… not a threat to [rest of] us.


Next couple of years will be very interesting for the industry. Next Next couple of years will be very interesting for the industry. Next 3-5 years will bring a lot of changes…oral fluids, other alternative 3-5 years will bring a lot of changes…oral fluids, other alternative specimens, including hair; panel will get larger and larger as time specimens, including hair; panel will get larger and larger as time goes on. goes on.

The industry will need to respond quickly to a variety of moving The industry will need to respond quickly to a variety of moving parts—politics, legal changes within WC requirements, and the parts—politics, legal changes within WC requirements, and the use of synthetic drugsuse of synthetic drugs

It will be an exciting time as changes come down the pike.It will be an exciting time as changes come down the pike. Depending on the economy and information available to Depending on the economy and information available to

employers, more will be looking for alternative methods of testing employers, more will be looking for alternative methods of testing (POCT) to save money. Many will not know what to do with a (POCT) to save money. Many will not know what to do with a positive test or what their next course of action should be.positive test or what their next course of action should be.


Expanded opiate panels will become the norm over next 1-1.5 years

Synthetic drug testing, especially marijuana, will continue to grow in terms of company policies and volume

Seeing more push for help with clinical services and physicals… beyond DOT market

Electronic CCFs being accepted by SAMHSA and DOT will be huge, much bigger impact on the industry than lab-based oral fluid testing

I think we will see an increase in pre employment testing and I think we will see an increase in pre employment testing and more stringent adherence to post accident testing requirements as more stringent adherence to post accident testing requirements as well as companies making sure that they have adequate policies well as companies making sure that they have adequate policies in place. in place.


End-users will drive the future of the industry with the End-users will drive the future of the industry with the demand for technological solutions that streamline their demand for technological solutions that streamline their jobs. Those that provide these types of solutions and jobs. Those that provide these types of solutions and customizations will come out on top.customizations will come out on top.

Drug testing is a commodity. While it will continue to Drug testing is a commodity. While it will continue to commoditize, the additional services, specialized commoditize, the additional services, specialized automated solutions and expertise that service agent automated solutions and expertise that service agent offers along with the drug testing is the only way to add offers along with the drug testing is the only way to add value. Over the next 2-3 years, drug testing sales will value. Over the next 2-3 years, drug testing sales will continue to rise with economic growth. continue to rise with economic growth.

I see the potential for employers to conduct their own I see the potential for employers to conduct their own oral fluid collections, thereby reducing the need for oral fluid collections, thereby reducing the need for external collectors.external collectors.

Bonus Question: Bonus Question: Legal MarijuanaLegal Marijuana

What impact will legal marijuana have What impact will legal marijuana have on the drug testing industry? on the drug testing industry?

Will it hurt drug testing sales? Will it hurt drug testing sales? Will employers stop testing for Will employers stop testing for

marijuana? marijuana? Will workplace accidents, etc., Will workplace accidents, etc.,

increase due to the legalization of increase due to the legalization of marijuana?marijuana?


Drug testing sales will not decreaseDrug testing sales will not decrease Accidents will increaseAccidents will increase More state laws will get passedMore state laws will get passed Some employers will remove marijuana Some employers will remove marijuana

from their panel but in time restore itfrom their panel but in time restore it Insurance providers will pressure Insurance providers will pressure

employers to test for marijuanaemployers to test for marijuana


Whether marijuana is legal or decriminalized Whether marijuana is legal or decriminalized does not have a bearing on the inherent safety does not have a bearing on the inherent safety risks associated with its usage. Medicinal risks associated with its usage. Medicinal benefits notwithstanding, I think where there is benefits notwithstanding, I think where there is increased usage, we would also expect an increased usage, we would also expect an increase to workplace accidents/injuries. increase to workplace accidents/injuries.

Workplace accidents will increase due to Workplace accidents will increase due to legalization of marijuanalegalization of marijuana


I think it's going to have little impact; won't be a I think it's going to have little impact; won't be a big impact on the industry.big impact on the industry.

I believe sales will go up for testing, as well as I believe sales will go up for testing, as well as policies and training. I don’t believe employers policies and training. I don’t believe employers will stop testing for MJ. will stop testing for MJ.

This may be a good thing for the oral fluid This may be a good thing for the oral fluid testing folks… oral fluid testing will become a testing folks… oral fluid testing will become a bigger part of pre-employment and post-bigger part of pre-employment and post-accident testingaccident testing


WARNING:WARNING:

It’s going to create a lot of problems for lazy It’s going to create a lot of problems for lazy TPAs and MROsTPAs and MROs

Thanks again to our Thanks again to our 2013 Survey Sponsors…2013 Survey Sponsors…

Learn MoreLearn More

Contact SAPAA to obtain a copy of the Contact SAPAA to obtain a copy of the executive summary of this year’s survey.executive summary of this year’s survey.

Visit Visit StateDrugTestingLaws.comStateDrugTestingLaws.com to learn how you can participate in to learn how you can participate in

future surveys.future surveys.

Bill CurrentBill Current954-255-8650954-255-8650

[email protected] [email protected]

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2013 Trends In Drug Testing 15th Annual Industry Survey CONDUCTED BY: BILL CURRENT [email protected]