Headquarters: Fargo, North Dakota
Founded: 1983
Revenues: Undisclosed
Employees: 265
Web Sites: www.pracs.com
What It Does: Evaluations of medications, focusing on generic drugs


You might not think of Fargo as a major center of pharmaceutical research. But that’s only if you haven’t heard of the work of Dr. James Carlson. Carlson founded the Pharmacology Research and Clinical Studies Institute—now simply PRACS Institute—in 1983 to provide clinical research and testing of new and generic medications. PRACS’s evaluations focus on these medications’ effects on healthy patients in order to discover any “events,” or side effects, that the manufacturers would have to correct. In two decades, PRACS has become one of the chief standalone drug-research labs in the country, despite being far from the centers of the pharmaceutical industry. 

The inspiration for PRACS came while Carlson was a professor of clinical pharmacy at North Dakota State University (NDSU). He and his students had worked with the drug analysis laboratory within the hospital run jointly by the university and the Veterans’ Administration, evaluating drug levels in patients’ blood in order to optimize the effectiveness of the medications. “We thought we uncovered an inferior generic drug while monitoring patient drug-blood levels,” Carlson recalls. “We developed a sophisticated study design to evaluate both the innovator [or original] drug as well as the generic drug.” At the time, the U.S. Food and Drug Administration (FDA) had no regulations regarding how generic drugs should be clinically evaluated. In fact, the FDA would later use the study’s methodology as the standard for establishing generic-drug equivalence to “innovator” medications.

The research study showed that the prescribed generic drug was as safe as the innovator.  It also revealed a need for generic-drug research in general. There was a growing number of generic-drug companies founded by former employees of the pharmaceutical firms developing innovator medications.

“While [these former employees] had expertise in making the drug, they needed assistance in evaluating that drug in humans to assure their generic product matched the innovator product,” Carlson says. “We did have competitors, but our approach was unique because our study design requirements were similar to the innovators’.”

That led Carlson to develop a drug research institute—originally within NDSU, and then as an independent enterprise. He describes the firm’s early days as “rollercoaster years.” While projects from the newer generic-drug manufacturers did come in, he found it difficult to bring in work consistently. And the major pharma firms, based predominantly on the East and West coasts, were reluctant to go to Fargo. “Only our persistence, politeness, consistent results for the generic drug companies, and our extremely positive FDA audit scorecard convinced them to try a Midwest company,” he says.

PRACS has focused especially on developing its quality-assurance procedures. Drug firms, Carlson notes, have a zero-error policy in drug research. While they are loyal to excellent study sites, they will immediately abandon any site where errors are discovered. “It takes one error to lose [a client],” he says. “It may take three to six years to regain a lost client.”

PRACS sometimes performs evaluations during late-stage human trials, but it prefers to remain a specialist in generic drug evaluation. “We can better anticipate what adverse events to expect in our healthy participants,” Carlson says.

In 2002, PRACS moved into a custom-designed 115,000-square-foot clinic research facility in Fargo; it also has opened satellite offices in East Grand Forks and San Diego. Still, says Carlson, “I am not sure I realized we were successful until recently, when all the accolades were placed on our efforts and accomplishments.”