Contract Research Organizations Market Definition
Contract Research Organizations (CROs) offer end-to-end solutions in conducting clinical trials for pharmaceutical, biotechnology and medical device companies, collectively referred to as sponsors. The core services offered by CROs to biopharmaceutical companies include initial drug discovery solutions, toxicology studies, bio-analytical services, central laboratory, site monitoring, data management services, vigilance, bio-statistics, study and development program design and consulting, regulatory affairs and a variety of post-marketing surveillance services.
Contract Research Organizations Market Size
The global contract research organizations market reached a value of nearly $44.4 billion in 2017, having grown at a compound annual growth rate (CAGR) of more than 9.9% since 2013.
Growth in the contract research organizations market in the historic period resulted from the rising cost of drug development, increasing patent expirations of drugs and growing biologics market. Factors that negatively affected growth in the historic period were clinical trial failures and stringent and differing government regulations.
Going forward, growing demand for outsourcing services in emerging countries and expanding scope of CRO solutions through technology will drive growth. Factors that could hinder the growth of this market in the future include data safety concerns and CRO scandals will affect market growth.
Contract Research Organizations Market Drivers
The Key drivers of the contract research organizations market include:
Increasing Patent Expirations Of Drugs - Various top selling block buster drugs have reached their patent expiry and this has forced pharmaceutical companies to invest more on drug development process to come up with new and more effective products. About 61 drugs lost their patent protection in 2016, and patents of 43 drugs expired in 2017. Pharmaceutical companies are facing strong competition from generic and biosimilar drug manufacturers, but they are focused on cost containment and shortening development timelines without compromising quality, thus the patent expiration of drugs is driving the CRO market. CROs are also likely to benefit from the growth of biosimilars as patents for biologics representing billions of dollars have expired or are set to expire soon.
Contract Research Organizations Market Restraints
The key restraints on the contract research organizations market include:
Stringent And Differing Government Regulations - Majority of the clinical trials and other research processes are outsourced to various countries simultaneously. These destination countries have different guidelines and regulatory processes related to drugs, filing and clinical trials, this can cause issues and act as a restraint on the market. The conduction of multi-location trials of a single drug in different procedures in different countries poses a challenge to pharmaceutical companies as they have to follow a completely different procedure in each country. This is observed as one of the major challenges for research outsourcing in different countries and therefore, a company prefers to restrict outsourcing to one destination country. This restricts the research outsourcing market on a global level. For instance; clinical trials, regulatory filings and approval of drugs in India and China have variations. India and China are the major research outsourcing destinations, compelling pharmaceutical companies to choose either of them for outsourcing research.
Contract Research Organizations Market Trends
Major trends influencing the contract research organizations market include:
Personalized Medicine/Genetic Testing Capabilities - CROs are focusing on investing in personalized medicine and gene testing capabilities to aid in the development of more targeted and effective medicines. This trend can be attributed to the biopharmaceutical pipeline shifting towards specialty therapeutics, where the utilization of personalized medicine is inherently greater it they can dramatically improve outcomes. For example, ICON established a partnership with Genomics England, which provides DNA-mapping services for patients focusing on cancer, rare and infectious diseases. With this partnership, ICON aims to better advise biopharmaceutical companies on how to capture genomic indicators to aid in the therapeutic development process.
Strategic Partnerships To Benefit CROs And Sponsors Alike - CROs are forming strategic partnerships with large biopharma companies to establish a strong CRO-sponsor relationship. Strategic partnerships help CROs by providing them with improved visibility, higher network utilization and expanded capabilities. On the other hand, strategic deals offer sponsors attractive pricing, expertise in disease areas and regulatory compliance, improved global reach and accelerated time to market. For instance, in 2015, Parexel International formed a strategic alliance with Optum, a business division of UnitedHealth Group. Other strategic partnerships between CROs and their sponsors include, Quintiles-Ascendancy Healthcare, CRS-Bayer, LabCorp-BMS and ICON-Pfizer. According to a study from Parexel International, about 85% of biopharmaceutical executives viewed strategic partnerships as positively impacting CRO-sponsor relationships.
Contract Research Organizations Market Segmentation
The Contract Research Organizations market is segmented by service type, by therapeutic area and by geography.
By Service Type-
The contract research organizations market is segmented by service type into
Phase II had the highest growth rate of nearly 12.19% during the historic period.
- a) Preclinical Studies
- b) Phase I
- c) Phase II
- d) Phase III
- e) Phase IV
- f) Drug Discovery
- g) Others
By Therapeutic Area -
The contract research organizations market is segmented by therapeutic area into
By Geography - The contract research organizations market is segmented into
- a) Oncology
- b) CNS Disorder
- c) Cardiovascular Disease
- d) Metabolic Disease
- e) Infectious Disease
- f) Other Therapeutic Area
North America is the largest market for contract research organizations, accounting for almost 42% of the global market. It was followed by Asia-Pacific, Western Europe and then the other regions. Going forward, Asia-Pacific and Eastern Europe will be the fastest growing regions in this market.
- o North America
- o Western Europe
- o Asia Pacific
- o Eastern Europe
- o South America
- o Middle East
- o Africa
Contract Research Organizations Competitive Landscape
Major Competitors are:
Other Competitors Include:
- • IQVIA
- • Laboratory Corporation of America Holdings
- • ICON Plc
- • PAREXEL
- • PPD
- • Pharmaceutical Product Development
- • Syneos Health
- • Charles River Laboratory
- • Wuxi Pharmatech
- • Medspace Holdings
- • Envigo
- • PSI CRO AG