Bioinformatics Institute of India: Pharma Department

Market Trends & Opportunities in Contract Research Outsourcing

Hyderabad: Contract Research Outsourcing (CRO), which came into being in the seventies, evolved into an essential component of pharmaceutical market scenario. CRO has emerged as a topic of great interest in the global pharmaceutical and biotechnology markets. Patent expiries, heightened competition in generic drug space, and dwindling drug discoveries necessitate research and development (R&D), innovation, and marketing of new pharma and biotech products to combat price fixing and cost escalations. Smaller product life spans, wordwide regulatory challenges and the increasingly slim deadlines for clinical development magnify in-house R&D expenditure and affect productivity. The CRO concept emerged as a means to control in house R&D costs expand capacities and improve core skills. Contract  research organization now offer a whole  array of expert services ranging from pharmacology, pre-clinical  safety evaluation, clinical trial management, study design, statistical analysis, regulatory services, and data collection to product support.

Increasing costs and falling productivity, among other trends, are driving pharmaceutical companies to outsource an increasing range of functions to CROs in search of time and cost savings. There are seven emerging regions, including China, India and Latin America that are set to see growth in CRO activity; evaluating the leading CROs; and outlining the future of the industry. It highlights the evolving business and relationship models between CROs and sponsor companies and enables optimal outsourcing strategy. The total CRO market size is estimated at $20bn in 2008 and expected to grow at an annual rate of 8.5%, to reach $35bn through 2015. the market is highly fragmented and the number of CROs worldwide has reached over 1,100, despite continued  consolidation. CROs provide substantial global capacity to drug developers and have become a critical contributor to clinical trial activity. Pharma companies complete clinical trials conducted by CROs up to 30% more quickly than those conducted in-house.

Of the large, global contract research providers, Quintiles is the market leader, with 15% of the global market share, followed by Covance and PPD. The five largest CROs have increased their market share and now hold 55% of the total market. The leading CROs are full service providers, operating on a global scale. They act as one-stop shops for all services, from preclinical through marketing. The number of clinical studies conducted in Asia, Central and Eastern Europe, and Latin America is constantly rising. India and China are the future outsourcing destinations of choice. CROs and pharmaceutical companies are turning to strategic partnerships to gain a competitive edge in the global business environment. This is one of the most compelling reasons driving research outsourcing to CRO, which are growing rapidly in line with R&D spending, signifying an increasing shift towards outsourced services.  CROs are increasingly looking at emerging markets as drivers of future growth. Geographic outsourcing to lower-cost locations is a rising  trend and regions such as Eastern Europe, South Africa, India, China and Latin America stand to benefit from higher outsourcing volumes. The diversity amongst emerging regions such as India, China, and Eastern Europe results in complexity in handling the data generated from trials. This is likely to considerably boost demand for functional services such as data management, logistics, translation, regulatory and consulting services, which are set to experience significant growth.