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Global CRO Market: Quantitative Assessment
Frost & Sullivan, June 2011, Pages: 57
This research service provides revenue forecasts for CROs globally, by phase and market type, R&D spending trends of pharmaceutical and biotechnology companies and pipeline drugs and clinical trial trends by phase and region. For the purpose of this research service, the U.S. CRO markets include revenues derived from the preclinical and clinical services offered by CROs to pharmaceutical and biotechnology sponsors in conducting clinical trials. The markets are approached from a service provider's perspective.
This Frost & Sullivan research service titled Global CRO Market: Quantitative Assessment provides an extensive analysis of the contract research organization (CRO) markets, with region-wise forecasts and trends. The study also provides an in-depth analysis of clinical development stages and R&D spending. In this research, Frost & Sullivan's expert analysts thoroughly examine the following segments: preclinical, Phase I, Phase II, Phase III, and others, including candidates in New Drug Application (NDA) and Biologics License Application (BLA), Phase IV and unclear status.
Market Overview
Global CRO Market Recovers Strongly Post Recession with Robust Revenue and Volume Growth
The global CRO market has resumed its upward growth trajectory after the recent economic downturn and is expected to grow at a compound annual growth rate (CAGR) of 10.5 percent until 2017. Although the recent economic predicament had resulted in a severe decline in growth in the U.S. and western European markets, the emerging markets and lower-cost locations benefited from increased outsourcing. Access to a diverse and large untapped patient population is driving the demand for global trials. R&D spend is expected to remain high due to the rapid expansion of the biotechnology industry. The future outlook for CROs is formidable, driven by a demand upsurge for services across tiers and strong request for proposals (RFPs) from pharmaceutical and biotechnology companies. Productivity benefits have helped stoke market growth. “Cost pressure on pharmaceutical margins is a key driver for outsourcing,” notes the analyst of this research service. “CROs enable outsourcing companies (pharmaceutical and biotechnology) to convert their fixed costs of building and maintaining facilities into variable costs.”
The global CRO market is experiencing two-tiered growth from “Big Pharma”, which is outsourcing work to CROs to lower fixed costs, while biotechnology and specialty pharmaceutical companies outsource work to CROs due to the lack of infrastructure. Demand for functional services, such as data management, consulting, logistics, translation, regulatory, and consulting, is experiencing strong growth.
Increasing Divide between Patient Access and Studies Threatens Productivity
Although the market is progressing steadily, there are some aspects clouding its landscape. Large-scale consolidation in the “Big Pharma” space is likely to have a negative impact on growth as witnessed in the late 1990s and early 2000s. Apart from this, as trials become more global and continue to grow in complexity, there is rising competition for access to patients, new investigators, and new studies. The gap between patient access and studies has been growing consistently over the past decade and could affect future studies. For studies that depend heavily on emerging markets, this can lower productivity by extending the trial times. Also, an underlying churn in existing investigators is further causing this divide to widen. CROs and sponsors continue to grapple with the situation and are continuing to seek new ways to increase access to patients. CROs and service providers are looking to counter this challenge by partnering with patient recruitment firms. Service providers are also outsourcing large scale global trials through the expanded reach of CRO partners, which enables access to an extensive patient pool.
“Trends indicate that the growth rate of spending for biotech CRO is expected to continue outpacing that for pharma CRO,’ says the analyst. “Specialty CRO services are increasingly being positioned to cater to biotechnology because of synergies in the business models.”
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Preclinical
- Phase I
- Phase II
- Phase III
- Others includes candidates in New Drug Application (NDA) and Biologics License Application (BLA), Phase IV and unclear status
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