Contract Research Organization (CRO) Services
Market: Introduction
According to the report, the global contract research organization (CRO) services market was valued at ~US$ 49 Bn in 2018 and
is projected to expand at a high CAGR of 8% during the
forecast period. Contract research organizations are engaged in offering a
range of research services on a contract basis to pharmaceutical, medical
device, and biotechnology companies. The global contract research organization
(CRO) services market is driven by increase in the penetration of CROs,
globalization of clinical trials, rise in spending on research and development
(R&D), and growth in the number of clinical trials being conducted
worldwide. North America dominated the global contract research organization (CRO)
services market in 2018 and the trend is anticipated to
continue during the forecast period. Strong growth of the market in the region
can be attributed to increase in the number of clinical trials and rise in the
demand for biosimilars, owing to patent expiry, which fuels the demand for
rapid conduction of trials and regulatory approvals. This prompts
pharmaceutical manufacturers to approach CROs, thereby boosting the global
contract research organization (CRO) services market.
Increase in Penetration of CROs
Demand for contract research organizations (CROs) has been increasing
across all stages of research and development, from early stage development to
late stage development and central laboratory services, over the last few
years. This increase in the demand can be attributed to rise in patent expiry of
major drugs, leading to growing focus of large biopharmaceutical companies on
research and development. Moreover, increase in costs of research and
development, rise in the demand for innovation in the research process, and the
ability to achieve enhanced efficiencies by using scientific and therapeutic
expertise of CROs have been contributing to rise in the penetration of CROs
over the last few years. Adoption of CROs for clinical services increased to
around 47% in 2018 from over 40% in 2015.
The overall penetration of CROs, including preclinical and clinical services,
reached over 40% in 2018 from 25% in 2015.
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Rise in R&D Spending
Drug research and development costs are significantly high. These costs
have been increasing consistently over the last few years. In 2017,
the cost of manufacturing a new molecule entity (NME) was estimated to range
between US$ 2 Bn and US$ 3.5 Bn. Furthermore, the
total research and development spending is anticipated to increase at a rate
of 2%–3% by 2020, primarily driven by significant
unmet needs and significant technological advancements.
The surge in research and development costs has prompted various
biopharmaceutical companies to outsource their research process to CROs, which
ranges from target validation and lead optimization to animal testing and human
clinical trials. R&D spending on oncology has been increasing significantly
over the last few years, which has fueled the need for outsourcing of R&D
activities. Consequently, a CRO called XenTech increased its production
capacity for animal care products to over 50% along with rise in its
collaborative research projects. This significant increase in R&D spending
and rise in the demand for outsourcing of R&D activities fuel the global
contract research organization (CRO) services market.
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Rise in Clinical Trials to Drive Global Market
Among services types, the clinical research services segment is likely
to account for a major share of the global contract research organization (CRO)
services market during the forecast period. The dental CRO segment is projected
to expand at a rapid pace, due to significant rise in the number of clinical
trials being conducted worldwide. Increase in the number of clinical trials is
being driven by surge in the demand for innovative solutions in the healthcare
industry, owing to technological advancements in the industry.
The phase III sub-segment dominated the clinical research services
segment of the global contract research organization (CRO) services market
in 2018. Growth of the sub-segment can be attributed to the large
number of trials in medical oncology currently under testing in human subjects.
Furthermore, phase III studies are highly cost intensive and they witness
significant failure rate, which leads to increase in the outsourcing of
clinical trials in this phase.
Biopharmaceutical Companies to Lead Global Market
In terms of end user, the global CRO services market has been divided into
medical device companies, biopharmaceutical companies, and others. The
biopharmaceutical companies segment held the largest market share in 2018 and
the trend is anticipated to continue during the forecast period. Growth of the
segment can be attributed to surge in focus of biopharmaceutical companies on
expansion, shifting from fixed costs to variable costs, and incorporation of
technological advancements in the research process.
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Contract Research Organization (CRO) Services
Market: Prominent Regions
The global contract research organization (CRO) services market has been
segmented into five major regions: North America, Europe, Asia Pacific, Latin
America, and Middle East & Africa. North America dominated the global
contract research organization (CRO) services market in 2018.
Growth of the market in the region can be attributed to strong presence of
market players in the region, high spending on research and development
activities, and increase in the number of clinical trials being conducted. The
contract research organization (CRO) services market in Asia Pacific is likely
to expand at a high CAGR from 2019 to 2027. Growth
of the market in the region can be attributed to increase in the focus by
market players on untapped markets in the region.
Strategic Acquisitions by Key Players to Propel
Global Market
The global contract research organization (CRO) services market is
consolidated, in terms of number of players. Key players operating in the
global contract research organization (CRO) services market are Laboratory
Corporation of America Holdings, IQVIA Inc., Syneos Health, Inc., Parexel
International Corporation, PRA Health Sciences, Inc., PPD, Inc., Charles River
Laboratories, Inc., Icon plc, WuXi AppTec Group, and Medpace.
These players have adopted various strategies such as acquisitions and
partnerships to expand their portfolio of services as well as geographical
presence. In June 2019, LabCorp’s Covance drug development segment
completed the acquisition of Envigo’s nonclinical contract research services
business. This acquisition enabled the former to increase its global
nonclinical drug development capabilities. As a part of this move, Envigo
acquired Covance’s research models & services business, leading to
establishment of an organization dedicated to offering a complete range of
research models.
Global Contract Research Organization (CRO)
Services Market: Segmentation
Contract Research Organization (CRO) Services
Market, by Service Type
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Market, by Therapeutic Indication
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Contract Research Organization (CRO) Services
Market, by End User
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Market, by Region
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