Global Market Overview
The new report from business intelligence provider Visiongain offers an updated outlook for the global clinical research organizations (CROs) market. Visiongain assesses that the clinical research organizations (CROs) market will generate revenues of $38.0 billion in 2020. Contract research organizations (CROs) have become essential to pharmaceutical, biotech and other medical-related industries by supporting their clients’ efforts to test, refine and market the latest pharmaceuticals and medical devices through clinical trials.

Driving Factors in the Global Market

Increasing Complexity of Clinical Trials
Complexity is a growing driver of R&D outsourcing due to the industry focus on specialty indications such as oncology, autoimmune disease and rare diseases, which tend to require more complicated trials. Trial complexity is correlating increasing in terms of the amount of data collected per patient, the numbers of studies and tests performed, and the number endpoints included. Clinical Trials are typically taking place across a larger number of countries at a growing number of investigative sites and involve more procedures per trial. Additionally, the eligible criteria to enter a study have become more stringent, with a larger criterion to be considered eligible. Randomization is necessary to produce statistically significant results, and genetic populations across different parts of the world are found to react differently to compounds, which is one reason studies need to be conducted globally. The growing demands of conducting trials have increased the cost per study over the years, but this trend has at least been partly mitigated by better collection and understanding of data and analytics. This has helped to shape more adaptive trials designs that produce more detailed metrics as the studies are underway rather than post-study analysis.

Small and Mid-Sized Biopharma Innovation
A vast amount of innovation is emanating from small and mid-sized biopharma companies. An estimated 60% to 80% of the intellectual property in the industry resides with these smaller companies. These small, biopharma companies are often funded to take products further down the development pipeline, before investors look to monetize their investment. Many investors are finding that the speed of innovation is often inversely proportionate to the size of the company. The reality of less bureaucracy and overhead allows smaller biopharma companies to operate more efficiently and gain their needed capacity from strategic CRO partnerships.

Increased Competition through the Resurgence of the Generic Drug Market
The trend toward more generics on the market will benefit CROs. First, pharma companies and CROs have generally already reaped the benefits of branded drugs and when their patents run out, generics entering the market increase demand for clinical trial services and benefit end-users through lower prices and greater availability. In addition, lower drug prices for generics are a reflection of simplified, lower-cost approval process in addition to increased competition. As a result, profit margins for the clinical work and corresponding end-use drug pricing are typically only slightly lower for generics than for branded drugs.

Pharmas are grappling with the dual challenge of developing breakthrough innovations while also reducing development cost. As a result, despite continued efficiency processes and technological improvements throughout the clinical trial process, the average cost of new drug development continues to rise. The average cost from initial pre-trial development to finalization of market approval for a new drug now exceeds $2.5 billion. The average cost of development has been increasing dramatically over the last decade and despite determined industry-wide efforts to curb R&D expenditures, the cost of clinical trials continues to rise dramatically.

Segmental Insights
Global clinical research organizations market was valued at $34.9 billion in 2019 and is projected to grow at a CAGR of 9.5% during the forecast period 2020-2030. Global market by service was led by drug discovery segment with market value of $17.3 billion in 2019 and is expected to lead the market during forecast period. This segment is expected to grow at the highest CAGR of 10.0% from 2020-2030 followed by pre-clinical & clinical segment with CAGR of 9.6% during same forecast period. CROs are generally meeting the complex demands being placed on them by their pharma sponsors as they continue to penetrate deeper into R&D budgets and grow at a near double-digit pace. Several approaches by CROs are making them more efficient, enabling them to better serve their pharma customer base.

Global market by applications was led by oncology segment with market value of $14.0 billion in 2019 and is expected to lead the market during forecast period. Cardiology segment is expected to grow at the highest CAGR of 10.1% from 2020-2030 followed by cardiology segment with CAGR of 9.8% during same forecast period. The dominant players in the industry are Quintiles IMS, Covance, PAREXEL, Charles River Labs and ICON. Mergers and acquisitions by these and other larger companies in this space continue at an unprecedented pace; high valuations along with the increasing need to become complete service providers are driving this trend.

Notes for Editors
If you are interested in a more detailed overview of this report, please send an e-mail to sara.peerun@visiongain.com or call her on +44 (0) 20 7549 9987.

About Visiongain
Visiongain is one of the fastest growing and most innovative independent media companies in Europe. Based in London, UK, Visiongain produces a host of business-to-business reports focusing on the automotive, aviation, chemicals, cyber, defence, energy, food & drink, materials, packaging, pharmaceutical and utilities sectors.

Visiongain publishes reports produced by analysts who are qualified experts in their field. Visiongain has firmly established itself as the first port of call for the business professional who needs independent, high-quality, original material to rely and depend on.