Contract Research Organization Market: Current Trends, Business Opportunities, Challenges & Global I
Author : Diksha Pote | Published On : 08 Sep 2021
Laboratory Corporation of America Holdings, QuintilesIMS, Parexel International Corporation, Pharmaceutical Product Development, LLC, INC Research LLC, PRA Health Sciences, Inc, ICON plc and others are some of the prominent players at the forefront of competition in the Global Contract Research Organization market and are profiled in MRFR Analysis.
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Global Contract Research Organization Market - Overview
Contract research organizations undertake research on a contract basis from their client. The rights to the work are owned ultimately by the clients who may not have the technical capabilities and capacities to perform the task on their own. Due to the large number of patents expiries, drug companies are under pressure to replace the revenue loss. The rising costs of drug development has put pressure on profit margins. On the other hand there has been an exponential growth in the skills of the contract research organizations. Thus contracting out has become an increasing attractive proposition for both clients and the contract research organization.
Additionally many governments have increased funding for research and development to combat diseases such as cancer, Alzheimer's etc. Large tax deductions for research coupled with increasing partnerships is also a big driver for the CRO market.
The level of R&D outsourcing will expand significantly in preclinical & clinical segment. The highly specialized nature of the segment coupled with the increasing stringency of the regulations has led to the shift. The need to reduce the costs of the clinical studies especially the phase four studies is another reason for the need to contract out the service. The Contract Research Organization Market Overview Size is in a position to bundle many contracts which reduces the costs of the study due to economies of scale. Contracting out clinical tests also eliminates the need to maintain elaborate equipment and personnel’s by the client.
Another reason is the growing importance of the supply chains and partnerships for risk sharing and cost sharing. Thus contracting out is done for quality improvement, increasing efficiency, reducing time to market a new product etc. Thus maintaining competitive advantage in today’s cut throat market has become imperative. Increasing need for highly advanced products such as targeted therapies for cancer has led companies to take advantage of contracting out their specialized needs.
However the contract research market also is facing problems such as high costs and scarcity of labour. The high value of intellectual property associated with contracting out research coupled with the fear of losing key in-house research capabilities is contracting the market. Clients are also increasingly disposed and selective towards contract researcher organizations. Contract research providers acting as tactical suppliers are losing favour, while those providing strategic partners are getting favoured. Customer flexibility and joint development of products are being favoured leading to creative contractual agreements.
Post marketing services such as regulatory affairs of drugs is becomes an increasingly specialized segment which has been moving speedily towards data management and information technology. The post marketing services will expand the CRO market due to increasing stringency of regulations and the huge cost associated with the product recalls. This has led to successful marriage between the healthcare and information technology industry. The CRO market is led by America region notably the US. The reason for the dominance of US is the large number of pharmaceutical and biotechnological companies based in the US. The high technological uptake of the US coupled with greater demand and incentives for novel advanced products is also an important factor for the dominance of the US.
Global Contract Research Organization Market - Regional Analysis
The global CRO market is growing rapidly and it is expected it will grow with the same pace in near future. The global CRO market is further divided into 4 major region which includes the Americas, Europe, Asia-Pacific and Middle East & Africa. Americas market accounts the largest market for in 2016. While Asia-Pacific market is the fastest growing region. The factors leads to the market growth includes the growing pharmaceutical industry with companies grabbing opportunity to expand their presences all around the globe, increasing new players entering in the CRO market with resulting in high competition between the CROs and improved regulatory environment. Furthermore the low cost in developing countries for conducting clinical trial is around 40 to 60% less than compared to developed countries which is further influencing the growth the market in country.
On the other hand, expanding rivalry, quality concerns and low infrastructure in tier II organisations are a few components that hinder the development rate of the CRO market. Moreover Dependability and consumer loyalty in clinical trials data is deficient, enormously affecting the CRO market. As more settled CROs keep on growing, with dependable information and entrenched customers, the effect of this limitation is expected to reduce.
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