CRO market growing steadily but global shifts expected
Blockbuster M&As raise capabilities, but the market continues to look to emerging countries
Contract Research Organizations are key players in the drug development process, offering a range of services from early phase development to toxicology testing, clinical research services, analytical and bioanalytical testing and consultancy services.
In a recent report on the Global Market for Contract Research Organization (CRO) Services, it has been projected that the CRO industry will continue to grow steadily until 2022.
With growing therapies for orphan drugs and a rise in precision-based medicines, clinical trials are becoming increasingly complex. This is driving the need for experienced outsourcing partners who can manage combination products, risk-based monitoring, disease registries, real world evidence and medical affairs.
The report notes that the oncology segment is both the largest and the sector experiencing the most rapid growth in the CRO space. Pain management also remains a fast growing and lucrative disease area, with treatments for chronic and acute pain and studies for non-steroidal anti-inflammatory drugs driving this segment. The demand for biogenetics and in particular biosimilars will also be of key interest.
It is expected that CROs will continue to expand their capabilities and service offerings in these fields to meet market demands. Although the majority of a CRO’s revenue is obtained from clinical trials, the report predicts that discovery, pre-clinical and central lab services will all undergo growth which could account for an increased share of revenue.
The strong demand for quality CRO services has led to heightened market valuations and a number of blockbuster merger and acquisition (M&A) deals taking place. For example, in August 2017, LabCorp acquired Chiltern for $1.2 billion to become part of the company’s Covance Drug Development business.
This M&A activity has led to a few powerful companies building strong expertise across many areas of the clinical trial process. Although niche players in the field still have a critical role, key companies continue to dominate, such as Quintiles IMS, Parexel, Charles River Labs, ICON and Covance.
Clinical trials can cost upwards of $2.5 billion with timescales spanning over a decade from initial testing to Phase IV and post-market approval. Cost concerns and the need for larger and more diverse sample sizes for complex therapies are leading some companies to look to in emerging markets to fulfil their needs.
The geographical distribution of clinical trials is slowly shifting from developed nations to emerging countries, such as Central and Eastern Europe, Asia-Pacific and Latin America. These regions can present costs savings and quicker patient recruitment as they have access to more diverse population samples with greater disease variations.
In efforts to limit costs, others are also looking at how to reduce study duration by experimenting with new, adaptive study design protocols. Recently, the FDA’s Janet Woodcock suggested the industry should move towards platform trials with master protocols. This would allow for the evaluation of multiple treatments and diseased within the same trial, using decision algorithms to allow therapies to enter and exit the platform. This would limit costs; however, it would require competitors to begin working together.
The rise of technology and artificial intelligence has also been touted as a key driver for the industry and a way to reduce costs. Currently a number of solutions exist in the field, from streamlining the documentation and site management, to pre-qualifying participants and maintaining patient engagement and records. Although the technology requires an upfront investment, it could lead to crucial savings through further use.
Interested in this topic? You may also be interested in reading our report on AI in the pharmaceutical market.