Healthcare Contract Research Outsourcing (CRO) Market Analysis By Type (Pre-clinical, Clinical), By Trial (Phase I Trial Services, Phase II Trial Services, Phase III Trial Services, Phase IV Trial Services) And Segment Forecasts To 2022

Published: January 2016 | Report Code: 978-1-68038-688-2 | Report Format: PDF

Industry Insights

Global healthcare Contract Research Outsourcing (CRO) market size was valued at over USD 27.0 billion in 2014 and is expected to grow at a CAGR of over 6.0% over the next seven years. The factors that contribute to growth include increasing R&D undertaken, patent expiration, increasing outsourcing activities to save time and cost, the CRO collaborations to offer cutting edge services, and the government organizations assigning projects to the CROs.

Leading players such as Roche, Novartis, J&J, and Merck spend huge amounts of their revenue in R&D activities. For instance, in 2013, figures enlist that Roche invested 19% (USD 10 billion), Novartis 16.8% (USD 9.9.billion), J&J 11.5% (USD 8.2 billion), and Merck 17% (USD 7.5 billion) of their revenue respectively in R&D.

Many CROs are now forming alliances to enhance market presence by offering service across an extensive market space, and improve client-contractor relationship. For instance, in May 2014, ClinDatrix, Inc. collaborated with six other CRO’s to offer services to multinational clinical trials. ClinDatrix will provide its service portfolio such as Electronic Data Capture (EDC), SharePoint/Montrium, Oracle Argus Safety Systems, and LORENZ DocuBridge electronic Common Technical Document (eCTD).

In addition to collaborations, key players are in the process of acquiring other CROs, to gain leverage. In February 2014, Cinven Ltd. confirmed its acquisition of Medspace Inc. for USD 915 million.

CROs are also appointed by the healthcare associations with the contract to integrate patient care and technology. In October 2015, the American Society of Anesthesiologists (ASA) signed an outsourcing agreement with ArborMetrix to provide them with its data management platform. ASA wanted its National Anesthesia Clinical Outcomes Registry (NACOR) to be scalable anticipating the future demand.

U.S. Healthcare CRO Market, by Type, 2012-2022, (USD Million)

U.S. Healthcare CRO Market

Type Insights

The healthcare CRO market according to type of services is divided into pre-clinical and clinical trials, where the latter accounted for the largest share in 2014. Pre-clinical trials involve testing on animals in order to achieve clinical trial approval on human subjects. Clinical trial approvals are more complicated and lengthy processes as they involve trial on human subjects and ethical consent.

In January 2015, Novartis appointed Qualcomm as its partner. Through Qualcomm Life's 2net platform, Novartis will achieve global connectivity for collecting medical device data during the process.

Trial Insights

Phase III trial dominated the healthcare CRO market in 2014 with revenue estimated at over USD 11.0 billion in 2014. The segment dominated owing to the fact that it requires thousands of patients and is one of the most expensive segments comprising of approximately 90% of the expenses occurred during clinical development of a drugs.

Regional Insights

The North America healthcare CRO market was the largest in 2014, owing to largest number of trials undertaken and outsourced in the region. In addition, the U.S. Government supports research by funding various institutes, which grant research funds. For instance, in January 2015, the U.S government announced an investment of USD 215 million for precision medicine initiative. The investment is for the NIH, National Cancer Institute (NCI), and FDA.

Asia Pacific is the fastest growing regional segment with CAGR estimated at over 7% owing to the availability of diverse population and patient recruitment ease along with retention and the establishment of regulations as per accepted standards. In November 2014, the Chinese authorities set new requirements for running these trials in hospitals. According to this new change, the sponsor carrying out the trial should initially submit all details to the hospital to get it approved and file for approval within 30 days.

The Asian CRO market is expected to grow at a rapid rate due to the increasing quest of global companies to explore new avenues and to expand their respective business enterprise. Moreover, growing incidence rate of “Western” diseases such as hypertension, diabetes mellitus and dyslipidemia due to change in sedentary life style and dietary pattern is further expected to propel the growth in the coming years.

Competitive Market Share Insights

Key market contributors are Quintiles, Covance, Pharmaceutical Product Development, LLC (PPD), Parexel, Charles River Laboratories (CRL), ICON, Plc, inVentiv Health and Medidata Solutions

In October 2015, Quintiles and IMS Health formed strategic alliance leading to advancement in the way biopharmaceutical companies generate evidence and apply insights to drive research. In October 2015, Laboratory Corporation of America Holdings (LabCorp) launched the FDA approved diagnostic test named PD-L1 in extension of OPDIVO for Non-Small Cell Lung Cancer (NSCLC).

In November 2015, LabCorp acquired Covance for USD 6 billion, thus leveraging on its huge and valid clinical trial database. This acquisition will provide complementary services to pursue strategic opportunities in drug development.

Key question answered by the report
  • What was the market size from 2013 to 2015?
  • What will be the market growth till 2024 and what will be the resultant market forecast in the year?
  • How will the market drivers, retraints and future opportunieties affect the market dynamics and a subsequent analysis of the associated trends?
  • What segment and region will drive or lead market growth and why?
  • A comprehensive mapping of the competitive landscape and the market participants behavior.
  • What are the key sustainability strategies adopted by market players? An in-depth analysis of these strategies and their impact on competition and growth.
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