The global life sciences BPO market was valued at USD 195 billion in 2015. The high growth is attributed to certain key factors, which include the rising costs of drug development, pre-clinical research, clinical trials, and post-marketing surveillance.
The life sciences sector is witnessing paradigm changes over the past few years, due to the patent cliff, the depleting product pipeline, regulatory constraints and these factors are expected to positively impact the market growth over the forecast period.
Increasing prevalence of various diseases, and the rising geriatric population are high impact factors boosting the usage of various drugs and devices. To introduce a new drug into the market, it requires a minimum investment of USD 1.5 to 2 billion and the timelines can vary from 7-12 years. Many pharmaceutical organizations prefer outsourcing their strategic and non-strategic processes to external vendors in order to improve the return on investment, maintain profitability, maintain product quality and cost, and with the objective to meet capacity constraints.
North America life sciences BPO market, by services, 2013 - 2024 (USD Billion)
The life sciences BPO market is segmented into pharmaceutical outsourcing, medical devices outsourcing, contract sales and marketing outsourcing, and others. The pharmaceutical outsourcing is further segmented into contract manufacturing services and contract research services. The contract manufacturing services include the Active Pharmaceutical Ingredient (API) manufacturing, finished dosage manufacturing, and packaging outsourcing; and the contract research services include drug discovery, pre-clinical studies, clinical trials, regulatory, and pharmacovigilance services.
In 2015, the API segment accounted for the maximum share of over 70%, and the finished dosage segment is expected to have the highest CAGR of 7% over the forecast period. The market trends indicate a significant shift from low-value services such as API and finished dosage manufacturing, post-marketing surveillance, device component manufacturing to complex and specialized services such as lead optimization, Novel chemical Entity (NCE) development, pre-clinical testing, clinical trials, and custom synthesis services.
The medical devices segment is segmented into contract manufacturing services and contract research services. In the medical devices sector, the outsourcing of services such as product design, product integration, pre-clinical and clinical investigations, and regulatory services are gaining significant traction; these developments are expected to significantly boost the life sciences BPO market over the forecast period.
In the medical devices CRO segment, product design, and testing services accounted for the majority revenue of USD 8.4 billion in 2015. However, the product implementation services are expected to register the maximum CAGR of over 13% over the next nine years.
In 2015, North America accounted for the majority share of nearly 33% in global life sciences BPO market. This high share of the North America market is attributed to the high healthcare expenditures, the rising drug and device manufacturing costs, marketing expenses, the rising number of reimbursement claims, data processing and data analytics services. The presence of several life sciences, pharmaceuticals, biotech, and medical devices organizations in this region favor the rapid expansion of onshore and offshore outsourcing.
Asia Pacific is expected to grow at the maximum CAGR of 11% over the forecast period. India and China are the key hubs for the life sciences outsourcing market. India and China account for the majority of the active pharmaceutical ingredient (API) and finished product exports across the globe. The presence of a strong scientific community, the maximum number of U.S.FDA authorized manufacturing sites (outside the U.S.), favorable government initiatives such as “Make in India”, are amongst the key factors expected to drive the life sciences BPO market over the forecast period.
Moreover, the abundant availability of low-skilled and high-skilled labor, land and other resources in this region provide a competitive advantage in terms of production costs and back-end processing of several services.
Competitive Market Share Insights
The life sciences BPO market is highly competitive and diverse in nature with many numbers of small, medium, and large scale enterprises vying for the market share. The market is majorly dominated by players such as Accenture plc, Anthelio Healthcare Solutions, Boehringer Ingelheim GmbH, Catalent, Inc., Covance, Inc., Genpact Ltd., ICON plc, Infosys Limited, Lonza Group, PAREXEL International Corporation, Quintiles Transnational Corporation, and International Business Machines Corporation. However, some players operate in exclusive segments and the others maintain a diversified portfolio to mitigate the market risks and maintain profitability.
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