Healthcare Contract Research Organization (CRO) Market Size, Share & Trends Report

Healthcare Contract Research Organization (CRO) Market Size, Share & Trends Analysis Report By Type (Drug Discovery, Pre-Clinical, Clinical), By Service, By Region, And Segment Forecasts, 2018 - 2024

  • Published Date: Apr, 2018
  • Base Year for Estimate: 2016
  • Report ID: 978-1-68038-688-2
  • Format: Electronic (PDF)
  • Historical Data: 2014 - 2016
  • Number of Pages: 110

Industry Insights

The global healthcare Contract Research Organization (CRO) market size was valued at over USD 30 billion in 2016 and is expected to grow at a CAGR of over 6.5% over the forecast period. The key reasons for the rapid growth include increasing investment in R&D programs, preference to outsourcing activities due to time and cost efficiency, and patent expiration. The contract research outsourcing collaborations offer cutting edge services and thus government organizations prefer assigning projects to the CROs.

Increasing drug developers’ pressure pertaining to clinical data management, regulatory environments and stringent safety standards is expected to drive demand over the forecast period. Models such as transactional relationships, FSP/Multi-FSP and alliances are present in this market space and are being adopted by the drug developers.

U.S. healthcare CRO market

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.

Type Insights

The market has been segmented into drug discovery, pre-clinical and clinical based on type of service. Drug discovery is further segmented into target validation, lead identification, and lead optimization. Clinical dominated the market in 2016 and is further segmented into segments such as Phase I, Phase II, Phase III, and Phase IV trial services. Phase III trial dominated the clinical market in 2016 with revenue estimated at over USD 12.0 billion in 2016. 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.

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.

Service Insights

The healthcare contract research outsourcing market by service is classified as project management/clinical supply management, data management, regulatory/medical affairs, medical writing, clinical monitoring, quality management/ assurance, bio-statistics, investigator payments, laboratory patient, site recruitment technology & others. The clinical monitoring service segment held the largest market share in 2016 and regulatory/medical affairs is expected to grow at a rapid rate during the forecast period.

For almost past 10 years, clinical research is being outsourced to CROs due to various reasons such as cost effectiveness, expertise, relaxation of burden on management, etc. The changing market trends compel pharmaceutical companies to decrease their fixed costs and outsourcing proves to be an effective solution. The rate of protocol process increased by 57% from 2000 to 2011 and, simultaneously, patient enrollment in clinical trials decreased by 18%. Furthermore, regulatory bodies demand detailed methodologies and results for approval adding to the tediousness of the process. In addition, there is increased awareness amongst payers who demand information about the biologics of a new drug. These trends are challenging for the pharma companies and CROs provide an extensive solution to these challenges.

Regional Insights

The North America healthcare CRO market was the largest in 2016, owing to largest number of trials undertaken and outsourced in the region. In addition, the U.S. Government supports R&D activities by granting research funds to the institutes. 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.

Global healthcare CRO market

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.

Few factors responsible for the rapid growth of the Asian CRO market are increasing interest of western organization to explore new opportunities and to expand their geographical foothold. Furthermore, growing incidence rate of lifestyle diseases such as diabetes mellitus, hypertension, and obesity due to increase in sedentary life style and changing diet habits is further expected to propel the growth in the coming years.

Healthcare CRO 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. The merger with IMS was the biggest event in the contract research outsourcing industry and reinstated the weightage of the companies. Quintiles leverages on IMS’s script data to provide holistic patient recruitment services. Quintiles uses the IMS database to design targeted and complex trials. The real world evidence capabilities of both companies, in unison, are even more powerful, allowing them to generate revenues faster than their financial backlog.

In November 2015, LabCorp acquired Covance for USD 6 billion, thus leveraging on its huge and valid clinical trial database. This acquisition provided complementary services to pursue strategic opportunities in drug development. Covance’s strong central lab network enables them in linking sites to patients. Its expertise in diagnostics makes it a new and strong drug development provider. The wide-ranging client portfolio, ranging from pharma to biotechnology companies also increases its exposure.

ICON plc leverages on IBM Watson computing for patient recruitment and engagement. Also, the company has access to PMG Research’s site network and global alliances with strong presence in Asia, which it maintains with acquisitions and alliances with existing players in the region. The company’s acquisition of Clinical Research Management opened its gates for government-sponsored research opportunities.

Report Scope

Attribute

Details

Base year for estimation

2016

Actual estimates/Historical data

2014 - 2016

Forecast period

2017 - 2024

Market representation                                                 

Revenue in USD Million and CAGR from 2017 to 2024

Regional scope

North America, Europe, Asia Pacific, Latin America, Middle East & Africa

Country scope

U.S., Canada, Germany, UK, France, China, Japan, India, Brazil, Mexico, South Africa

Report coverage             

Revenue forecast, competitive landscape, growth factors and trends

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Segments Covered in the Report

This report forecasts revenue growth at global, regional, & country levels and provides an analysis on industry trends in each of the sub-segments from 2014 to 2024. For the purpose of this study, Grand View Research has segmented the global healthcare CRO market on the basis of type, service, and region:

  • Type (Revenue, USD Million, 2014 - 2024)

    • Drug Discovery

      • Target validation

      • Lead identification

      • Lead optimization

    • Pre-Clinical

    • Clinical

      • Phase I Trial Services

      • Phase II Trial Services

      • Phase III Trial Services

      • Phase IV Trial Services

  • Service (Revenue, USD Million, 2014 - 2024)

    • Project Management/Clinical Supply Management

    • Data Management

    • Regulatory/Medical Affairs

    • Medical Writing

    • Clinical Monitoring

    • Quality Management/ Assurance

    • Bio-statistics

    • Investigator Payments

    • Laboratory

    • Patient and site Recruitment

    • Technology

    • Others

  • Regional Outlook (Revenue, USD Million, 2014 - 2024)

    • North America

      • U.S.

      • Canada

    • Europe

      • Germany

      • UK

      • France

    • Asia Pacific

      • Japan

      • China

      • India

    • Latin America

      • Brazil

      • Mexico

    • Middle East & Africa

      • South Africa

Key questions answered by the report
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