Healthcare Contract Research Organization Market Size, Share & Trends Analysis Report By Type (Drug Discovery, Pre-clinical, Clinical), By Service (Clinical Monitoring, Regulatory/Medical Affairs), And Segment Forecasts, 2021 - 2028

Report Overview

The global healthcare contract research organization market size was valued at USD 39.6 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 6.6% from 2021 to 2028. Increasing investment in R&D programs, preference for outsourcing activities due to time and cost constraints, and patent expiration in the healthcare sector are the key factors anticipated to drive the healthcare CRO market in the coming years. Contract research outsourcing collaborations offer cutting-edge services, and thus government organizations prefer assigning projects to contract research organizations (CROs), thereby facilitating the market growth. Increasing pressure on drug developers pertaining to clinical data management, regulatory environments, and stringent safety standards is expected to drive the demand for contract research organizations within the healthcare sector. Models such as transactional relationships, FSP/Multi-FSP, and alliances are prevalent in this market space and are being adopted by drug developers.

Healthcare and pharmaceutical companies are not only outsourcing the production of medicines but also their clinical trials. With increasing clinical trial privatization, there is a surge in outsourcing to developing countries. Many healthcare contract research organizations are now forming alliances to enhance their market presence by offering services across an extensive market space and improve the client-contractor relationship. For instance, in 2018, IQVIA formed an alliance with Box. This alliance is anticipated to help the company deliver cloud-based content management solutions to healthcare and life science companies.

In addition to collaborations, key players are in the process of acquiring other contract research organizations to gain leverage. For instance, in 2016, Charles River Laboratory International, Inc. acquired WIL Research for nearly USD 585 million. This acquisition is expected to help the company gain a foothold in the healthcare sector, particularly in the early-stage drug discovery business.

However, the CRO market has been impacted markedly like many other sectors by the global pandemic. Clinical trials have been suspended globally as patient recruitment has become strained and operating sites have been closed. The pharmaceutical sponsors have started to rethink the way to adapt the drug development paradigm to align with the new reality.

The global crisis has stressed the need for virtual trials and leveraging on technology and software solutions. Increasing adoption of machine learning-based platforms, artificial intelligence, and innovative trial designs is projected to transform the CRO landscape in the coming years. Biopharmaceutical and pharmaceutical investments in the novel and innovative therapies, for instance, regenerative medicine, are driving the R&D activity, together with drug development services. Sponsors continue to seek expertise and services for various therapeutic areas.

Type Insights

The clinical services segment dominated the global healthcare CRO market with a revenue share of 76.7% in 2020. The share is attributed to the rising number of biologics, the need for personalized medicines and orphan drugs, and the demand for advanced technologies. Factors such as technological evolution, globalization of clinical trials, and demand for CROs to conduct clinical trials are further projected to fuel the segment growth.

Outsourcing of Phase III clinical trials to healthcare contract research organizations generated the highest revenue in 2020 due to the fact that they are one of the most expensive stages of a clinical trial. Approximately 90.0% of the expenses that occurred during the clinical development of a drug stem from this phase.

The pre-clinical segment is projected to register the fastest CAGR of 8.3% during the forecast period. An increase in the number of preclinical trials involving large molecules and the increasing need to curb R&D expense is expected to contribute to the growing demand for quality preclinical CRO, thereby contributing to the segment growth.

Service Insights

The clinical monitoring segment led the market and accounted for more than 18.0% share of the global revenue in 2020. It is also anticipated to maintain its lead over the forecast period. This may be attributed to the increasing number of clinical trials and the need to monitor those studies that are creating more demand for the services.

Clinical research is being outsourced to CROs over the past decade due to various reasons, such as cost-effectiveness and technical expertise. The introduction of smart analytics along with real-time data acquisition devices is estimated to improve clinical monitoring data in the healthcare sector. Real-time data acquisition related to drug safety and toxicity enables early identification of trial errors and allows timely rectifications, such as trial re-design or termination, thereby propelling the segment growth.

The regulatory/medical affairs segment is anticipated to register the fastest growth rate of 11.2% over the forecast period. The outsourcing for regulatory affairs is expanding rapidly due to the increase in R&D activities, clinical trial applications, product registration, and drug pipeline. The increasing demand to obtain approval for new products, maintain compliance, and do more with less is projected to support the segment growth.

Regional Insights

Asia Pacific dominated the global market with a revenue share of 46.9% in 2020. The region is also anticipated to grow at a rapid pace over the forecast period. This may be attributed to the high prevalence of chronic conditions, availability of diverse populations, easy patient recruitment and retention, and establishment of regulations as per accepted standards.

Besides, favorable government support is contributing to the market growth. For instance, in February 2018, the Central Drugs Standard Control Organisation (CDSCO) drafted new rules that are estimated to reduce the time required for approval to nearly 30-60 days, thus propelling the market growth.

North America held a substantial share in 2020 owing to the highest number of trials undertaken and outsourced in the region. In addition, growing government support for R&D activities through grants and funds to research institutes and companies has driven this regional market. For instance, in 2018, the U.S. government invested USD 194.2 billion in medical and health R&D.

Key Companies & Market Share Insights

In addition to offering improved services, healthcare contract research organizations are in the process of collaborating to promote their services at the global level. For instance, in October 2019, Parexel expanded its collaboration with the Society for Clinical Research Sites (SCRS), the first and only global organization completely devoted to representing the interest of clinical research sites. The company participated as a Site Engagement Partner and led numerous significant initiatives dedicated to improving the experience of patients in clinical trials.

Besides, to keep the clinical trials going in the current pandemic, market players are adopting various models specifically for virtual clinical trials. For instance, PRA is now conducting virtual trials for their clients currently counting above 40 virtual and hybrid trials worldwide, totaling over a million patients in over 30 countries. Some prominent players in the global healthcare contract research organization market include:

• ICON Plc

• Charles River Laboratories (CRL)

• Syneos Health

• IQVIA

• GVK Biosciences Private Limited

• Covance

• Pharmaceutical Product Development, LLC (PPD)

• PAREXEL International Corporation

•  Pharmaron

• Medidata Solutions

Healthcare Contract Research Organization Market Report Scope 

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2016 to 2028. For the purpose of this study, Grand View Research has segmented the global healthcare contract research organization market report on the basis of type, service, and region:

• Type Outlook (Revenue, USD Million, 2016 - 2028)

  • 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 Outlook (Revenue, USD Million, 2016 - 2028)

  • 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, 2016 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

    • Spain

    • Italy

    • Switzerland

    • Belgium

    • Netherlands

    • Austria

  • Asia Pacific

    • India

    • China

    • Japan

    • Korea (Republic)

    • Taiwan

    • Australia

    • Indonesia

    • Malaysia

    • Singapore

    • Thailand

  • Latin America

    • Brazil

    • Mexico

    • Argentina

    • Colombia

    • Chile

  • Middle East & Africa

    • South Africa

    • Saudi Arabia

    • UAE

    • Iran

    • Israel