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, 2019 - 2025

Industry Insights

The global healthcare Contract Research Organization (CRO) market size was valued at over USD 34.83 billion in 2018 and is expected to expand at a CAGR of over 6.6% over the forecast period. The key reasons for the rapid growth include increasing investment in R&D programs, preference for outsourcing activities due to time and cost efficiency, and patent expiration. The contract research outsourcing collaborations offer innovative services and thus government organizations prefer assigning projects to the CROs.

Healthcare CRO market has witnessed rapid growth in recent years owing to an increase in costs pertaining to clinical trials ranging from drug discovery to post marketing approval. Owing to the fact that large numbers of molecules fail in clinical trials, drug makers and sponsor companies are outsourcing services to mitigate financial risks.

Increasing pressure on drug developerspertaining to clinical data management, regulatory environments, and stringent safety standards are expected to drive demand over the forecast period. Models such as transactional relationships, FSP/Multi-FSP, and alliances being adopted by the drug developers.

Several CROs are now forming alliances to enhance market presence by offering service across an extensive market space and improving the 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. Syneos Health was established through the merger of inVentiv Health and INC Research in August 2017. The merger of these two well-established companies is anticipated to flourish over the forecast period and build expertise in biopharmaceutical outsourcing.

Type Insights

Based on type, the healthcare Contract Research Organization (CRO) market has been segmented into drug discovery, pre-clinical and clinical. Drug discovery is further segmented into target validation, lead identification, and lead optimization. Clinical led the market in 2018 and it is further segmented into Phase I, Phase II, Phase III, and Phase IV trial services. Phase III trial led with revenue estimated at over USD 14 billion in 2018, owing to the fact that this type of trial requires thousands of patients and is one of the most expensive segments comprising approximately 90% of the expenses during drug development.

Pre-clinical trials involve testing on animals 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

On the basis of service, the market is classified into 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, and others. The clinical monitoring service held the largest market share in 2018 while 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, and relaxation of the burden on management among others. The changing market trends compel pharmaceutical companies to decrease their fixed costs and outsourcing proves to be an effective solution. The rate of the protocol process increased by 57% from 2000 to 2011 and, simultaneously, patient enrollment in clinical trials decreased by 18%.

Regulatory bodies demand detailed methodologies and results for approval adding to the tediousness of the process. In addition, increased awareness among payers who demand information about the biologics of a new drug. These trends are challenging the pharma companies and CROs to provide an extensive solution.

Regional Insights

Asia Pacific held the dominant market share in terms of revenue in 2018. Large and diverse patient pool, improving economic conditions, development in healthcare infrastructure are few factors expected to drive the regional growth. Few factors responsible for the rapid growth of the Asian CRO market are increasing interest of the western organization in exploring new opportunities and expanding their geographical foothold.

U.S. spends the highest healthcare per capita with USD 30 billion funded by the National Institute of Health (NIH) for research in 2012. Life sciences companies are focusing on minimizing R&D costs. Thus, sponsors face challenges pertaining to cost-cutting and time management due to an increased convolution of research methodologies.

North America ranks first in the number of clinical trials performed. However, increasing regulatory requirements and long approval timelines have shifted the focus of companies to emerging market players. Majority of outsourcing activities are from North America. Cost is another factor influencing the outsourcing of clinical trials to other research organizations.  

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 a strategic alliance leading to advancement in the way biopharmaceutical companies generate evidence and apply insights to drive research. This transaction 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 to link 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. The company also 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 gates for government-sponsored research opportunities.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, & country levels and provides an analysis of industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global healthcare Contract Research Organization (CRO) market report on the basis of type, service, and region:

• Type Outlook (Revenue, USD Million, 2014 - 2025)

  • 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, 2014 - 2025)

  • 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 - 2025)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

    • France

  • Asia Pacific

    • Japan

    • China

    • India

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa

    • South Africa