Clinical Research Organizations Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Clinical Research Organizations Category Overview

“The clinical research organizations category’s growth is driven by the increasing healthcare expenditure, rise in the number of drug development activities, technology advancement, and increasing outsourcing & globalization of clinical trials”

The clinical research organizations category is expected to grow at a CAGR of 12.2% from 2023 to 2030. Factors such as increasing healthcare expenditure, rise in the number of drug development activities and increasing globalization of clinical trials are fueling the category growth. Rising healthcare costs lead to more funding for clinical research and development, which in turn creates more clinical trials and demand for CROs. In 2022, high-income countries account for nearly 80% of global health spending, with the US alone accounting for more than 40%.

This category size was estimated at USD 80.6 billion in 2022. One of the key trends is the increasing healthcare expenditure by organizations. Spending on healthcare-related goods and services, such as prescription drugs, hospital stays, medical equipment, and other costs, is referred to as healthcare expenditure. It comprises both public and private healthcare spending, such as that made by governments, insurance providers, and people themselves.

The regulatory environment plays a significant role in the clinical research organization market. The requirements for conducting clinical trials vary by country and region, and these regulations can have a major impact on the demand for CRO services, the cost of clinical trials, and the profitability of CROs. Government policies, such as regulations on quality standards, can also have a significant impact on the CRO market. For example, the Drugs and Cosmetics Act (1940) in India regulates the import, manufacture, and distribution of drugs and cosmetics, and ensures that these products are safe, effective, and meet essential quality standards.

The growth of technology advancement and outsourcing of clinical trials are other key drivers for this category. The pharmaceutical and biotechnology sectors now frequently outsource clinical trials. Clinical trials are intricate and demand a lot of resources, such as specialized tools, facilities, and employees. To cut costs, reorganize business processes, and boost productivity, many pharmaceutical and biotech businesses outsource their clinical trial activities to clinical research organizations. As more pharmaceutical companies outsource their clinical trials, the demand for CROs rises.

In addition, the growing requirement like an increased focus on personalized medicine and demand for specialized services are expected to aid clinical research organization category expansion.

Supplier Intelligence

“How is the nature of the clinical research organizations category? What are the initiatives taken by the suppliers in this category?”

The global clinical research organizations category is fragmented with the presence of several market players. Organizations aiming to grow their consumer bases are in severe competition with each other. To grow their market share, firms in the industry are adopting crucial strategies like research and development, acquisitions, partnerships, and regional expansion. 

• In March 2023, ICON plc announced that it will acquire Syneos Health for $3.3 billion. This acquisition will create a global clinical research organization with over 15,000 employees and a presence in over 100 countries.

Big CROs engage with technologically advanced suppliers that provide the necessary equipment for clinical trials. The presence of many such equipment suppliers across different geographies decreases the bargaining power of suppliers.

Key suppliers covered in the category: 

• Asymchem Laboratories (Tianjin) Co., Ltd

• Charles River Laboratories.

• Dalton Pharma Services

• ICON plc

• IQVIA Inc

• Pharmaron Beijing Co., Ltd.

• Piramal Enterprises Ltd.

• Sun Pharmaceutical Industries Ltd.

• Syneos Health

• Thermo Fisher Scientific Inc.

Pricing and Cost Intelligence

“What are some of the major cost components in clinical research organization? Which factors impact the cost of clinical research organization?”

The major cost components in this category can vary depending on the specific services offered and the scope of the trial. The cost of clinical research organizations can be broken down into two main categories Capex costs and Operational costs. Capex costs are those costs that are incurred in the initial setup and development of the CRO, such as the cost of hiring staff, purchasing equipment, and developing software. Operational costs are those costs that are incurred on an ongoing basis to run the CRO, such as the cost of data management, site monitoring, and regulatory compliance.

The following chart provides various costs incurred in this category. The major cost heads are shown below:   

This category has various factors that impact their costs. These include the size and complexity of the trial, the number of sites involved, regulatory requirements, patient population, specific services offered, geographic location, technology use, experience, and quality of the CRO. Larger and more complex trials require more resources, time, and money, while trials with multiple sites require more management and monitoring. Rare diseases or patient populations with special needs also increase the cost of CROs. The use of technology, such as electronic data capture systems, can reduce costs. Experience also plays a role in the cost of CROs, as more experienced CROs can conduct trials more efficiently and effectively, leading to lower costs.

Sourcing Intelligence

“Which countries are the leading sourcing destination for clinical research organizations?”

China, India, and the U.S. are the largest regions in the global Clinical Research Organizations market. India is a major hub for CRO development, accounting for over 20% of the global market. The country has a large pool of skilled and low-cost scientific & clinical staff, which makes it an attractive destination for CROs.

The United States is home to many of the world's leading pharmaceutical companies, and these companies need CROs to help them conduct clinical trials. It also has a well-developed regulatory environment, which is important for CROs that need to comply with strict regulations.

• In 2021, there were over 12,000 clinical trials underway in the United States, and this number is expected to continue to grow in the coming years. As the number of clinical trials increases, so too does the demand for CRO services. 

In terms of clinical research organization sourcing intelligence, a hybrid engagement model is used for this category because it allows clients to maximize their own strengths and core competencies by utilizing the best of each outsourced type. A biotech company, for example, may need to hire a few full-time staff to help with study preparation until it is ready to outsource a project or project. Alternatively, a client who has recently generated its first oncology product in-house but lacks substantial internal knowledge in running an oncology trial may begin with a full-service outsourcing (FSO) model and progress to a functional service provider (FSP) model as internal competence grows. Another advantage of selecting a hybrid model from a CRO that offers both FSO and FSP services is that the metrics are centralized. As a result, process enhancements motivated by those KPIs can be quickly and effectively implemented by the client and CRO. To find the best model for each project and identify areas for improvement, several important performance and quality indicators can be used.

“In the approved provider model, the supplier meets the predefined set of qualifications, quality standards, and other criteria.” 

The approved provider model offers a number of advantages for sponsors. It provides a level of assurance that the CRO has the necessary expertise and experience to conduct the clinical trial effectively. It can help to streamline the contracting process, as the sponsor does not need to go through a competitive bidding process also it can help to build trust and collaboration between the sponsor and CRO, as they are working together on a long-term basis.

The approved provider model in this category offers numerous advantages, including ensuring the CRO's expertise and experience, simplifying the contracting process, building trust and collaboration, improving communication, and increasing efficiency. The pre-existing relationship between the sponsor and CRO ensures a high standard of clinical trial conduct, especially in multi-country trials. Additionally, the model allows for economies of scale, reducing costs and reducing time and effort spent on evaluating multiple CROs.

The Clinical Research Organizations Procurement Intelligence report also provides details regarding day one, quick wins, portfolio analysis, key negotiation strategies of key suppliers, and low-cost/best-cost sourcing analysis. 

Clinical Research Organizations Procurement Intelligence Report Scope