Global Healthcare CRO industry is expected
to reach USD 45.2 billion by 2022, according to a new report by Grand View
Research Inc. With the increasing number of patents expiring, increasing number
of partnerships to identify biologics and new compounds and growing R&D
costs, drug maker and sponsor companies are under pressure to replace the
revenue loss specifically due to generics, which has further made drug
development more expensive and complex.
Moreover,
owing to the increasing incidence rates of chronic diseases such as cancer, Alzheimer’s
and other infectious diseases in children, government funding has increased,
which have led to increasing R&D activities.
For
instance, in January 2015, the U.S. announced an investment of USD 215 million
for precision medicine initiative. The investment was broken up for NIH (USD
130 million), NCI (USD 70 million), and FDA (USD 10 million).
In addition,
growing pressure on industry players to follow stringent timelines has
increased the demand for outsourcing of research activities. Even government
organizations are outsourcing their clinical trial activities to CROs so that
they can carry out the clinical trials with the required infrastructure,
expertise, and minimize cost and timelines. In 2015, the Canadian Federal
Budget made an investment of USD 1.33 billion for the Canada Foundation for
Innovation (CFI).
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Further key findings from the study suggest:
- Clinical trial services dominated the market in 2014 owing to the fact that it comprises of four elaborate phases including human subjects. The increasing complexities in R&D trends have raised the need for expertise, thereby shortening the time required to commercialize the molecule.
- In January 2016, Charles River Laboratories International, Inc. entered into a definitive agreement to acquire WIL Research for approximately USD 585 million. The acquisition is expected to strengthen Charles’ ability to partner with global clients.
- The high R&D spending in oncology has also fuelled the need for healthcare CROs. Realizing this demand, France-based laboratory, XenTech increased its capacity of its animal care to 50% along with increasing collaborative research projects.
- North America was the largest regional market with revenue share estimated at over 40% owing to the presence of global industries, which invest maximum of their revenue in research activities. In addition, many academic institutes receive grants to undertake these activities. For instance, in July 2015, the University of Toronto received USD 1.5 billion under the Medicine by Design initiative.
- Europe was the second largest market in 2014. This is attributed to the tax benefits offered to the large and small-scale companies to promote more CRO activities. The large companies can claim 30% deducible from the income of their R&D expenditure. In case of small and medium sized enterprises, it is 225% for the R&D expenditure.
- Asia Pacific is the fastest growing industry due to the reduced cost it offers in comparison to the U.S and other developed economies. Increasing incidence rate of chronic and lifestyle diseases such as heart disease and diabetes coupled with ease in patient recruitment and available expertise for the clinical trials are few drivers propelling growth of the Asian healthcare CRO market.
- China and India are projected to witness tremendous growth in the CRO market owing to their treatment naïve patient pool coupled with disease prevalence rate. Furthermore, genetically diverse population, highly qualified English-speaking investigators, well equipped hospitals are other opportunities offered by India for global clinical trials.
- In July 2014, Catalent Pharma Solutions opened its oral formulation development lab in Japan. The laboratory, which opened in September, also expanded its CMO manufacturing capacity in the same lab.
- CROs are in a process of continuously improving their portfolio by integrating services with technology. This enables them to save more on time and deliver efficient and desired results to the clients. In October 2015, PPD joined hand with Oracle to use its cloud technology named Oracle Siebel CTMS.
- In addition to offering improved services, CROs are in the process of collaborating to promote their services at a global level. For instance, in May 2014, ClinDatrix, Inc. collaborated with six other CRO’s to offer services to multinational clinical trials. The collaboration will strengthen its presence globally apart from the U.S. and Canada.
- Major contributors are Quintiles, Covance, Pharmaceutical Product Development, LLC (PPD), Parexel, Charles River Laboratories (CRL), ICON plc, inVentiv Health, Medidata Solutions, and Theorem Clinical Research. According to the US database of trials, Parexel, Quintiles and PPD are involved in large number of collaboration with the sponsors pertaining to clinical trials.
- In April 2015, Pfizer selected PPD as its third most preferred CRO. PPD has assisted Pfizer in extending its global reach that is expected to advance Pfizer’s growing portfolio. Furthermore, in June 2015 Aeterna Zentaris selected Ergomed for phase III study to identify the efficacy of Macrelin, a novel orally active ghrelin agonist to evaluate AGHD.
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Grand View Research, Inc. is a U.S.
based market research and consulting company, registered in the State of
California and headquartered in San Francisco. The company provides syndicated
research reports, customized research reports, and consulting services. To help
clients make informed business decisions, we offer market intelligence studies
ensuring relevant and fact-based research across a range of industries, from
technology to chemicals, materials and healthcare.
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Grand View Research, Inc
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