Contract Research Organization Growth and Investment

Many Contract Research Organizations (CROs) are consolidating to offer key discovery, early stage efficiencies, and expert clinical stage trial services in the lab to speed up drug development.

Over the past decade or more, the industry has searched for better ways to manage the costs and risks of drug development for commercial performance and therapeutic efficacy long after approval.

An increase in demand for effective pharmaceuticals has led to innovations throughout the industry. Business models have shifted and changed to manage drug development risks. Leading drug developers from around the world are adopting strategies centered on deeper relationships with contract research organization services to support drug development.

CRO Services Growth Prompted by Globalization

With clinical trials becoming more complex, the demand for sophisticated, globalized CRO services has increased due to contract research organization companies offering a broader range of advanced capabilities.

As the industry focuses more on trials for autoimmune diseases, oncology, and other rare diseases, the trials become more complicated. The number of studies and tests performed, amount of data collected per patient, and the number of endpoints included all combine to increase trial complexity.

Contract research organization service providers serve as a long-term partner delivering better value from the supply chain. They offer comprehensive support with greater access to novel and proprietary technologies. CRO services have become central to drug development by being the key to accelerating the pharmaceutical research process.

Earlier Declines in Spending Impacted by Slower FDA Approvals

According to Nice Insight’s Preclinical and Clinical Research Survey, drug manufacturers spending more than $50 million per year on CRO services experienced a drop between 2016 and 2017. Respondents predicting a decline in spending over the next five years also increased in 2017.

The slowed spending and reduced optimism came in parallel to a decrease in the number of new drugs approved by the FDA in 2016. Yet nearly half of the respondents in 2017 expected the number of pharmaceutical research organizations they partner with to increase. By September 2017, the FDA was back on track logging 32 new drug approvals. The slight downturn could be viewed as a calm before the growth in demand for CRO services.

Quicker Development to Sustain CRO Strategy in 2018 and Beyond

Big changes are coming to the FDA in how they do business. A movement to streamline the approval process and reduce the costs of bringing new drugs to market could lead to a new wave of drug development. An increase in investment would maintain the demand for CRO services.

Competition in the CRO services market is tightening making it more important for CROs to grow to meet the expectations of sponsors, drug owners, and developers. To be successful, CROs must differentiate themselves with technology and operational structure for increased efficiency, flexibility, and quality. Excellent customer service and the ability to quickly gain new knowledge based on customer needs is critical. 

At Pharmaron, we support our partners’ development and commercialization of innovative medicines. If you’re interested in CRO services, contact us today.