Healthcare Contract Research Organization Market size is estimated to be $38 billion in 2019, growing at a CAGR of 6.8% during the forecast period 2020-2025. Healthcare Contract Research Organization is independent organizations outsourced by other companies in order to perform research which includes pre-clinical to post clinical stages depending on the company requirements. The major revenue source of CROs comes from the Research and development budget of the sponsor companies majorly from Pharma and Biotech sector. The wide source of revenue comes from biopharmaceutical firms, in recent years owing to more R&D scrutiny and patent expiration on drug discovery has resulted into more reliability towards outsourcing. CRO market outsourcing in the pharmaceutical sector is driven by their expertise which is lacked by the in house team, increased global reach, high quality, risk mitigation, cost saving in capital investment and access to innovation. The R&D spending by pharmaceuticals have increased for rare disease for which there is a large scope for discovery has also boosted the market growth. CRO services are segmented into- early stage development services m(pre-clinical and clinical pharmacology) and late stage development services (clinical trials and central laboratory services). CRO outsourcing service have increased for Clinical Data Management, Biostatistics and Pharmacovigilance and drug discovery service is the most important driver for the market globally.
Healthcare Contract Research Organization Market Segment Analysis - By Type
By type, Drug Discovery phase holds the largest market share for the healthcare contract research organisation market and pre-clinical and clinical segment is predicted to grow with the fastest CAGR of 7.3% in the forecast period 2020-2025. Healthcare Contract Research Organization Market is segmented into different service types which include Preclinical services which tell about the drug readiness for human trial by checking its level of dosage and toxicity. Clinical Research Service, in these clinical trials it is performed on human in four phases. Phase I administers the effects of drug and its safety; it takes months to get complete where a small group of volunteers are examined with drug dosage. Phase II last for few months to two years where with increased group of patient the effect of drug is studied. Phase III in this randomized and blind testing on large scale of patients for several years is performed and FDA approval is asked for final phase. Phase IV post marketing surveillance trial before selling. Laboratory services where bio analytical and analytical testing is performed to quantitatively measure the composition and chemical makeup of new drug by testing in on biological fluids and Consulting Services.
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Healthcare Contract Research Organization Market Segment Analysis - By End-User
Pharmaceutical and biopharma dominates the end user segment by increasing the market share for Healthcare CRO Market. With increase in geriatric population increase in diseases have resulted into large spending by Pharmaceutical sector on CROs for Research and Development on Drug discovery for rare diseases. Pharmaceutical sector is also increasing reliability on CRO as it helps in cost saving and expertise availability which can provide high quality results. CRO is also utilized by nonprofit research institutions and medical devices industries.
Healthcare Contract Research Organization Market Segment Analysis - By Geography
North America dominates the Healthcare Contract Research Organization Market with the market share of more than 37% in 2019 owing to presence of large pharmaceutical and biotech companies and technology advancement. R&D expenditure is more in the Healthcare Industry is also significantly high in this region. Asia-Pacific is expected to grow with fastest CAGR in the forecast period 2020-2025. The increasing geriatric population have increased the number of chronic illness and innovative technology adoption and cheap labour availability is driving the Healthcare CRO market in emerging countries of this region.
Healthcare Contract Research Organization Market Drivers
Increased focus on drug development for rare diseases
With rise in geriatric population number of diseases have also increased in recent years owing to which pharmaceutical industry have increased their spending on R&D for drug discovery for oncology and various other diseases which has tremendously boosted the market for healthcare CRO market. As CRO provide services for pre-clinical and clinical trials they provide high quality outputs and also increases global opportunity owing to which pharmaceutical industry have started outsourcing their in house R&D to the CRO.
Moving towards cost saving methods through outsourcing
Pharmaceutical and biopharma sector have outsourced their in-house research and development to the Contract Research Organization which helps in saving capital cost and time. The research service on drug development is provided by the CRO which helps in providing great resource capabilities and quality measures and mitigates risk which the in house teams lack. This helps in driving the market growth. CRO are also moving towards engagement models with pharma companies by forming strategic alliances which is all helping the firms to grow by reducing their cost and by sharing their risk and helping them globalize.
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Healthcare Contract Research Organization Market Challenges
Failure of trial approval from FDA and shortage of skilled labour
The clinical trials are not approved easily by the FDA and failure results into moving to the next revenue generating stages (post clinical trials). Further, skilled labour shortage restrains the market growth for the forecast period 2020-2025.
Healthcare Contract Research Organization Market Industry Outlook
Product Launches, Merger & Acquisition, joint ventures and R&D activities are key strategies adopted by the players in Medical & Pharmaceutical Gases and Equipment Market. Contract Research Organization Market top 10 companies are IQVIA, Parexel, Syneos Health, Convance, Icon, PRA Health Sciences, PPD, Chiltern, Fisher Clinical Service and Medpace.
Developments:
July 2020: Parexel, US based CRO enterprise announced its collaboration with TriNetx, US based global healthcare research network firm on one project in order the accessibility towards real world data in clinical research.
October 2020: Syneous Health, a US based CRO (Contract Research Organization) and CCO (Contract Commercial Organization) acquired Synteract a US based CRO providing services to the emerging biopharma segment. The acquisition will help Syneous Health to expand to the small and mid-size pharma companies and increase the global market presence.
Key Takeaways
Drug Discovery phase holds the largest market share for the healthcare contract research organisation market and pre-clinical and clinical segment is predicted to grow with the fastest CAGR in the forecast period 2020-2025.
The spending on R&D budget has increased towards drug discovery for rare diseases which also includes oncology.
With changing R&D needs pharmaceutical and biopharma accounts for the largest R&D spending on CROs.
North America dominated the Healthcare Contract Research Organisation Market also Asia-Pacific is predicted to grow with the fastest CAGR during the forecast period 2020-2025.
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