Market Trends of Global Contract Research Organization Industry
The Early-phase Development Services Segment is Poised to Witness Robust Growth During the Forecast Period
With more drug patents expiring, generic versions of drugs are becoming more of a threat, and drug companies are under pressure to make up for the money they lose because of generics. R&D costs are going up because drug molecules are getting more complicated, and regulations are getting stricter. Additionally, leading CROs have developed significant expertise in early-phase development, and CROs are leveraging this expertise to offer highly efficient and accurate early-phase development services. CROs are also allowing small and midsize firms to enter the complex drug development process without significant investment in capital equipment. According to the March 2021 published article by Anju Life Sciences Software, high data quality, better safety decisions, reduced trial operation costs, and faster study execution are making early phase trials more successful. Thus, the early-phase development services segment is poised to register significant growth.
Additionally, the growing company partnerships and increased clinical trial demand are expected to drive the CRO industry segment. Furthermore, in June 2021, Cancer Research UK and Aleta Biotherapeutics signed an agreement to progress the early-phase clinical development of ALETA-001, their CAR-T cell engager. ALETA-001 has been developed to benefit people with B-cell lymphoma and leukemia whose disease has progressed after receiving CD19 CAR-T cell therapy. Thus, such factors are expected to boost the early-phase development services segment over the forecast period.
North America Captured the Largest Market Share and is Expected to Retain its Dominance During the Forecast Period
Major pharmaceutical companies are outsourcing R&D and clinical trials because of changes in reimbursement and competition from generic drugs. This is supporting the CRO market growth in North America. The growth of the market in the region is due to the fact that pharmaceutical companies are spending more money on research and development to create new medicines. For instance, the article published by the National Library of Medicine in July 2022 reported that in 2021, overall pharmaceutical expenditures in the United States were USD 576.9 billion, an increase of 7.7% compared to 2020. Thus, the increasing pharmaceutical expenditure in the country is also bolstering the studied CRO industry growth.
Additionally, according to Federal Research and Development (R&D) Funding: FY2022, funding for R&D is concentrated in a few federal departments and agencies. In FY 2021, five agencies received 93.0% of total federal R&D funding, with the Department of Health and Human Services receiving 27.6%. The largest dollar increases in R&D funding would be made to Health and Human Services, up to USD 7.7 billion (17.8%).
By and large, the presence of contrast research organization companies in the region and strategic collaborations undertaken by these firms are driving the market growth. For instance, in February 2021, Parexel International partnered with NeoGenomics to enable the application of NeoGenomics' real-world genomics data in oncology clinical trials, thereby leading to increased efficiency in patient matching and optimizing trial design, site selection, clinical development, and translational research. Thus, the high R&D investment and initiatives by key players in the expansion of the product portfolio are expected to boost the development of new drugs, thereby increasing the demand for outsourcing services.
