The global Contract Research Outsourcing (CRO) market size is expected to reach USD 104.69 Billion in 2030 and register a revenue CAGR of 10.2% during the forecast period. Rising prevalence of various chronic diseases that claim many lives and affect living conditions of people, and increasing investments by governments of various countries across the globe in development of novel drugs are factors driving market revenue growth.
CRO companies offer a wide range of support services such as project management, clinical trial data management, database design, preclinical research, biopharmaceutical development, data entry and validation, biologic assay development, medicine and disease coding, safety and efficacy summaries, and others. CROs are hired to conduct clinical trials and provide research support for development of safe and more efficient drugs and vaccines.
Rising number of clinical trials across the globe, increasing healthcare research & development budget, and inclining number of outsourcing activities are driving contract research outsourcing market revenue growth. In addition, inclining number of clinical trials and drug pipeline projects, especially in developing countries, is driving market revenue growth. CROs perform clinical trials on behalf of companies who do not have the required infrastructure for such trials. According to ClinicalTrials.gov, number of registered clinical trials by August 2021 was 387,363 globally. In general, clinical trials have become more complex in recent years and is crucial for research & development of new drugs and products. Increasing number of clinical trials conducted in developing countries is also supporting market revenue growth. Most clinical trials are conducted in developing countries as the process is cost-effective in these countries, and volunteers are available for trials at relatively lesser cost than in developed countries.
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Pharmaceutical companies constantly make efforts to reduce overall production expenditure and time required, for which these companies outsource R&D on contract basis in order to eliminate the need and cost required for hiring research staff and for development of in-house R&D infrastructure. CROs can increase success rate and improve chances of drug development, resulting in higher profits. Continuously increasing investments and focus on healthcare R&D, and development of novel drugs and therapies globally are boosting contract research outsourcing market revenue growth.
Additionally, pharmaceutical companies are increasingly investing in research on causes and symptoms of various infectious diseases and leveraging bioinformatics technologies to develop drugs against bacterial and viral infections. Rapid globalization has made international travel and commerce easier, and this can result in transfer of diseases from one region to another. Infections such as Human Immunodeficiency Virus (HIV), cholera and dengue have been spreading due to frequent travel of passengers globally. CROs are being outsourced to research on drugs for such diseases. Various CROs are working on development of drugs for various infectious diseases such as coronavirus, hepatitis, bacterial infections, HIV infections, dengue and yellow fever, among others.
Driver: Development of precision medicine
Development of precision medicine is a new concept in healthcare and is gaining popularity due to shift in emphasis of medicines from reaction to prevention. Huge costs involved in trial-and-error medicine are making precision medicine more important for targeted therapies. Most CROs are working on precision medicine to lower the overall costs of drug development failure and to reduce the time required. CROs provide support and guidance through all stages of precision medicine trials. Development of the entire infrastructure with latest amenities is expensive, so various small-scale companies are outsourcing the R&D work to CROs in order to avoid huge expenses and save time and resources required to complete the procedure, that is, from a drug conception to FDA marketing approval.
Restraint: Lack of skilled professionals
Highly competitive market environment and lack of skilled professionals, particularly in developing countries, are factors that can hamper market growth revenue during the forecast period. Lack of skilled professionals limit adoption of advanced technologies. Additionally, companies need to offer attractive compensation and other benefits for R&D, resulting in lower profits to a certain extent.
Product Type Insights:
Based on product type, the global contract research outsourcing market is segmented into early phase development services, Clinic Research Services (CRS), laboratory services, consulting services and others. Clinic Research Services (CRS) segment is expected to register significantly high revenue growth rate during the forecast period due to rapid increase in global geriatric population, rising prevalence of various chronic diseases and growing demand for more effective and advanced drugs. Clinical trials are necessary to evaluate efficacy of new medicines which work towards improvement of patient’s health.
Laboratory services segment is expected to account for considerably high revenue share during the forecast period, as these services are being outsourced to CROs by pharma companies to avoid additional operational costs and focus on other work. There are several trials and errors that take place before development of a drug, which is expensive, thus, most of the pharmaceutical companies are outsourcing these laboratory services to CROs to reduce costs. CROs are well-equipped with most recent equipment and advanced technologies that aid in carrying out the procedures easily and efficiently.
Therapeutic Area Insights:
Based on therapeutic area, the global contract research outsourcing market is segmented into oncology, central nervous system disorder, immunological disorders, cardiovascular diseases, infectious diseases, respiratory disorders, diabetes, and others. The oncology segment accounted for largest revenue share in 2020 due to high prevalence of cancer globally and on-going pipeline projects to develop effective drugs for the disease. Cancer is among the leading cause of deaths and accounted for approximately 10 Million deaths in 2020. This is creating high demand for development of novel drugs and therapies, which in turn, is creating need for outsourcing research procedures.
Infectious diseases segment is expected to register significantly high revenue growth rate during the forecast period, owing to high prevalence of infectious diseases such as influenza, meningitis, and Tuberculosis (TB), among others. Major companies are investing in research on causes and symptoms of infectious diseases and leveraging analytical technologies to develop drugs to treat viral and bacteriological infections. Increasing investments in clinical research of Hepatitis C is also expected to drive revenue growth of the segment.
Based on end-use, the global contract research outsourcing market is segmented into pharmaceutical and biopharmaceutical companies, medical device companies, academic institutes, and others.
Pharma companies are focusing on developing more efficient and safer technology. Increasing investments in research & development is expected to support revenue growth of the pharmaceutical and biopharmaceutical companies segment during forecast period. Pharma companies are outsourcing R&D at a rapid rate to CROs to save cost required for in-house research infrastructure.
Based on regional analysis, the North America Contract Research Outsourcing (CRO) market accounted for largest revenue share in 2020, due to presence of well-established CRO companies and high investments in research & development of novel drugs and therapies. Revenue growth in CRO is driven by presence of advanced infrastructure for clinical research and effective government incentive programs in the U.S. Moreover, easy access to specialized technologies is also supporting revenue growth of the market in this region.
Asia Pacific CRO market is expected to register fastest revenue CAGR during the forecast period, owing to revenue growth and business expansion opportunities offered by untapped markets in the region, and rising demand for clinical trials in developing countries such as China and India. There is an increase in number of clinical trials in China due to regulatory flexibility from government of China, and China Food and Drug Administration.
Competitive landscape of the global contract research outsourcing market is fragmented with many key players operating on global and regional levels. Key companies are engaged in product development and strategic alliances to expand their respective product portfolio and gain a robust footing in the global market. Major companies profiled in the market report include Charles River Laboratories, Parexel International, IQVIA, Labcorp Drug Development, PRA Health Sciences, Syneos Health, Thermo Fisher Scientific, Inc., ICON plc, Medidata Solutions, and Medpace Holdings, Inc.
Initiatives taken by major companies are driving growth of the market, for instance:
In December 2021, Thermo Fisher completed acquisition of leading contract research outsourcing firm PPD, Inc., for USD 17.4 Billion. PPD Inc. will be integrated into Thermo Fisher’s laboratory products and services segment. PPD will bring drug development platform, strong laboratory service, excellent patient recruitment capabilities and reputation of quality services, to improve Thermo Fisher’s offerings.
In July 2021, Parexel announced a definite merger agreement, under which the company will be purchased by EQT Private Equity and Goldman Sachs for USD 8.5 Billion. The merger will fuel growth and business expansion and the company does not expect any other changes.
Segments Covered in the Report
This report offers historical data and forecasts revenue growth at a global, regional, and country level, and provides analysis of the market trends in each of the sub-segments from 2019 to 2030. For this study, Reports and Data has segmented the global contract research outsourcing market based on product type, therapeutic area, end-use, and region:
Contract Research Outsourcing (CRO) Market Report Scope
Segments covered By Product Type Outlook, Therapeutic Area Outlook, End Use Outlook, Regional Outlook
By Product Type Outlook
Early Phase Development Services
Clinic Research Services (CRS)
By Therapeutic Area Outlook
Central nervous system (CNS) Disorder
By End Use Outlook
Pharmaceutical and Biopharmaceutical Companies
Medical Device Companies
Middle East & Africa
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