The contract research organisation industry in the recession – a CRO Frost report

Some of us may speculate what will happen to the clinical research organisation (CRO) industry whilst the nation gradually improves from the recent recession, however according to a recent reportperformed by Frost & Sullivan, the CRO industry will continue to grow. Throughout this current environment, biotech and pharma corporations are less probable to rely on or spend on internal methods to perform their medical trials. However, somebody has to do them…

The report has also warned that the “US CRO Markets-Key Therapeutic Areas” anticipate that struggling pharma and biotech companies will fail to meet the costs for trials currently underway. But this is not likely to be a lasting occurrence, suggests the report.

Senior industry analyst for Frost and Sullivan, Barath Shankar Subramanian revealed that the annual revenue growth for CROs has decreased from the 14-15% range to 10% this past year.

Projected Prediction – for pharmacology companies or CRO’s

However, he says that the good news is that it is anticipated that the annual revenues for the industry will increase twofold between now and the year 2015, increasing from $10.91 billion at present to $22.87 billion. He says this is likely to result of sponsor organisations assuming strategic alliances with services organisations or smaller CROs. “After 10 years of talking about such relationships, CROs and pharma companies are beginning to forge them,” Subramanian says.

Subramanian uses the immense Eli Lilly/Covance partnership as an example, which came in to effect in August last year, where Covance has outsourced $1.6 billion worth of drug development business to Lilly over the next 10 years.

“That’s the flavour of the season,” Subramanian says. “We’re seeing some new models being explored when previously it was purely transactional, with CROs taking a wait and watch attitude toward strategic partnerships.”

In addition, partnerships with CROs or clinical pharmacology organisations enable small sponsors more time within the research cycle to investigate promising molecules. Beginner biotech and pharma firms used to out-licence their Phase I or Phase II; which resulted in a large amount of ambiguity for the future of the research study. In this day and age, conversely, more and more start-up firms are able to keep products in the pipeline for a longer period of time which in turn brings them closer to the market and this is due to the cost-effectiveness made possible by CROs. This is an optimistic outcome for the sponsor and the CRO.

Tip from the Author: clinical studies conducted in the UK by a professional institute of clinical research is the best choice for aquiring the most accurate data.

* Make sure that you consult your doctor before taking any medical advice of any kind.