Multinationals currently outsource a larger proportion of their clinical trials than local firms
There is huge potential for contract research organisations (CROs) to expand their market share in Latin America as market penetration stood at only 64% in 2013, says Frost & Sullivan in its latest analysis.
Local contracts, which accounted for 21.6% of the total market size in 2013, will begin to contribute more to overall revenues. The local development of biosimilars and domestic pharmaceutical companies' plans to increase the number of clinical trials to comply with regulations and focus on geographic expansion will give rise to more local contracts for CROs in the region, the market research company reports.
Latin American Contract Research Organization Market finds that the market had revenue of US$438.5m in 2013 and estimates that this will rise to $661.3m in 2019 at a compound annual growth rate of 7.1%.
Frost & Sullivan's analysis covers Phase I–III and late-phase clinical development as well as biostatistics, central laboratory services and data management. Health economics studies, part of late-phase trials, will gain significant traction in the coming years, since they are used when deciding which new molecules to include in the list of reimbursed drugs considered by public health services and private insurance plans.
In Argentina and Brazil, regulatory issues are holding back clinical development and dampening the prospects of CROs in the region
Frost & Sullivan's Healthcare Consultant Sanjeev Kumar said: 'Multinational pharmaceutical companies tend to outsource about 70% of their trials by adopting either a fully outsourced or function-to-function model. However, local pharmaceutical companies have lower outsourcing rates that range from 50–70% across Latin America.'
In Argentina and Brazil, regulatory issues are holding back clinical development and dampening the prospects of CROs in the region. Bottlenecks in the Agencia Nacional de Vigilancia Sanitaria (ANVISA) submission and approval processes have meant that protocol approval takes 12–15 months in Brazil and an average of six months in Argentina.
In addition, limited outsourcing among big pharmaceutical clients that can conduct in-house R&D and clinical drug testing has restricted CRO market growth. But large, well-established CROs have begun to use specialised research technologies that can cater to the rising demand for drug development and therefore pharmaceutical clients' reliance on in-house R&D is likely to reduce considerably, says Frost & Sullivan.
Along with this trend, the rise of innovative therapeutic options plus the need for increased drug efficacy and safety are expected to promote market development.