Quality management and full service model are key to CRO growth, says Frost & Sullivan
There is an increased emphasis on quality management and a move towards full-service provision
Although cost efficiency is a major factor motivating pharmaceutical and biotechnology firms to outsource their research, there is an increased emphasis on quality management and a move towards full-service provision, says Frost & Sullivan in its latest market analysis.
In the long term, European contract research organisations (CROs) with scale, global capabilities and expertise will emerge winners, the market researcher says in its report European CRO Markets - A Strategic Analysis.
The European CRO market was worth US$7.10bn in 2008 and it is estimated that this will reach US$13.52bn by 2015. Frost & Sullivan predicts that growth will be driven by the need for pharmaceutical and biotech companies to control costs and accelerate product development.
"The high costs incurred when drugs fail during clinical trials has prompted interest in biomarkers, hence the development of biomarkers is a new growth driver for CROs," says Frost & Sullivan's industry analyst Ranjith Gopinathan.
"European CROs could assist biotechnology and pharmaceutical companies in compound selection, dose optimisation, efficacy and safety monitoring through the identification of biomarkers and they increasingly view this as an important growth segment," he adds.
CROs in Europe are also establishing strategic partnerships with pharmaceutical companies and adopting effective outsourcing models. In addition, they are expanding their global operations. Clinical trials are increasing in size and CROs are going offshore to benefit from untapped patient populations and the need for cost efficiency. There is also more opportunity for CROs that offer initial screening programmes and capabilities in preclinical and early clinical trials.
Consolidation within the pharmaceuticals industry has led to increased competition for CRO contracts. Consequently, there is also a need for consolidation of European CROs, Frost & Sullivan says.
Even though cost efficiency is a major driver for pharmaceutical and biotechnology firms, Frost & Sullivan finds that greater emphasis is currently being placed on the expertise of CROs, particularly those involved in late-stage clinical trials, rather than whether they are a low-cost provider.