What will happen to the CRO industry whilst the economy improves
The information provided in a recent report by Frost and Sullivan shows that, the Clinical Research Organisation industry will continue to expand despite conjecture resultant of the volatile economic climate we have recently experienced. In this climate, biotechnology and pharmaceutical corporations keep away from investing in in-house capabilities for the conduct of their studies and similarly rely on outsourcing to CROs.
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.
Barath Shankar Subramanian, senior industry analyst for Frost and Sullivan, pointed out that the CRO annual revenue growth is down from the fourteen to fifteen percent region last year to ten percent this year.
Projected Prediction – for pharmacology companies or CRO’s
Although, this is not all bad news – Subramanian claims that the industry’s annual revenues will double from now until the year 2015, growing from a current 12.91 billion to $22.87 billion in the years to come. This, he says, will be due to sponser firms increasingly adopting tactical partnerships with smaller services firms or CROs. “After 10 years of talking about such relationships, CROs and pharma companies are beginning to forge them,” he says.
Subramanian uses the huge Eli Lilly/Covance deal made in August last year to exemplify this claim, where Covance has contracted out $1.6 billion worth of drug development projects to Lilly for the next 10 years.
Subramanian says: “That’s the flavor of the season, 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.”
A further development is CROs or clinical research organisations allowing sponsors to keep hold of hopeful molecules for longer into the research cycle. Biotechnology and Pharmaceutical companies just starting out would often out-licence products after Phases I and II; resulting in a vast amount of uncertainty of the future of the assignment. These days, on the other hand, more of these firms can retain products in their pipeline for longer, which means bringing them closer to the market. This is made possible by the cost savings associated with CRO partnerships. This is a great step forward for sponsors and CROs.
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.
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