Aug, 2020 - By CMI
The global life sciences industry has witnessed rampant growth over the last decade. Expiry of product patents and overall economic downturn leading to plummeting revenue in the recent past is influencing major players in the industry to develop alternative drugs and related services to sustain in the market. Moreover, stringent regulatory compliance further translates to high capital investment and low-profit margins, which further fuels demand alternatives. As per a report published by the Center for the Study of Drug Development (CSDD), the average investment for the development of an approved prescription drug was US$ 2.6 billion in 2014, a whopping 145% rise over the last decade. Outsourcing has emerged as a preferred mode adopted by pharmaceutical companies to earn a high return on investment and maintain optimal quality. Rising incidence of chronic diseases and growing geriatric population creates a highly lucrative market opportunity for players engaged in the life sciences BPO market.
Outsourcing of life sciences products and services provides the most feasible option for major players in the industry and fuels operational efficiency, optimizes research expenditure and provides superior quality professional services while ensuring regulatory compliance. Life sciences BPO and contract manufacturing organizations (CMOs) and contract research organizations (CROs) have thus witnessed rampant growth in the recent past. This helps ensure long-term profitability and sustained development of innovative products. Various technological advancements, especially in developed nations has created a highly conducive environment for market players, with the global life sciences BPO market pegged at US$ 195 billion in 2015. The market is further expected to experience robust growth at a CAGR of 8.9% during 2016–2024. Key factors contributing to market growth include increasing drug development cost, rising pre-clinical research and development expenditure, increasing trend of post-marketing surveillance, and a growing number of clinical trials.
According to the report titled “GLOBAL LIFE SCIENCES BPO MARKET, BY SERVICE TYPE (MEDICAL DEVICE OUTSOURCING AND PHARMACEUTICAL OUTSOURCING), END USER (HEALTHCARE PROVIDERS AND HEALTHCARE PAYERS) AND BY GEOGRAPHY - TRENDS AND FORECAST TO 2024 published by Coherent Market Insights”, the market for Life Sciences BPO is expected to reach US$ 505.0 billion by the end of 2024, expanding at a robust CAGR of 12.2% during 2016–2024.
The highly competitive life sciences BPO market with multiple small, medium and large firms are extremely diverse in nature. The dominant players of the life sciences BPO market are Accenture plc, Boehringer Ingelheim GmbH, Anthelio Healthcare Solutions, ICON plc, Infosys Limited, Catalent, Inc., Covance, Inc., Quintiles Transnational Corporation, Genpact Ltd., Lonza Group, International Business Machines Corporation, and PAREXEL International Corporation. While some major players focus on certain segments and enjoy a strong share in their respective segments, while others focus on providing products and services across segments in order to sustain in the market and alleviate risks.
BPO market solutions help the diverse arenas of life sciences such as pharmaceutical, medical devices, biotech as well as diagnostics companies to speed up drug discovery, increase manufacturing productivity, accelerate efficiency in clinical trials, and augment sales and marketing efficacy. Alternative outsourcing solutions offer a niche skilled workforce consisting of pharmacologists, pharmacists, biomedical engineers, physicians, and practicing doctors. Life sciences BPO market players closely operate with major pharmaceutical companies and medical device manufacturers and offer high value through unmatched expertise and high level of innovation.
This highly lucrative market though is not without its own share of challenges. Key factors restraining the market growth are varying regulatory norms across regions, lack of standardization, security threat regarding the leaking of information regarding proprietary drugs and techniques, and various privacy issues. Highly favorable economic conditions characterized by an increase in cap of FDI and supportive government regulations in the Asia Pacific, especially in the highly lucrative India market and the highly advanced research industry in the region are expected to position the Asia Pacific as a major hub for the market in the near future. Collaborations among CROs would ensure faster and more efficient clinical trials, in turn fueling the market growth. For instance, ClinDatrix, Inc. collaborated with six other CROs in 2014. This trend is expected to gain traction in the near future and ensure profitable and sustained growth for players across the value chain.