The global healthcare contract research outsourcing market is estimated to be valued at US$ 130.3 Bn in 2023 and is expected to exhibit a CAGR of 15.1% during the forecast period (2023-2030).
Analysts’ Views on the Global Healthcare Contract Research Outsourcing Market:
Increasing number of mergers and acquisitions among biopharmaceutical and pharmaceutical companies is expected to boost the growth of the global healthcare contract research outsourcing market over the forecast period. For instance, in January 2020, Charles River Laboratories, a U.S.-based pharmaceutical company specializing in a variety of preclinical and clinical laboratory, gene therapy, and cell therapy services, for the pharmaceutical, medical device and biotechnology industries, acquired HemaCare, a global provider of biological blood products and services .
Figure 1. Global Healthcare Contract Research Outsourcing Market Share (%), by Service Type, 2023
Global Healthcare Contract Research Outsourcing Market- Driver
Increasing patent expirations
Increasing number of patent expirations is expected to aid in the growth of the global healthcare contract research outsourcing market. For instance, Boehringer Ingelheim’s Atrovent HFA (ipratropium hfa) used for the treatment of chronic obstructive pulmonary disease and AstraZeneca’s Bydureon (exenatide) used for the treatment of type 2 diabetes is expected to face patent expiration in May 2020 and October 2020, respectively.
Increasing prevalence of chronic illnesses
As the prevalence of chronic illnesses increases, the pressure on various biopharmaceutical companies to conduct research and development activities also increases. Thus, the market for global healthcare contract research outsourcing is increasing rapidly. For instance, according to an article published in 2022 by PubMed, a free search engine of biological databases and medical reports, the prevalence of self-reported chronic disease was 21 per 100 elderly persons in India in 2021 with 17% elderly suffering from chronic diseases in rural areas and 29% in urban areas.
Figure 2. Global Healthcare Contract Research Outsourcing Market Share (%), by Region, 2023
Global Healthcare Contract Research Outsourcing Market- Regional Analysis
Among regions, North America is estimated to hold a dominant position in the global healthcare contract research outsourcing market over the forecast period. This is due to the increasing number of acquisitions occurring in this region. For instance, on May 11, 2023, Genesis Biotechnology Group, a U.S.-based company that provides services to help preclinical drug development programs from discovery to candidate selection, acquired JSS Medical Research, a Canada-based company that provides consulting services to pharmaceutical companies focusing on medical writing and statistical analysis in order to expand its CRO services reach.
Global Healthcare Contract Research Outsourcing Market - Impact of Coronavirus (COVID-19) Pandemic
Since the COVID-19 virus outbreak in December 2019, the disease spread to over 100 countries across the globe, and the World Health Organization declared it a public health emergency on January 30, 2020.
COVID-19 affected the economy in three main ways: by directly affecting the production and demand of drugs, by creating disruptions in distribution channels, and through its financial impact on firms and financial markets. Due to nationwide lockdowns, several countries such as China, India, Saudi Arabia, the U.A.E., Egypt, and others are facing problems with the transportation of drugs from one place to another.
However, the COVID-19 pandemic had a positive impact on the global healthcare contract research outsourcing market. This is because of the increased partnerships between biopharmaceutical companies to meet the shortage and demand of drugs. For instance, in July 2020, Piramal Critical Care (a subsidiary of Piramal Enterprises Limited), a producer of inhaled anesthetics and hospital generics, announced a strategic partnership with a U.S.-based pharmaceutical outsourcing facility, Medivant Healthcare to distribute single-dose injectable drugs in approved states for COVID-19 patients that had fallen short in supply.
Healthcare Contract Research Outsourcing Market Report Coverage
|Market Size in 2023:||US$ 130.3 Bn|
|Historical Data for:||2018 to 2021||Forecast Period:||2023 to 2030|
|Forecast Period 2023 to 2030 CAGR:||15.1%||2030 Value Projection:||US$ 349.3 Bn|
IQVIA Inc, Covance Inc (a subsidiary of Labcorp), Pharmaceutical Product Development Inc (a subsidiary of Thermo Fisher Scientific Inc), Parexel International (MA) Corporation, Charles River Laboratories, ICON plc, Medidata, Inventiv Health, Inc. (a subsidiary of Syneos Health), Medpace, and Piramal Enterprises Ltd.
|Restraints & Challenges:||
Global Healthcare Contract Research Outsourcing Market Segmentation:
The global healthcare contract research outsourcing market report is segmented into services type, end user, and region.
By services type, the market is segmented into clinical trials, regulatory services, medical writing, and others. Out of which, the clinical trials segment is expected to hold a dominant position in the global healthcare contract research outsourcing market during the forecast period, and this is attributed to the increasing prevalence of chronic illnesses globally.
By end user, the market is segmented into CROs, Clinical Trial Laboratories, and AMCs. Out of which, the CRO segment is expected to dominate the market over the forecast period. This is because R&D is being quickly outsourced by pharmaceutical companies to CROs in order to reduce the expenses associated with the internal testing platforms.
By region, the market is segmented into North America, Europe, Asia Pacific, Latin America, Middle East and Africa out of which the North America segment is expected to dominate the market over the forecast period owing to the presence of the largest number of healthcare contract research organizations in this region.
Among all the segmentations, the service type segment has the highest potential due to the increasing acquisitions over the forecast period. For instance, in December 2020, Ergomed plc, a U.K-based provider of development services announced the acquisition of MediSource, a specialized Clinical Research Organization (CRO) based in the U.S.
Global Healthcare Contract Research Outsourcing Market Cross Sectional Analysis:
Among services type, the clinical trials segment is expected to drive the growth of the global healthcare contract research outsourcing market in North America owing to the formation of new contract research outsourcing companies providing clinical trial services. For instance, in July 2022, Laboratory Corporation of America Holdings (Labcorp), a U.S-based clinical laboratory network announced that it plans to separate its clinical development business into an independent, publicly-traded Contract Research Organization (CRO) to test phase 1 to 4 of clinical trials.
Global Healthcare Contract Research Outsourcing Market: Key Developments
In March 2020, Medpace Holdings, Inc., a healthcare CRO, partnered with Medidata Solutions, a service company, to integrate its imaging systems and workflow with Medidata Rave imaging for clinical trials.
In April 2020, IQVIA, Inc. launched its new technology-enabled COVID-19 Trial Matching Tool at c19trials.com, which is an online platforms that matches individuals with specific COVID-19 studies to accelerate clinical research projects.
In November, 2021, Inotiv, a accompany that provides non-clinical and analytical drug discovery and development services, research models, and related products and services, completed the acquisition of Envigo, a London-based a privately-held contract research organization and laboratory animal source, to help bring new drugs and medical devices through the discovery and preclinical phases of development.
In April 2021, IQVIA Inc,- a global provider of advanced analytics, technology solutions, and clinical research services to the life sciences industry, announced the acquisition of Q2 Solutions from Quest Diagnostics, a U.S-based clinical laboratory.
Global Healthcare Contract Research Outsourcing Market: Key Trends
On April 17, 2023, PHARMALEX GMBH, a Germany-based pharmaceutical consulting company that provides specialized services for the pharmaceutical, biotechnology, and medical devices, announced a merger with Cpharm Australia, a provider of pharmacovigilance services in Australia and New Zealand, to expand the company’s footprint in Australia.
On June 15 2023, Koneksa Health, an evidence-based digital biomarkers company, announced a partnership with Beacon Biosignals, a computational neurodiagnostics company, to launch a clinical trial to investigate the integration of Beacon’s at-home Electroencephalogram (EEG) into the Koneksa Neuroscience Solution Toolkit. The Koneksa-sponsored clinical validation study is an observational study that discovers biomarkers and determines the usability and validity of measures of sleep and neurologic disorders collected using at-home wearables, and smartphones.
Global Healthcare Contract Research Outsourcing Market: Restraint
Patient data privacy and security breach
A lack of direct supervision can present many patient data and information vulnerabilities, which can restrain the growth of the global healthcare contract research outsourcing market. For instance, on May 2023, the outsourcing firm and government healthcare contractor, Capita plc revealed that it incurred losses upto US$ 22 Mn from a cyber-attack in which some customer, supplier, and staff data was accessed by hackers. Drafting legally binding documents such as non-disclosure agreements and having them signed by all parties is an effective counterbalance to the above restraint.
Lack of control on quality on products
In-house production provides the company with ultimate control over the quality and the quantity of the products. Also, the company can easily change scope, adjust timelines, and increase/decrease volume based on the market demand. However, by outsourcing drug manufacturing, there is a risk of quality standards not being met, which, in turn, can hamper the brand name of the company. Choosing a drug manufacturer with good experience and expertise in a particular market with a good track record, can serve as an effective counterbalance to the above restraint.
Global Healthcare Contract Research Outsourcing Market - Key Players
The major players operating in the global healthcare contract research outsourcing market include IQVIA Inc., Covance Inc (a subsidiary of Labcorp), Pharmaceutical Product Development Inc (a subsidiary of Thermo Fisher Scientific Inc), Parexel International (MA) Corporation, Charles River Laboratories, ICON plc, Medidata, Inventiv Health, Inc. (a subsidiary of Syneos Health), Medpace, and Piramal Enterprises Ltd.
*Definition: A contract research organization, also called Clinical Research Organization (CRO) is a service organization that provides support to the pharmaceutical and biotechnology industries in the form of outsourced pharmaceutical research services (for both drugs and medical devices). CROs range from large, international full service organizations to small, niche specialty groups and can offer their clients the experience of moving a new drug or device from its conception to FDA marketing approval without the drug sponsor having to maintain a staff for these services.
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