U.S. CONTRACT RESEARCH ORGANIZATION (CROS) MARKET ANALYSIS

Market Size and Trends

The U.S. contract research organization (CROs) market is estimated to be valued at USD 19.44 Bn in 2024 and is expected to reach USD 43.61 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 12.2% from 2024 to 2031.

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The U.S. contract research organization (CROs) market has been witnessing positive growth over the past few years. Rising R&D expenditure of pharmaceutical and biopharmaceutical companies and the emergence of new drug pipelines with complex molecules are expected to drive the market growth during the forecast period. In addition, the growing demand for specialized testing services and strategic partnerships between pharmaceutical companies and CROs to maximize outsourcing and reduce development costs are further expected to support the market expansion. However, pricing pressures, intense competition, and lack of harmonization of regulations globally may challenge market players over the next few years. Overall, increased R&D spending and outsourcing activities indicate a promising outlook for the U.S. contract research organization (CROs) market during the forecast years.

Market Driver – Increasing Number of Clinical Trials

Pharmaceutical and biotechnology companies are investing heavily in research and development (R&D) to bring new drugs and therapies to the market. As a result, there is a greater need for conducting clinical trials to test the safety and efficacy of these products. This increased research and development (R&D) expenditure boosts the demand for contract clinical research organization services. Increasing number of clinical trials globally is a key driver propelling the growth and expansion of the global contract clinical research organization market. For instance, according to the data published by Honeycomb Worldwide Inc., a company that operates in the pharmaceuticals industry, on May 17, 2023, there were 452,604 registered clinical trials globally on ClinicalTrials.gov. Out of the total registered studies, 64,838 are actively recruiting participants. This represents a significant increase from the over 365,000 registered trials reported in early 2021. It is clear that the clinical research landscape continues to expand at a substantial rate.

Market Concentration and Competitive Landscape

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Pharmaceutical and biotechnology industries have been continuously increasing their expenditure on research and development activities, in order to introduce new drugs in the market. Companies invest huge amounts in R&D to develop advanced healthcare solutions through clinical research. However, conducting clinical trials requires specialized infrastructure and expertise that most companies may not have in-house. This boosts the global contract clinical research organization market growth. For instance, Merck & Co., Inc., a multinational pharmaceutical company, announced that its R&D expenses were US$ 9.6 billion in the fourth quarter of 2023 as compared to US$ 3.8 billion in the fourth quarter of 2022. R&D expenses were US$ 30.5 billion for 2023 as compared to US$ 13.5 billion for 2022.

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Data privacy and security concerns represent a significant restraining factor for the contract clinical research organization market due to several key reasons: Complexity of Data Handling: Clinical trials generate large volumes of sensitive and personally identifiable information (PII) from participants. This includes medical history, genetic data, and other confidential details. Managing and securing such complex datasets require specialized expertise and resources. International Data Transfers: Many clinical trials are conducted across multiple countries, necessitating the transfer of data across borders. Compliance with diverse data protection laws and regulations in different jurisdictions adds complexity and potential legal risks for CROs. Ethical Considerations: Protecting the privacy and confidentiality of participants is an ethical imperative in clinical research. Any compromise in data security not only violates ethical principles but also undermines the integrity of the research process.

Market Opportunities – Increasing Adoption of Inorganic Growth Strategies by Key Players

Key market players are focused on adopting inorganic growth strategies, such as partnership agreements, in order to expand their presence globally. For instance, in June 2023, ITOCHU Corporation, a company involved in domestic trading, import/export, and overseas trading of various products, announced that its subsidiary, A2 Healthcare Corporation, had signed the first partnership agreement with NRG Oncology-Japan a non-profit organization dedicated to supporting clinical trials. NRG promotes multicenter joint clinical research within Japan as an affiliate of the National Cancer Institute. Based on the agreement, A2 Healthcare will continue to engage in the clinical trial support business for drugs that have not yet been approved in Japan to address drug lag and drug loss, which are recent social issues.

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The service type segment includes drug discovery, preclinical studies, early phase I - IIa, phase IIa - III, phase IIIb – IV, medical coding and writing, monitoring, clinical data management, and others. The drug discovery subsegment is expected to have 28.5% of the market share in 2024 owing to growing outsourcing of drug discovery activities and increasing research and development investments by pharmaceutical companies. CROs offer end-to-end drug discovery services right from target identification and validation to lead optimization. They employ advanced technologies such as genomic screening, bioinformatics and artificial intelligence which help clients accelerate the discovery process. Outsourcing drug discovery to specialized CROs allows pharmaceutical companies to focus on their core competencies while obtaining expert services in a cost-effective manner. It also provides access to latest tools and infrastructure not available in-house. Furthermore, intense patent cliff pressures on large pharma have driven them to increase discovery investments to replenish pipelines, benefiting CRO drug discovery revenues. The expertise of CROs in novel areas like oncology and rare diseases further enhances their appeal. Overall, the need to boost productivity and flexibility at reduced costs continues to support strong demand growth for outsourced drug discovery services.

Insights, By Therapeutic Application: Increasing Prevalence of Cancer

The therapeutic application segment includes oncology, cardiovascular diseases, central nervous system diseases, infectious diseases, immunological disorders, respiratory disorders, and others. The oncology subsegment is expected to have 29.3% of the market share in 2024 driven by a soaring cancer drug pipeline. With the prevalence of cancer on the rise, pharmaceutical firms are devoting huge R&D investments towards developing innovative oncology therapies. Additionally, immunotherapy and personalized medicine are opening new opportunities in this field requiring specialized expertise. CROs have emerged as strategic partners to biopharmaceutical industry in oncology with their dedicated centers housing state-of-the-art technologies and a pool of trained oncology researchers. Their multi-disciplinary approach aids faster design and execution of clinical trials. Further, their global networks help find the best suited patients and sites for studies. These advantages coupled with rising complexity of oncology studies have made CROs an invaluable resource, driving the largest revenues in the oncology segment.

Insights, Size of CROs: Extensive Service Portfolios

The size of CROs segment includes small size (less than 100 employees), medium size (100-500 employees), and large size (more than 500 employees). The large CROs (more than 500 employees) subsegment is expected to have 41.2% of the market share in 2024. Large CROs have extensive service portfolios covering the entire drug development lifecycle from pre-clinical to post-marketing. Their economies of scale allow investments in advanced lab infrastructure, large teams of specialists, and a global delivery footprint. This enables centralized project management of even the most complex multi-country studies. Large CROs also have robust quality systems and regulatory compliance processes certified by global health authorities. Furthermore, their financial might supports constant innovation through strategic acquisitions and partnerships. Pharmaceutical clients therefore prefer large trusted CROs to handle their most high-profile programs globally. In addition, large CROs have dominated the market through organic as well as inorganic growth over the past decades to cement their leadership positions.

Market Report Scope

Key Developments

• In March 2024, Veeda Clinical Research Limited, a full-service contract research organization (CRO) with a proven record of drug development success, announced that it had acquired Heads, a privately-held European CRO which specializes in conducting clinical trials in oncology. Through this acquisition, Veeda Clinical Research Limited entered the league of global CROs with integrated capabilities to extend contract research services from discovery to clinical development extending to post commercial launch.
• In November 2023, Ichor Life Sciences, a full-service contract research organization (CRO) and longevity biotechnology company, announced the launch of Ichor Clinical Trial Services. Ichor Clinical offers a spectrum of customized clinical trial solutions, ranging from individual service options to full CRO assistance.
• In September 2023, Parexel International Corporation, a contract research organization (CRO), and Partex, a data-to-drugs pharma platform, announced a partnership aiming to leverage artificial intelligence (AI)-powered solutions to accelerate drug discovery and the development for biopharmaceutical customers worldwide and de-risk the assets in their portfolios. Under the partnership, Partex’s clinical trial execution by the Partex group of companies will be managed by Parexel as the preferred CRO provider. The organizations will also collaborate on improving clinical trial execution for customers through the Partex-validated artificial intelligence (AI) platform, adding to and expanding Parexel’s existing AI tools and capabilities.
• In July, 2023, NAMSA, a world-leading MedTech Contract Research Organization (CRO) offering global end-to-end development services, announced its acquisition of CRI – The Clinical Research Institute, a Germany-based full service CRO. Combining the expertise of both organizations will position them as the leading MedTech CRO specializing in cardiovascular research services worldwide.
• In December 2021, IQVIA INC., a leading global provider of advanced analytics, technology solutions, and clinical research services to the life sciences industry, launched new research nursing and phlebotomy services to offer access to a global network of high-quality, credentialed professionals for patients participating in clinical trials. The IQVIA research nursing and phlebotomy teams possess the capability to conduct a diverse range of assessments, collect data and specimens, and provide assistance in the direct delivery and administration of investigational products to patients.

*Definition: The U.S. Contract Research Organization (CROs) Market involves companies that provide outsourced clinical trial and drug development services to pharmaceutical, biotechnology, and medical device companies. CROs take over portions of the drug development process, including study protocol design, patient recruitment, clinical evaluations, and regulatory submissions. By outsourcing various stages of clinical testing to well-established CROs, biopharma companies can control costs and focus internal resources on core drug development.

Market Segmentation

• Service Type Insights (Revenue, USD Bn, 2019 - 2031)
  • Drug Discovery
  • Preclinical studies
  • Early Phase I - IIa
  • Phase IIa - III
  • Phase IIIb – IV
  • Medical coding and writing
  • Monitoring
  • Clinical Data Management
  • Others
•  Therapeutic Application Insights (Revenue, USD Bn, 2019 - 2031)
  • Oncology
  • Cardiovascular Diseases
  • Central Nervous System Diseases
  • Infectious Diseases
  • Immunological Disorders
  • Respiratory Disorders
  • Others
•  Size of CROs Insights (Revenue, USD Bn, 2019 - 2031)
  • Small Size (Less than 100 employees)
  • Medium Size (100-500 employees)
  • Large Size (More than 500 employees)
• Key Players Insights
  • IQVIA INC.
  • ICON plc
  • Labcorp
  • Syneos Health
  • PROMETRIKA, LLC.
  • Premier Research
  • Caidya
  • Charles River Laboratories, Inc.
  • Parexel International Corporation
  • Medpace, Inc.
  • WuXi AppTec
  • Courante Oncology
  • EPS Corporation
  • Worldwide Clinical Trials