Generally speaking, the CRO (Clinical Research Organization) market is vast and diverse. This is because it encompasses a range of different industries and services. For instance, it includes Laboratory services, Clinical research, Early phase drug development, Infectious diseases, and more.
Increasing clinical trial activity is the primary driver for contract research organization (CRO) market growth. The increased need for time-efficient drug development fuels this trend. In addition, the growing prevalence of chronic diseases has increased the number of patients in the global pool. To achieve effective R&D outcomes, companies are relying on advanced technologies.
CROs are competing with biotechnology companies and academic institutes for R&D projects. These organizations provide dedicated drug discovery and development services. These providers work in close collaboration with pharmaceutical and biopharmaceutical firms. These organizations are involved in clinical trials for a variety of drugs.
The contract research organization (CRO) market is segmented into clinical research services, laboratory services, consulting services, and others. Its overall revenue is derived from the R&D budget of pharmaceutical companies.
Early-phase Drug Development
Developing new drugs requires a significant investment. The process typically takes 12 to 15 years. In the US, a new molecular entity can cost up to $1 billion.
As the demand for new medicines increases, more pharmaceutical companies are investing in R&D. This has increased the demand for contract research organizations. These are specialized biotechnology companies that provide vital services to life science companies.
An increase in clinical trials has boosted CROs’ market growth. Over the past decade, the number of industry-sponsored clinical trials has grown in Asia. These trials are conducted in several areas, including cardiovascular disease, diabetes mellitus, and hypertension.
The increasing need for time-efficient drug development has increased the demand for CRO services. However, the CRO market has been characterized by a need for more qualified professionals. The lack of skilled personnel has exacerbated the shortage to meet the challenges of pharmaceutical R&D technologies.
Early-phase drug development is a critical step in drug development. It involves using high-throughput compound screens to identify molecules interacting with a target. Then, these compounds are evaluated using signal pathways analysis, antibodies, and cell-based models.
The increasing prevalence of diseases, especially cancer, has prompted pharmaceutical and biopharmaceutical companies to focus on clinical trials for new drugs and treatments. Consequently, the dermatology CRO market for clinical research services is expected to register a strong growth rate in the coming years. The Asia Pacific region is anticipated to witness the highest growth rate during the forecast period.
Developing pharmaceutical infrastructure and growing demand in developing countries is expected to boost market growth shortly. However, the hidden cost of clinical research services is expected to hinder market growth.
The CRO services market is anticipated to grow at a 6.7% CAGR in the coming two decades. The primary factor responsible for the market growth is the increase in clinical trials. In addition, emerging biopharma companies are driving the industry’s growth. The increase in R&D expenditure by these companies will further augment the need for clinical trials. In addition, the industry is expected to benefit from the increasing use of advanced technologies and data-driven advancements. Moreover, the presence of contract research organizations in the region adds to the industry’s revenue.
Several infectious diseases require a biosafety level 3 (BSL-3) laboratory. This has increased the demand for contract research organizations to conduct clinical trials. As a result, many pharmaceutical companies are outsourcing these activities.
The infectious disease segment of the CRO market generated $608.8 million in revenue in 2021. This increased demand for specialized diagnostic tests is driving the growth of the contract research organization industry. As a result, the global market for contract research organizations is expected to expand rapidly over the forecast period.
In addition, government public health screening policies are supporting the increase in the prevalence of chronic diseases. This increases the demand for novel drugs and vaccines. The rising number of patients pool also drives the need for clinical lab testing services. These services are cost-effective and allow earlier diagnosis of diseases.
Several biotech and pharmaceutical companies partner with CROs to conduct their R&D activities. These partnerships have enabled companies to increase their manufacturing processes. Additionally, the growing number of clinical trials has boosted the growth of the drug discovery market.
The European CRO market is the second largest in the world. The rise of NCDs and other infectious diseases has fueled the need for contract research organizations. The market is also expected to grow at a faster rate in Asia. The region accounts for nearly 59% of the world’s population.
Among the world’s contract research organization (CRO) markets, North America dominates in revenue share. This market is expected to increase at a CAGR of 6.4% from 2022 to 2028. During this timeframe, the market is forecast to reach a valuation of USD 63,160 million.
Globally, pharmaceutical & biopharmaceutical companies are increasingly outsourcing their clinical trials to develop new medicines. These companies are also investing more in R&D. During the next five years, this trend is expected to continue.
The industry is fragmented. Several small and medium-sized companies are present in the global CRO market. However, the majority of the market shares are held by conglomerates. This leads to higher competition and lower entry barriers.