July 25, 2024
Contract Research Organization

The Growing Role of U.S. Contract Research Organizations in Clinical Trial Landscape

The Contract Research Organization (CRO) industry has experienced tremendous growth over the past few decades and now plays a pivotal role in drug development. A CRO is a company that provides support to the pharmaceutical, biotechnology, medical device and government/foundations sectors in the form of research services outsourced on a contract basis. These organizations help reduce costs and help sponsors focus on their core competencies. Some of the key services provided by CROs include clinical trial management, biostatistics, medical writing, imaging, regulatory and pharmacovigilance services.

The U.S. Contract Research Organizations emerged in the 1980s to help life sciences companies deal with rising costs of drug development and increasing complexities of clinical research. Since then, the industry has evolved significantly due to several factors like globalization of clinical trials, need for specialized expertise, focus on niche therapeutic areas and need to improve efficiency. The U.S. remains the largest CRO market globally due to presence of pharmaceutical companies and availability of patient populations for clinical trials.

Factors Driving Growth of the U.S. CRO Industry

Rise in Clinical Trial Complexity

With advancement in sciences like genomics and other ‘omics’ technologies, clinical trials have become more complex involving niche patient populations, combination therapies, biomarker-focused trials and use of innovative trial designs. This has necessitated greater expertise that sponsors often lack. CROs able to provide therapeutically specialized services as well as innovative solutions have benefited.

Cost Pressures and Need for Flexibility

Pharma R&D spending has seen decline over the past few years putting pressure on productivity. Sponsors are increasingly relying on CROs which offer variable cost structures and flexibility to adapt operations according to evolving budgets and timelines. Outsourcing non-core functions helps reduce fixed costs.

Government Initiatives

Reforms by the FDA like 21st Century Cures Act and Real World Evidence Program have opened new avenues for real-world data in drug development. CROs supporting platforms for real-world and real-time data collection as well as analytics are witnessing increased uptake. Initiatives in precision medicine and orphan drugs also create opportunities.

Globalization of Clinical Trials

Over 60% of clinical trials now take place globally necessitating localization expertise. U.S. CROs leveraging their international footprint and relationships are preferred outsourcing partners. As an example, Asia now accounts for over 30% of the global clinical trial market requiring presence across diverse regions.

Major Players in the U.S. CRO Industry

The U.S. CRO industry is quite consolidated with top players accounting for a major share of the revenues. Some of the leading CROs headquartered in the U.S. include:

IQVIA: Formed through mergers of Quintiles, IMS Health and CRC Group, IQVIA is currently the largest CRO globally with revenues of over $11 billion. It provides broad clinical, technology and commercialization services across many therapeutic areas.

PAREXEL International: With revenues of around $3.5 billion, PAREXEL focuses on bio/pharmaceutical services and drug development. It caters to both large and small biopharma companies offering end-to-end solutions.

LabCorp Drug Development: A unit of LabCorp, it is among the top players providing centralized laboratory, program management and biomarker services. It works on many oncology studies.

PPD: Another top player with revenues in excess of $4.5 billion. It has sizable presence in areas like central labs, clinical monitoring, biometrics and vaccine/infectious disease research.

ICON: Majority of ICON’s revenues come from late phase clinical development and commercialization services for pharmaceutical and biotech companies globally.

Emergent Biosolutions: While not a pure play CRO, it provides development and commercialization services for medical countermeasures and devices through its subsidiaries.

Role of Mid-sized and Small U.S. CROs

While the big CROs cater to large pharma, emergence of niche and specialist mid-sized CROs has been notable. Many focus on specific therapeutic areas, modalities, populations or geographical regions. Further, small CROs often provide targeted services or act as subcontractors to larger organizations.

Some examples include Catalent (cell & gene therapies), Syneos Health (rare/orphan drugs), NeoImmuneTech (immunotherapy), SynteractHCR (decentralized trials), Medpace (oncology). Their roles range from assumption of key global study responsibilities to local implementation support.

Future Outlook

The COVID-19 pandemic fueled more outsourcing as it disrupted operations and prioritization for sponsors. The U.S. CRO market emerged as a resilient partner supporting vaccine/therapy development. Going forward, areas like data solutions, real-world evidence, decentralized/virtual trials are poised to grow. Cell/gene therapy expertise will also be crucial as regenerative medicines evolve. Overall, the market for CRO services in the U.S. is projected to expand at a rate of around 10% a year through 2027, underscoring the critical function these organizations play. Their roles will keep innovating to address changing industry needs.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it