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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% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Healthcare contract research outsourcing involves the process of outsourcing clinical trials and research processes to CROs or contract research organizations by pharmaceutical, biotechnology and medical device companies. CROs offer various benefits such as cost-effectiveness, a wider range of capabilities, increase productivity and reduce development timeline. Early phase clinical research trials require specialized expertise such as disease analysis, bio-statistical analysis and translation services which are efficiently handled by CROs. This helps pharmaceutical and biotechnology companies focus on their core competencies.
Market key trends:
One of the key trends in the healthcare contract research outsourcing market is the rise in clinical trials in emerging economies. Emerging countries such as India, China and Eastern European countries offer significant cost savings of up to 50-70% as compared to developed countries for conducting clinical trials. In addition, growing healthcare infrastructure, availability of medical experts and presence of a large treatment naive patient population makes emerging countries attractive locations for clinical trials. For instance, India has over 300 CROs and 6,000 investigators involved in clinical research with great potential for future growth. This surge in clinical trials outsourcing to low-cost geographies is expected to continue driving significant demand over the forecast period.
Porter’s Analysis
Threat of new entrants: The healthcare contract research outsourcing market requires high capital investment and stringent regulations pose challenges for new players to enter the market.
Bargaining power of buyers: Large pharma companies have significant bargaining power over CROs due to their project volumes. Small biotech clients have relatively low bargaining power.
Bargaining power of suppliers: Due to high demand for outsourcing services, CROs have leverage in negotiating relationships and pricing with pharma/biotech companies.
Threat of new substitutes: Limited threat as CROs provide specialized clinical research expertise that is difficult to substitute.
Competitive rivalry: Intense competition exists among top CROs to win large, long-term contracts from big pharmaceutical companies.
Key Takeaways
The global Healthcare Contract Research Outsourcing Market is expected to witness high growth, exhibiting CAGR of 15% over the forecast period, due to increasing R&D expenditure and complexities in drug development process.
North America dominated the healthcare contract research outsourcing market in 2023 and is expected to maintain its dominance over the forecast period. This is attributed to presence of large pharma companies and growing biotech industry in the region. Asia Pacific is projected to witness fastest growth during the forecast period, driven by low cost of operations and rapid expansion of pharmaceutical industry in China and India.
Key players operating in the healthcare contract research outsourcing market are IQVIA Inc, Covance Inc, Pharmaceutical Product Development Inc, Parexel International Corporation, Charles River Laboratories, ICON plc, Medidata, Inventiv Health, Inc., Medpace, and Piramal Enterprises Ltd. Large players are focusing on strategic partnerships and acquisitions to expand their service portfolio and geographic presence.
