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The life sciences BPO market comprises contract research organizations, contract manufacturing organizations, and contract sales and marketing organizations. Offshoring of R&D activities and manufacturing processes helps life sciences companies to reduce overall operational costs and enhances profitability. Growing demand for outsourcing core functions such as discovery, preclinical, clinical and drug development, and commercialization services is expected to drive the market growth. Life sciences BPO service providers offer cost-effective and time-efficient services along with technical expertise, enabling pharmaceutical and biotech companies to focus on their core competencies.
The global Life Sciences BPO Market is estimated to be valued at US$ 222.9 Bn in 2023 and is expected to exhibit a CAGR of 14.% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the key trends witnessed in the global life sciences BPO market is increasing focus on offshoring of R&D activities. According to a study published by PharmaTimes in 2017, around 50% of global clinical trials were being outsourced to Asia, specifically India and China. Lower labor and infrastructure costs compared to developed countries makes Asia an attractive outsourcing destination. Several domestic and international pharmaceutical companies are establishing R&D centers and contract manufacturing facilities in emerging Asian economies. For instance, In June 2022, Dr. Reddy’s Laboratories opened an R&D center in Hyderabad, India to focus on developing biosimilars and Novel Drug Delivery Systems. Growing focus on reducing discovery to market timelines and regulatory requirements are also encouraging pharmaceutical companies to offshore non-core operations to specialized CROs and CMOs based in Asia and Latin America. This is expected to propel the growth of life sciences BPO market during the forecast period.
Porter’s Analysis
Threat of new entrants: The life sciences BPO market requires high initial investments and regulatory compliances. This poses significant entry barriers for new players.
Bargaining power of buyers: Buyers have moderate to high bargaining power due to the presence of a large number of service providers in the market. Buyers can conveniently switch between vendors based on price and quality of services.
Bargaining power of suppliers: Key life sciences BPO service providers possess specialized skills and technological capabilities. This gives them negotiations power over buyers.
Threat of new substitutes: No close substitutes exist for the core services provided in the life sciences BPO market. However, alternative business models like insourcing pose a mild threat to existing players.
Competitive rivalry: The market is highly competitive with major global players competing for market share. Price wars and service differentiations fuel the competition in the industry.
Key Takeaways
The global life sciences BPO market is expected to witness high growth, exhibiting CAGR of 14.% over the forecast period, due to increasing focus on lowering operational costs. The market size for 2023 is US$ 222.9 Bn.
Regional analysis: North America dominates the global life sciences BPO market currently, owing to presence of large pharmaceutical companies in the US. However, Asia Pacific is anticipated to grow at the fastest pace during the forecast period supported by low-cost services and government initiatives for the healthcare sector.
Key players: Key players operating in the life sciences BPO market are Accenture, Plc Boehringer Ingelheim GmbH, Charles River Laboratories International, Inc., Cognizant Technology Solutions, Covance, Inc., DSM, Fareva, ICON, Plc, Infosys, Catalent, Inc., Genpact Limited, Health Decisions, Inc., and ProMab Biotechnologies, Inc. These market leaders are engaged in activities such as new service launches, acquisitions, partnerships and regional expansion to strengthen their market position.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
