The contract research organization services market is projected to reach USD 86.5 billion by 2026 from USD 53.2 billion in 2021, at a CAGR of 10.7% during the forecast period. Growth in the contract research organization (CRO) services market can mainly be attributed to factors such as increasing investment in pharmaceutical R&D to drive CROs services market, increasing number of clinical trials, and rising prevalence of orphan and rare diseases.
Contract research organization (CRO) services market dynamics: Driver: Increasing investment in pharmaceutical R&D to drive the CROs services market
Most pharmaceutical, biopharmaceutical, and medical device companies continue to invest heavily in the development of novel drugs and devices. The pharmaceutical industry, in particular, is R&D-intensive. Pharmaceutical companies invest in R&D to deliver high-quality and innovative products to the market. The trend suggests that the top pharma companies are increasing their R&D efficiencies through heavy investments in R&D to see return on their investment in the longer term and through collaborative R&D efforts. According to EvaluatePharma report, the worldwide pharmaceutical R&D spending was valued at USD 136 billion in 2012; this increased to USD 186 billion in 2019.
Challenges: Shortage of skilled professionals
CROs face challenges in attracting and retaining highly skilled professionals as they compete with pharmaceutical, biotechnology, and medical device companies as well as academic and research institutions for qualified and experienced scientists. To compete effectively, companies have to offer higher compensations and other benefits; this may affect the finances and results of operations of players, especially small-scale analytical testing providers. This shortage of skilled professionals may hamper the adoption of new technologies and methodologies, and inhibit the growth of the CRO services market in the coming years
Opportunity: Growth in the drugs and biologics market, despite of COVID pandemic
Despite of ongoing Covid-19 pandemic in 2020, the pharmaceutical industry has been the second-best year in terms of the number of drugs approved by the US FDA. This year witnessed the authorization of 53 drugs—a number surpassed only in 2018 with 59 pharmaceutical agents. The 53 approvals in 2020 include 40 new chemical entities and 13 biologics which comprised of 10 monoclonal antibodies, 2 antibody–drug conjugates, 3 peptides, and 2 oligonucleotides. The FDA has authorized 160 drugs in the last three years (2018–2020), compared to the approval of only 21 drugs in 2010. This growth in the number of approved products worldwide is attributed to the growing investments by biopharmaceutical companies in order to develop biologics and biosimilar.
Pharmaceutical & biopharmaceutical companies segment accounted for the largest share of contract research organization (CRO) services market
Based on end user, the global CRO services market is segmented into pharmaceutical & biopharmaceutical companies, medical device companies, and academic institutes. In 2020, the pharmaceutical & biopharmaceutical companies segment dominated the market owing to increased outsourcing of early-phase development services and clinical and laboratory testing services by pharmaceutical companies.
North America accounted for the largest share of the contract research organization (CRO) services market
The contract research organization (CRO) services market is segmented into North America, Europe, the Asia Pacific (APAC), Latin America (LATAM), and the Middle East and Africa (MEA). In 2020, North America accounted for the largest share of the contract research organization (CRO) services market, followed by Europe. The large share of the North American regional segment can be attributed to presence of a well-established base of pharmaceutical & biopharmaceutical companies, and high investments in the biosimilars & biologics segment.
Market Key Leaders:
The prominent players operating in the contract research organization (CRO) services market are IQVIA (US), LabCorp (US), Charles River Laboratories (US), WuXi AppTec (China), Syneos Health (US), PPD (US), and ICON Plc (US).
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