April 20, 2024
U.S. Contract Research Organization

The Booming Contract Research Organization Industry in the United States

The pharmaceutical research and development industry in the United States relies heavily on Contract Research Organizations, or CROs, to outsource various services related to drug development. As the complexity and costs of drug development have increased substantially over the past few decades, pharmaceutical companies have turned to CROs more and more to handle certain stages of the process. This has led to immense growth in the CRO industry in recent years.

The Rise of Outsourcing in Pharma R&D

Outsourcing non-core functions has become the norm for large pharmaceutical companies facing immense financial pressures. Drug development costs in the US have ballooned to an average of $2.6 billion for each newly approved drug, a substantial increase from prior decades. At the same time, pharmaceutical profit margins have been squeezed due to patent cliffs, government price controls in some markets, and increased competition from generics. To cut costs and focus internal resources only on critical Drug Research and Development activities, pharma companies began outsourcing more work to CROs starting in the 1990s.

CROs specialize in areas such as clinical trials management, laboratory testing, regulatory consulting, and data management. They provide dedicated experts and infrastructure at lower costs than pharma companies building these capabilities in-house. Outsourcing non-core work to CROs allows pharma to be more nimble and reduce fixed costs. A 2020 industry report estimated that global pharma outsourcing to CROs was worth $51 billion, with strong growth projected to continue.

Types of Services Offered by Leading US CROs

Major US CROs offer a wide range of specialized services to pharmaceutical and biotech clients at various stages of clinical research:

Clinical Trials Management: Large CROs like PPD, IQVIA, and Labcorp have experience managing all phases of global clinical trials for drugs and devices. They recruit patients, collect/analyze trial data, and ensure regulatory compliance.

Laboratory Services: CROs like Charles River, Covance, and PPD operate labs conducting drug analysis, bioanalysis, toxicology and other preclinical testing to accelerate the drug discovery process.

Consulting Services: In addition to hands-on research support, CROs provide regulatory, biostatical, and clinical trial design consulting to improve clients’ overall research capabilities and strategies.

Data Management: With vast amounts of data generated during clinical trials, CROs help streamline data collection, integrate sources, perform quality checks and prepare study reports for health authorities.

Translational Research: Some CROs focus on translating early stage academic research into actual drug candidates and assisting with licensing and partnerships. This brings academic innovations closer to commercial use faster.

Leading CROs in the Region

The US is home to some of the largest global U.S. Contract Research Organization  due to the size of the domestic pharmaceutical market and world-leading research universities. Here are some of the major players:

– IQVIA (formed via merger of IMS Health and Quintiles): With over 75,000 employees worldwide, IQVIA is the largest CRO offering full service clinical to commercial capabilities.

– Labcorp: A global life sciences company with 75,000 employees and over 2,000 clinical trials underway. It is among the top providers of central laboratory services to support clinical research.

– PPD: Employing over 26,000 globally, PPD focuses on clinical research for pharmaceutical and biotech companies across Phase I-IV. It has experience in managing over 7,500 clinical trials.

– Charles River: This CRO operates over 100 research facilities globally. Its strong expertise is in early stage drug discovery services, laboratory testing and research models.

– PRA Health Sciences: A mid-size CRO specializing in clinical trials with particular strengths in data management and biostatistics.

– Syneos Health: Formed via merger, Syneos offers the full spectrum of drug development and commercialization services.

Prospects for Continued Growth

The demand for CRO services continues to grow as pharmaceutical R&D becomes more complex. Industry experts project the global CRO market will be worth over $70 billion by 2024. Even as individual drug trial costs rise, outsourcing more work to expert CROs helps pharmaceutical companies keep overall R&D expenditures in check and pipeline productivity high. As long as cost pressures remain, CROs are positioned for more deals. They are also expanding services like real-world evidence studies and digital technologies for more integrated support throughout the drug life cycle. Consolidation within the oligopolistic CRO industry is expected to continue as well. With a supportive regulatory environment and world-leading biopharma cluster, the US will maintain its dominance in the global CRO market.

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