The industry grew rapidly as manufacturers sought cost savings on research and development
Los Angeles, CA (PRWEB) March 07, 2013
The Contract Research Organizations industry is composed of firms that conduct clinical trials and research, manage data results and help develop and formulate new products to reach regulation standards. Contract research organizations (CROs) mainly serve clients in the pharmaceutical and medical device manufacturing industries. The industry experienced a period of aggressive growth during the past five years as operators have worked to provide clients with a full-service experience, from product conception to approval. “This new model has enabled CROs to shorten the drug or device development cycle,” says IBISWorld industry analyst Austen Sherman. “Furthermore, CROs have been particularly attractive to manufacturers because of the cost savings they have provided in the midst of tough economic conditions.” As a result, industry revenue is expected to rise at an average annual rate of 12.1% to $15.1 billion in the five years to 2013, including growth of 11.3% in 2013 alone.
In addition to expanding the level of services provided, Contract Research Organizations industry firms have benefited from an aging US population that has spurred a record number of drug approvals by the Food and Drug Administration in recent years. “The industry's largest operators have taken advantage of rising demand over the past five years to establish strategic partnerships with some of the largest pharmaceutical manufacturers,” adds Sherman. For example, major player Covance has partnered with Eli Lilly and Company and Bayer HealthCare; similarly, Parexel has partnered with Pfizer Inc. This new trend has increased the level of consolidation in the industry as operators look to provide niche services to meet all the needs of their partners. Consequently, IBISWorld estimates that the number of industry enterprises has risen only slightly, at an average rate of 0.8% per year, despite double-digit revenue gains. The industry is highly fragmented, despite the participation of several high profile companies in many of its segments. The low market share concentration is attributed both to the breadth of services provided within the industry and to the existence of many small, successful companies within each service area. CROs can range from large, international full-service organizations to small, niche specialty firms.
During the next five years, the industry is forecast to benefit from rising demand from biopharmaceutical companies. The development of biopharmaceuticals is still relatively new and will likely require a significant number of clinical trials to ensure product safety and effectiveness. This new market will be increasingly important as traditional pharmaceutical manufacturers will slowly become unable to allocate any more of their research and development budgets to CRO services. IBISWorld forecasts that industry revenue will increase during the five years to 2018. For more information, visit IBISWorld’s Contract Research Organizations in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes companies that provide research services on a contract basis to the pharmaceutical and biotechnology industries. Contract research organizations (CRO) provide biopharmaceutical development, preclinical research, clinical research and clinical trial management. Many CROs specifically provide clinical-study and clinical-trial support for drugs or medical devices.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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