Contract Research Organizations in the US Industry Market Research Report from IBISWorld Has Been Updated
New York, NY (PRWEB) March 29, 2015 -- The Contract Research Organizations industry includes operators that conduct clinical trials and research, manage data results and help develop and formulate new products to help their clients reach regulation standards. Contract research organizations (CROs) mainly serve clients in the pharmaceutical and medical device manufacturing sectors. Industry operators provide clients with a full range of services, from early- to late-stage clinical research for Food and Drug Administration (FDA) approval. CROs help boost efficiency, offering drug manufacturers the ability to channel their resources towards core operations, such as drug innovation. According to IBISWorld Industry Analyst Stephen Morea, “CROs are also attractive to drug companies because they offer cost savings, as operators in this industry, through their size and specialization, can achieve greater cost efficiencies due to economies of scale.” The industry experienced a period of aggressive growth during the past five years, benefiting from an aging US population and an expansion in private health-related research and development (R&D) expenditures. As a result, industry revenue is expected to grow significantly during the five years to 2015.
Higher R&D expenditures have spurred a record amount of drug approvals by the FDA in recent years. The Contract Research Organizations industry has also benefited from the patent cliff, which began in 2011 and marks the patent expiration of more than 300 drugs. As a result, generic drug manufacturers have dashed to take advantage of this opportunity, hiring CROs to test and trial generic versions of popular drugs. Consequently, CROs are experiencing significant growth from specific service areas within the generic drug market, such as adaptive trials, specialized medicine and orphan drugs.
The Contract Research Organizations (CROs) 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. In 2015, the top four players are expected to account for a relatively small share of total US industry revenue, according to IBISWorld estimates. Globally, the largest industry players exhibit a higher concentration as many of these companies have operations overseas.
Over the past five years, the fragmented structure of the industry has spurred a number of mergers and acquisitions, joint-ventures and other deals, in particular among the industry's major players, as companies attempted to expand their services and geographical footprint. “Regulatory pressures have helped increase demand for larger clinical trials and a rise in development timelines have further encouraged industry operators to consolidate,” says Morea. However, high industry profit margins and robustly increasing industry revenue has spurred new entrants into the industry. As such, IBISWorld estimates that the number of industry operators has increased substantially in the five years to 2015.
During the next five years, the industry will continue to benefit from increased R&D spending and an aging US population in increasing need of disease treatment. The industry will also benefit from rising demand from biopharmaceutical companies. The rise of biopharmaceuticals, in addition to the development of genomics and drugs tailored to the unique genetic profiles of individual or specific diseases, will require a significant amount of clinical trials to ensure product safety and effectiveness. As a result, IBISWorld forecasts that industry revenue will increase strongly during the five years to 2020.
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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.
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About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
Gavin Smith, IBISWorld, +1 (310) 866-5042, [email protected]
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