The Healthcare Contract Research Outsourcing Market is estimated to be valued at US$ 130.3 Bn in 2023 and is expected to exhibit a CAGR of 15.% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:
The healthcare contract research outsourcing market involves outsourcing of different research studies, clinical trials, drug discovery activities and other related services from pharmaceutical and biotechnology companies to contract research organizations (CROs). CROs help pharmaceutical and biotech companies to reduce expenditure on in-house research activities. The need to focus on core competencies and increasing drug research and development activities are some major factors driving growth of this market.

Market key trends:
One of the key trends contributing to the growth of healthcare contract research outsourcing market is increasing drug research and development activities. Pharmaceutical and biotech companies are outsourcing more clinical trial services and early phase drug discovery activities to CROs in order to reduce costs and focus on their core drug development competencies. According to Pharmaceutical Research and Manufacturers of America (PhRMA), the biopharmaceutical companies’ research and development expenditure in the U.S. grew from US$ 58.8 billion in 2010 to US$ 83.8 billion in 2019. The rising pharmaceutical RD expenditure reflects increasing drug research activities, which is generating high demand for CRO services and thereby fueling market growth over the forecast period.

Porter’s Analysis

Threat of new entrants: The healthcare contract research outsourcing market requires large capital investments and specialized skills which pose high entry barriers for new companies.

Bargaining power of buyers: The presence of many pharmaceutical and biotechnology companies as buyers in this market allows them to negotiate better prices and terms.

Bargaining power of suppliers: A few large contract research organizations dominate this market, giving them significant power over drug developers and life sciences companies.

Threat of new substitutes: There are no close substitutes for specialized clinical trial and research services provided by CROs.

Competitive rivalry: Intense competition exists among top CROs to capture more market share and deal with pricing pressures.

SWOT Analysis

Strengths: Established capabilities in clinical development and regulatory expertise. Access to global patient pools and diverse geographic resources.

Weaknesses: High employee turnover rates. Vulnerable to pricing pressures from clients.

Opportunities: Growth in outsourcing of specialized services like data management, biostatistics and medical writing. Emerging markets expected to drive future trials.

Threats: Stringent regulations. Increased insourcing by large pharmaceutical companies. Cybersecurity and data privacy challenges.

Key Takeaways

The global healthcare contract research outsourcing market is expected to witness high growth, exhibiting CAGR of 15% over the forecast period, due to increasing RD outsourcing among drug developers and biotechnology companies. North America currently dominates the market due to presence of major pharmaceutical companies and growing clinical research activities in the region. The Asia Pacific region is expected to be the fastest growing market at a CAGR of over 18% owing to low-cost advantages and growing clinical trial participation in China, India and other Asian countries.

Regional analysis: Asia Pacific region is expected witness fastest growth in clinical research outsourcing due rising costs and time required for new drug development in Western markets. Countries like China and India offer comparatively lower costs for clinical trials along with large patient pools.

Key players operating in the healthcare contract research outsourcing market are IQVIA Inc, Covance Inc (a subsidiary of Labcorp), Pharmaceutical Product Development Inc (a subsidiary of Thermo Fisher Scientific Inc), Parexel International (MA) Corporation, Charles River Laboratories, ICON plc, Medidata, Inventiv Health, Inc. (a subsidiary of Syneos Health), Medpace, and Piramal Enterprises Ltd.