Boom time for CROs?
research suppliers engaged in drug development work will grow
almost 15 per cent annually for the next five years, nearly double
the anticipated increase in overall R&D spending, according to
a new study.
The new study from Kalorama Information - Outsourcing in Drug Development: The Contract Research Market from Preclinical to Phase III - notes that the proportion of the industry R&D expenditure allocated to outsourcing in 2003 is estimated at about 26 per cent, or $13.6 billion, up from 25 per cent or $12 billion in 2002. This proportion is expected to increase to about 36 per cent, or $28 billion, by 2008.
The proportion of R&D expenses allocated to outsourcing is expected to increase at an annual rate of 14 per cent through to 2008. Kalorama predicts that the established contract research organisations (CROs) stand to gain the most from these spending increases. However, a variety of smaller organisations are also poised to reap the rewards.
In 2002, CROs made up two thirds of the market for contract research, with academic centres slipping back from a 50 per cent share in the mid-1990s to around 30 per cent. The remaining 3 per cent is made up of so-called site management organisations (SMOs), central laboratories, and niche players such as data-handling and recruitment companies. These small outfits are expected to increase their revenues, if not their market share, through to 2008.
"Although we've seen a big decline in the involvement of academic medical centres in the drug development process in recent years, they are starting to wake up," said Steven Heffner, Kalorama's acquisitions editor. "There are now several large academic consortia that are pooling their clout and their highly skilled personnel to give CROs a run for their money."
Nevertheless, the CRO sector is expected to consolidate its position and capture 80 per cent of the market in 2008, a share valued at $22 billion.
For more information on this report, visit Kalorama's website or e-mail Steve Heffner.
