Many large CROs have now emerged that offer a full range of services covering drug development basically from start to finish.
Because of this reason, they are popular, particularly with larger pharma firms, and they are continuing to grow and make profits, however, there are some downsides with using these large firms, said Mark Lipscombe, a consultant at PA Consulting's Lifescience and Healthcare division, speaking at last week's "Outsourcing Clinical Trials" conference held by SMi in London.
Large firms usually have many business units under the same umbrella, often spread across the world, and there can be poor integration and communication between these individual units, even though they stand together under one global brand, he said.
Anne Maria Ylisaari, head of In- and Outsourcing at Orion Pharma echoed this in a separate presentation, adding:
"Be aware that companies who offer an end-to-end service often actually have a number of different companies operating under the same name that aren't actually very well integrated at all."
In addition, big companies are more likely to use subcontractors, she warned.
According to Ylisaari, the main advantage of niche providers is that they are usually experts in their field, whereas big companies may have some areas that they "do not master so well."
Smaller providers also tend to be more flexible, she said.
Adding to this, Lipscombe said that smaller CROs are often associated with a high quality service and the ability to respond quickly to clients needs.
Of course however, niche providers have the limitations of being small - with limited capacity, limited capabilities and limited global presence.
Because of this they normally attract the business of smaller biopharma firms, although there is a lot of joint venture and merger and acquisition activity currently going in this corner of the industry as more and more small CROs are attempting to broaden their offerings.
The larger firms will therefore be keeping a close eye on their smaller rivals.