Pharma is increasingly outsourcing substantial aspects of business to single service providers and this, as well as consolidation, reduces the number of opportunities available to contract research organisations (CRO). In this new environment CROs must adapt to continue growing.
The adaptation process could include mergers, according to a report by BioCrossroads, Indiana’s life sciences initiative. Merging could improve CROs’ chances of success as they compete for a smaller number of large pharma clients.
BioCrossroads believes this reduction in the pool of large pharmas will favour big CROs. For CROs that are too small to effectively compete, and are unable to grow by merging, the report recommends specialising in niche services, such as recruiting from underserved populations.
Specialisation is already being pursued as a strategy by some service providers. For example, CRO Encorium is focusing on vaccine research and eClinical firm Datatrak said finding a niche is necessary to compete against the industry giants.
Biomarker development
The report also states that in 2010 CROs will become increasingly important in the development of biomarkers. Pharma companies are under pressure from payers to ensure products give positive clinical outcomes and this is driving the need to understand mechanisms of action.
CROs position as research partners means they will play a significant role in developing biomarkers that can be utilised as companion diagnostics to their clients’ therapeutics.
This trend is supported by CROs investments in the field of biomarkers. Covance, Icon, Quintiles and WuXi AppTec are among the CROs making investments in biomarkers, although PPD has done the opposite, selling its unit to Caprion Proteomics.