by What are Contract Research Organizations?
Contract research organizations, commonly known as CROs, are companies that provide support to the pharmaceutical, biotechnology, medical device, and government/academic research organizations in the form of research services outsourced on a contract basis. They assist these organizations in the drug development process, including pre-clinical research, clinical research, clinical trial management, and post-marketing research. Some key aspects of CROs are described below.
Pre-Clinical Research Services
In the pre-clinical stage of drug development, U.S. Contract Research Organization (CROs) provide various services like discovery research, compound screening and testing, toxicology studies, pharmacokinetic profiling, assay development, and other pre-submission technical support. They have laboratories, vivariums and facilities to conduct these early-stage studies on behalf of their sponsors. Their specialized teams of scientists carry out research to evaluate drug candidates in animal and laboratory models before testing on humans. This work helps determine a compound’s viability, safety profile and maximize its chances of approval.
Clinical Research and Trial Management
Once a potential drug enters clinical trials, CROs take over the complex logistical work of designing and running these studies. This includes coordinating clinical operations, site and investigator management, patient recruitment and retention, data management, biostatistics, medical monitoring and reporting. Larger CROs have global networks of clinical trial sites that allow multi-national studies. Their expertise in clinical operations helps sponsors navigate regulatory requirements and reduce costs and timelines. CROs also take responsibility for safety monitoring and submission of regulatory documents to agencies like the FDA.
Post-Marketing Research Support
Even after drug approval, CROs continue supporting sponsors through the conduct of post-marketing studies, patient registries, and pharmacovigilance activities like safety surveillance. This includes additional clinical trials to explore new indications, formulations or patient groups a drug could target. CROs also provide services for retrospective database analyses, health economic outcomes research and other tasks.
Quality Assurance and Compliance
Maintaining strict adherence to Good Clinical Practice (GCP) standards and local regulations is paramount in clinical research. CROs have dedicated quality assurance teams that oversee compliance across their operations. They conduct audits, implement quality management systems, and train staff as per industry standards. This helps ensure the integrity and reliability of trial data submitted to regulatory bodies for approval. Their established processes and procedures are also designed to protect participants’ rights and safety.
Why Do Sponsors Use CROs?
Outsourcing non-core functions to specialized CRO partners provides sponsors several strategic advantages:
Cost Savings – CROs can reduce development costs through centralized resources and economies of scale. They assume the financial risk of conducting studies.
Access to Expertise – CROs have extensive therapeutic area expertise and can manage complex trials globally. Sponsors gain access to skills they may lack in-house.
Operational Flexibility – Using CROs allows sponsors to scale up or down operations quickly as program needs change. There’s no long-term commitment to maintaining internal staff.
Regulatory Compliance – CROs have demonstrated systems to comply with worldwide regulations, reducing sponsors’ compliance risks and responsibilities.
Faster to Market – CRO partnerships can expedite drug development timelines by parallelizing tasks. Sponsors can focus on core activities.
Talent Pool – CROs employ dedicated clinical research professionals globally and allow tapping their skills on an as-needed basis.
The U.S. Contract Research Organizations Landscape
The U.S. represents the largest and most mature CRO, accounting for over 50% of the global clinical outsourcing industry. According to industry estimates, the top CROs generated over $40 billion in revenue from clinical development services in 2020.
The CRO sector is highly consolidated, with the top 10 companies capturing around 70% of the total addressable. Leading American CROs include IQVIA, PRA Health Sciences, LabCorp Drug Development, Syneos Health, and PPD. They provide a broad range of outsourced drug development services across all phases of clinical research. Other notable domestic CROs include ICON, Medpace, Parexel, and Pharmaceutical Product Development (PPD).
CRO M&A activity has been robust, driven by consolidation and the growth prospects in emerging as more countries participate in global clinical trials. Several large pharmaceutical companies also operate in-house CRO divisions to handle their own fragmented outsourced trials. This creates a competitive dynamic alongside the independent CRO sector.
The future of the U.S. Contract Research Organizations is expected to witness further growth, innovation and specialization as the biopharmaceutical R&D pipeline remains robust, clinical trials become increasingly complex, and new models like site less or decentralized trials emerge. Outsourcing rate increases are also projected for later-phase post-marketing research. CROs will play a critical role in advancing important new medicines through the efficient execution of clinical testing programs.
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1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
