The global healthcare contract research outsourcing market is increasing at a compounded annual growth rate of 14.7 percent and is expected to be valued at $65.03 billion by 2018, according to a new report from market research firm Transparency Market Research.
The report, "Healthcare Contract Research Outsourcing Market – Global Industry Analysis, Size, Share, Trends and Forecast, 2012 – 2018," found that the contract research outsourcing market is being propelled by the recent and impending patent expirations of some of the most successful brand name drugs of all time and the inability of the current product pipeline to make up for the lost revenue.
Global pharma and medical device companies are transitioning to an outsourcing model for several functions, including clinical trials, medical writing and regulatory processes, according to the report.
There are a few main factors leading to the increase in outsourcing, said Harpreet Singh Buttar, senior research analyst at Transparency Market Research.
“The global contract research outsourcing market is driven by cost savings, globalization of drug and medical device development and reduced productivity,” said Buttar. “The research outsourcing process also enables pharmaceutical companies to break free from the basic research and support processes and focus on drug R&D.”
“As the regulatory guidelines and approval processes are becoming increasingly stringent, most pharmaceutical companies are outsourcing their research activities in an attempt to curb their R&D expenses,” added Buttar.
While outsourcing is an attractive option for many companies, there are some drawbacks, including quality and efficacy issues, he said.
“The research activities (that are) outsourced are still facing challenges in terms of meeting requisite standards and maintaining data integrity,” said Buttar. “This is creating an apprehension in some sections of the industry to outsource.”
Among the most common countries for outsourcing are China, India, Australia and Brazil, said Buttar.
“These countries possess abundant expertise and technology to handle research processes related to the industry and support the pharma giants who are involved in continuous research related to advanced therapies and life saving drugs,” he said.