Clinical research organizations (CROs) have never had greater clout. As drug sponsors raced to shed fixed costs while simultaneously struggling to replenish anemic pipelines, CROs stepped in to shoulder more of the development workload.
Business boomed (even if profits sometimes haven’t) and CROs grew steadily in size and the scope of services offered. Making sense of this new reality was a central theme at the “Partnership in Clinical Trials Congress” (PCT) held last month in Hamburg, Germany.
“We have data that now suggests CROs globally employ more personnel to support drug development than do the pharma and biotech companies,” said Ken Getz, senior fellow, Tufts Center for the Study of Drug Development, and a keynote speaker at PCT. “We’re seeing profound changes in the CRO-biopharma relationship.”
CRO market size estimates vary, but it’s broadly agreed there are at least 1,100 CROs worldwide and that CRO revenue now exceeds $20 billion, with some predicting revenue could reach $30 billion in 2015. A handful of giants—Quintiles, Covance, PPD, Parexel, ICON, etc.—dominate the landscape, but many more small and medium-size CROs also serve the market.
The biggest change, said Getz, is a shift toward strategic, integrated relationships that place “much more operational risk and resource risk” on CROs. “Whereas in the past companies used to engage CROs primarily for capacity or expertise in a very specific task—it might be a medical writer or a study monitor for a specific project—now many major and mid-size pharma and biotech companies engage a preferred CRO to provide a whole suite of activities for an entire portfolio.
“A company like Pfizer, for example, might choose to work with two CROs, and give one of them an entire program to do everything soup to nuts. The CRO will have or engage all the investigator sites, monitor all the sites, collect, clean, and manage the data. It will analyze the data and write up the submission. You are really giving the CRO all of the operating activities in the program,” Getz said.
“It’s really the largest CROs that have been able to service these strategic alliances. They have the scale,” said Getz. “These are longer-term relationships and there’s a very high cost for the sponsor to switch and change that relationship, so the largest CROs are securing and locking up that part of the market.”