Contract Research Organization Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Contract Research Organization market is segmented by Service Type (Clinical Research Services (Phase I Clinical Research Services, Phase II Clinical Research Services, Phase III Clinical Research Services, and Phase IV Clinical Research Services), Early-phase Development Services, Laboratory Services, and Consulting Services), Therapeutic Area (Oncology, Infectious Diseases, Central Nervous System (CNS) Disorders, Immunological Disorders, Cardiovascular Diseases, Respiratory Disorders, Diabetes, and Other Therapeutic Areas), End User (Pharmaceutical and Biopharmaceutical Companies, Medical Device Companies and Academic Institutes), and Geography (North America, Europe, Asia-Pacific, Middle-East and Africa, and South America). The report offers the value (in USD million) for the above segments.

Market Snapshot

Contract Research Organization Market Bar Graph
Study Period: 2018 - 2026
Base Year: 2020
Fastest Growing Market: Asia Pacific
Largest Market: North America
CAGR: 7.4 %

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Market Overview

The Contract Research Organization Market was valued at approximately USD 41,168 million in 2020, and it is expected to witness a revenue of USD 63,160 million in 2026, with a CAGR of 7.4% over the forecast period.

The impact of the COVID-19 pandemic on the contract research organization market is expected to be significant due to the ongoing clinical trials on the verge of developing effective therapeutics and vaccines against the SARS-CoV2 virus. For instance, in January 2021, ICON PLC announced that it collaborated with Pfizer Inc. and BioNTech, and provided clinical trial services in the development of Pfizer and BioNTech's investigational COVID-19 vaccine program. As a part of this program, ICON worked in more than 153 sites in Europe, South Africa, the United States, and Latin America for the recruitment of 44,000 participants for the clinical trial studies and also provided site training, document management, along with the operational support for patient informed consent form review. ICON also coordinated eConsent in most countries and assisted with clinical supply management services. Additionally, in July 2020, IQVIA and AstraZeneca collaborated to aid in the development of AstraZeneca's COVID-19 vaccine as a part of the US Government's Operation Warp Speed Project, which is focused on the development, manufacturing, and distribution of COVID-19 vaccines, therapeutics, and diagnostics. Thus, owing to the increased focus on the vaccine development against COVID-19, there has been an increase in the clinical trials, which is expected to boost the contract research organization market during the COVID-19 pandemic era.

Contract research organizations provide support to the pharmaceutical, biotechnology, and medical device industries. The market growth can be attributed to the growing R&D expenditure, increased outsourcing of R&D activities, and a rising number of clinical trials. Efficiency is considered as the most important factor in light of the financial burden faced by pharmaceutical companies from all directions. Patent expiries leading to generic rivalry and stringent demands from regulators continue to have an impact on the bottom lines of pharmaceutical companies.

According to the Pharmaceutical Research and Manufacturers of America (PhRMA), the total R&D expenditure by the biopharmaceutical industry in the United States was estimated to be USD 102 billion in 2018. Additionally, the PhRMA members had invested nearly USD 83 billion in R&D activities in 2019. Furthermore, more than 260 vaccines are in the pipeline by the biopharmaceutical companies for various diseases, including COVID-19 as per PhRMA, 2020. As per the article published by UK Parliament, 2021, the total expenditure on R&D was EUR 37.1 billion, which accounted for EUR 558 per head, or the equivalent of 1.7% of GDP in 2018 in the United Kingdom. Hence, with the strong investment in R&D activities with a pipeline of therapeutics under development, the outsourcing services are expected to witness growth, which leads the contract research organization market to propel over the forecast period.

The increasing number of services offered by CROs and the rising trend of collaborations are also driving the market growth. For instance, in October 2020, PPD Inc. announced its expansion through the opening of a new multipurpose clinical research laboratory in Suzhou, China, to offer bioanalytical, biomarker, and vaccine services for clinical trials across all phases of pharmaceutical development. Thus, owing to the aforementioned factors, the studied market is expected to register significant growth over the forecast period.

Scope of the Report

The contract research organization market report covers the companies involved in contract-based research, development, and consulting services in the healthcare industry. Contract research organizations offer several services, including regulatory submission, clinical operations, data management, biostatistics, and quality assurance. The contract research organization market is segmented by service type, therapeutic area, end user, and geography. By service type, the market is segmented into clinical research services (phase I clinical research services, phase II clinical research services, phase III clinical research services, and phase IV clinical research services), early-phase development services, laboratory services, and consulting services. By therapeutic area, the market is segmented into oncology, infectious diseases, central nervous system (CNS) disorders, immunological disorders, cardiovascular diseases, respiratory disorders, diabetes, and other therapeutic areas. By end user, the market is segmented into pharmaceutical and biopharmaceutical companies, medical device companies, and academic institutes. By geography, the market is segmented into North America, Europe, Asia-Pacific, Middle-East and Africa, and South America. The report offers the value (in USD million) for the above segments.

By Service Type
Clinical Research Services
Phase I Clinical Research Services
Phase II Clinical Research Services
Phase III Clinical Research Services
Phase IV Clinical Research Services
Early-phase Development Services
Laboratory Services
Consulting Services
By Therapeutic Area
Oncology
Infectious Diseases
Central Nervous System (CNS) Disorders
Immunological Disorders
Cardiovascular Diseases
Respiratory Disorders
Diabetes
Other Therapeutic Areas
By End User
Pharmaceutical and Biopharmaceutical Companies
Medical Device Companies
Academic Institutes
Geography
North America
United States
Canada
Mexico
Europe
Germany
United Kingdom
France
Italy
Spain
Rest of Europe
Asia-Pacific
China
Japan
India
Australia
South Korea
Rest of Asia-Pacific
Middle-East and Africa
GCC
South Africa
Rest of Middle-East and Africa
South America
Brazil
Argentina
Rest of South America

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Key Market Trends

The Early-phase Development Services Segment is Poised to Witness Robust Growth Over the Forecast Period

With a growing number of patents expiring, the competition from generic counterparts of drugs is increasing and drug makers are under pressure to replace the revenue loss due to generics. Furthermore, R&D costs are increasing due to the complexity of drug molecules and more stringent regulatory requirements. Drug discovery and development processes are becoming increasingly complex. To counter this complexity and streamline the operations, pharmaceutical firms are outsourcing early drug development processes. Additionally, leading CROs have developed significant expertise in the field of early-phase development, and CROs are leveraging this expertise to offer highly efficient and accurate early-phase development services. CROs are also allowing small- and mid-size firms to enter the complex drug development process without significant investment in capital equipment. Pertaining to these reasons, the early-phase development services segment is poised to register robust growth rates.

Additionally, as per clinical trials.gov, as of March 2020, nearly 1058 clinical trials were being conducted globally in the early phase development stage in the field of oncology. In November 2020, Parexel International also entered into a strategic partnership between Parexel's Early Phase Clinical Unit (EPCU) in Berlin, Germany, and Clinical Trial Center (CTC) North, a full-service CRO located at the University Medical Center Hamburg-Eppendorf (UKE), to meet the increasing demand for the early phase clinical trials during the current COVID-19 pandemic. Thus, in view of the above-mentioned factors, the studied segment is expected to propel significantly over the forecast period.

Contract Research Organization Market Key Trends

North America Captured the Largest Market Share and it is Expected to Retain its Dominance Over the Forecast Period

Pricing pressure due to the changing reimbursement scenario and generic competition is causing major pharmaceutical firms to outsource R&D and clinical trials, which is supplementing the growth of CRO services in the North American region. The increasing R&D investment by pharmaceutical companies in the development of novel therapeutics is driving the studied market growth in the region. In October 2020, FDA awarded six new grants of an amount of more than USD 16 million for a period of 4 years to fund the clinical trials carried by academia and industry players, through the Orphan Products Grants Program, to advance the development of therapeutics in the treatment of rare diseases.

Additionally, as per the US Research and Development Funding and Performance: Fact Sheet, 2020, the R&D expenditures in the United States in 2018 were estimated to be USD 580 billion, of which USD 96.5 billion was invested on basic research, USD 115.0 billion on applied research, and USD 368.5 billion was employed in the development sector. The presence of key players in the region and strategic collaborations by these companies are driving the market growth. For instance, in February 2021, Parexel International partnered with Neogenomics to enable the application of Neogenomics' real-world genomics data in oncology clinical trials, thereby leading to the increased efficiency in patient matching and optimizing trial design, site selection, clinical development, and translational research. Thus, the high R&D investment and initiatives by key players in the expansion of the product portfolio are expected to boost the development of new drugs, in turn increasing the demand for outsourcing the services for clinical trials and drug development. Thus, the aforementioned factors are expected to boost the growth of the contract research organization market in the North American region.

Contract Research Organization Market Growth Rate By Region

Competitive Landscape

The Contract Research Organization Market is highly competitive and consists of many players. However, globally, few major players control a major share of the market. The remaining market share is heavily fragmented, with the presence of several local and niche players. Companies like IQVIA, ICON PLC, Charles River Laboratories, Envigo, and PPD Inc. lead the contract research organization market. The major players in the market accumulated a huge amount of data, which is being employed to attain a competitive edge in the market. Additionally, the major players are involved in strategic alliances to secure a position in the global market. For instance, in September 2020, PPD Inc. collaborated with LUPUS Therapeutics with a strategy to expand and enhance lupus clinical research for PPD’s pharmaceutical and biotech customers.

Recent Developments

  • In February 2021, ICON PLC entered into a definitive agreement to acquire PRA Health Sciences Inc., thus expanding its portfolio in healthcare intelligence and clinical research.
  • In February 2021, Charles River Laboratories entered into a definitive agreement to acquire Cognate BioServices Inc., a cell and gene therapy contract development and manufacturing organization (CDMO), to expand Charles River’s scientific capabilities in the high-growth cell and gene therapy sector.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Market Drivers

      1. 4.2.1 Growing R&D Activities by Biopharmaceutical Companies

      2. 4.2.2 Increasing Number of Clinical Trials

      3. 4.2.3 Growing Trend of Outsourcing and Cost Savings Enabled by Using CRO Services

    3. 4.3 Market Restraints

      1. 4.3.1 Shortage of Skilled Professionals

    4. 4.4 Porter's Five Forces Analysis

      1. 4.4.1 Threat of New Entrants

      2. 4.4.2 Bargaining Power of Buyers/Consumers

      3. 4.4.3 Bargaining Power of Suppliers

      4. 4.4.4 Threat of Substitute Products

      5. 4.4.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Service Type

      1. 5.1.1 Clinical Research Services

        1. 5.1.1.1 Phase I Clinical Research Services

        2. 5.1.1.2 Phase II Clinical Research Services

        3. 5.1.1.3 Phase III Clinical Research Services

        4. 5.1.1.4 Phase IV Clinical Research Services

      2. 5.1.2 Early-phase Development Services

      3. 5.1.3 Laboratory Services

      4. 5.1.4 Consulting Services

    2. 5.2 By Therapeutic Area

      1. 5.2.1 Oncology

      2. 5.2.2 Infectious Diseases

      3. 5.2.3 Central Nervous System (CNS) Disorders

      4. 5.2.4 Immunological Disorders

      5. 5.2.5 Cardiovascular Diseases

      6. 5.2.6 Respiratory Disorders

      7. 5.2.7 Diabetes

      8. 5.2.8 Other Therapeutic Areas

    3. 5.3 By End User

      1. 5.3.1 Pharmaceutical and Biopharmaceutical Companies

      2. 5.3.2 Medical Device Companies

      3. 5.3.3 Academic Institutes

    4. 5.4 Geography

      1. 5.4.1 North America

        1. 5.4.1.1 United States

        2. 5.4.1.2 Canada

        3. 5.4.1.3 Mexico

      2. 5.4.2 Europe

        1. 5.4.2.1 Germany

        2. 5.4.2.2 United Kingdom

        3. 5.4.2.3 France

        4. 5.4.2.4 Italy

        5. 5.4.2.5 Spain

        6. 5.4.2.6 Rest of Europe

      3. 5.4.3 Asia-Pacific

        1. 5.4.3.1 China

        2. 5.4.3.2 Japan

        3. 5.4.3.3 India

        4. 5.4.3.4 Australia

        5. 5.4.3.5 South Korea

        6. 5.4.3.6 Rest of Asia-Pacific

      4. 5.4.4 Middle-East and Africa

        1. 5.4.4.1 GCC

        2. 5.4.4.2 South Africa

        3. 5.4.4.3 Rest of Middle-East and Africa

      5. 5.4.5 South America

        1. 5.4.5.1 Brazil

        2. 5.4.5.2 Argentina

        3. 5.4.5.3 Rest of South America

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Company Profiles

      1. 6.1.1 Charles River Laboratories

      2. 6.1.2 Envigo

      3. 6.1.3 ICON PLC

      4. 6.1.4 IQVIA

      5. 6.1.5 Laboratoty Corporation of America Holdings (Labcorp)

      6. 6.1.6 MeDPace Holdings Inc.

      7. 6.1.7 PSI CRO AG

      8. 6.1.8 Parexel International

      9. 6.1.9 PPD Inc.

      10. 6.1.10 PRA Health Sciences

      11. 6.1.11 SGS SA

      12. 6.1.12 Syneos Health

      13. 6.1.13 WuXi Pharmatech

      14. 6.1.14 Axcent Advanced Analytics (A3)

      15. 6.1.15 BIO Agile Therapeutics

    2. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability
**Competitive Landscape Covers - Business Overview, Financials, Products and Strategies, and Recent Developments

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Frequently Asked Questions

The Global Contract Research Organization Market market is studied from 2018 - 2026.

The Global Contract Research Organization Market is growing at a CAGR of 7.4% over the next 5 years.

The Global Contract Research Organization Market is valued at 41168 Million USD in 2018.

The Global Contract Research Organization Market is valued at 63160 Million USD in 2026.

Asia Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2020.

ICON PLC, IQVIA, Charles River Laboratories, Envigo, PPD Inc. are the major companies operating in Global Contract Research Organization Market.

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