Pharma has met with both cost and revenue challenges and responded by increasing levels of outsourcing and by exploring ways to shift to a more variable cost base because it’s less costly, often faster and provides pharma with greater flexibility. Challenges of drug development over the years have increased, yet also have the opportunities.

As the world economy is seemingly in a constant state of change, the clinical development industry as a whole is under greater pressure to achieve even higher levels of value without higher costs. This is already having an effect, and the industry is seeing exciting opportunities develop in the following three areas: growth in the use of personalized medicine techniques, streamlining clinical development design, and the rise in acceptance of risk-based monitoring approaches. It is imperative to work with clients to help design studies where patients entering studies are optimally selected to achieve clinical benefit and also explore with clients how to achieve even greater quality while lowering the costs of traditional on-site data verification by utilizing remote monitoring techniques. The combination of these three major changes will transform our industry.

The pharmaceutical sector and the outsourcing sector have certainly been affected by the recent economic downturn. Pharma companies have been under significant pressure to reduce costs and remodel their internal development organizations and biotechnology funding has been tight. However, drug development activity appears to have rebounded and CRO revenues are now forecasted to grow by around 10% per annum between 2012 and 2015 having been fairly flat over the past few years. While it may not be a harsh environment, it is a more focused, competitive landscape where provided you have a global and integrated operating platform then high quality, delivery and outstanding customer service remain essential to future success.

There has been a lot of CRO consolidation in the past few years and there is probably more to come for many of the reasons discussed above. At each new trade conference there more and more new CRO players entering the market offering new solutions and ideas so it’s still a very diverse landscape and this is a strong positive. The top 6 CROs have a very broad service offering and have successfully focused on preferred provider relationships with top 15 pharma companies. The mid-tier CRO space will be the fastest growing segment as pharma companies outside the top 15 increasingly look to mid-tier CROs to develop more flexible and responsive strategic relationships. A recent Avoca Group survey stated that 53% of big pharma, 70% of mid-sized pharma and 85% of small company respondents were best suited to the top 6-15 CROs and smaller CROs when thinking about future customer requirements – and for any service organization, the customer is king!

Western based businesses are focused on emerging markets - pharmaceutical companies and CROs alike. For pharmaceutical companies, growth in demand for drugs in emerging markets is outpacing Western markets and for CROs it is increasingly important to acquire patients in these regions. CROs are constantly driven to expand their footprint in order to improve their ability to recruit patients. Still, the US and Europe will remain important markets to sell and develop drugs for a long time to come. Western regions will remain in the mix and the parameters of particular trials will continue to require regions other than the emerging markets for regulatory and marketing purposes. While emerging markets are becoming a greater feature of the drug development landscape, they still contribute less than 10% of patients to trials. The CRO sector has been good at scaling up in new regions over the past 30 years to meet customer demands as regulatory and operational needs require them to do so. Clearly, improved regulations and standards in emerging regions are very welcome and are good for the industry. It’s likely that in 30 years CROs will be doing a third of their patient recruitment in today’s emerging markets and will no doubt be discussing the new emerging regions for clinical development. 

The regulatory process needs to be made simple, kept safe and strive for global consistency. For the industry, quality is key. Without a high quality regulatory product, in line with the latest national and regional regulatory requirements, all other clinical trial services could be impacted by possible delays in start up and recruitment. Getting the regulatory quality in place to begin with greatly increases the probability that the overall study will be a success, both in terms of delivery and client satisfaction. Patients’ wellbeing is of utmost importance and are kept top of mind always. CROs have a role to play in protecting the rights of patients. In today’s world, patients have far greater access to information about their disease and that in itself means they are better aware of treatment options available to them. This does help patients avoid participating in trials without realizing what they are getting into. Our industry needs to recognize these changes and actively engage patients and patient support groups in the trial process where feasible.

Going forward, many of the challenges being faced will continue, although perhaps the benefits of outsourcing are better understood today. It’s still important to find the best people; it’s still important to have deep therapeutic knowledge and efficient systems and processes; it’s still important to keep costs down and to be utterly focused on service delivery to your clients. In addition, outsourcing is becoming more sophisticated and clients require flexible, innovative solutions to meet their specific internal challenges, be that reducing their internal cost base and focusing solely on the science, or reaching out for targeted support where needed.