Preclinical Research Outsourcing Services: Global Markets

Executive Summary

Outsourcing preclinical services of the drug discovery and development process offers the pharmaceutical industry a wide range of opportunities to develop and commercialize, innovative methods and technologies. Outsourcing is an attractive approach for investigations that are too complex, too expensive, and too lengthy otherwise to be conducted in-house. In previous times, outsourcing was seen as a short-term strategy for demand realization. Now, it is considered as the key lever for the core competencies to increase performance in pharmaceutical research. Outsourcing can positively impact research performance because it lowers the cost and time associated with new innovations.

There are two ways to outsource services:

• Full vertical integration, which maximizes operations conducted in-house.
• Virtual operations, which relates to full outsourcing and where all operations are methodically outsourced to third parties.

The outsourcing service providers/CROs market continues to exhibit significant growth, largely attributed to increased demand for services in clinical trials including preclinical research. The proliferation of therapies for orphan drugs and precision-based medicines, preclinical and clinical trials are becoming increasingly complex, which is driving demand for sophisticated outsourcing partners with expertise in preclinical services, disease registries, real world evidence, medical affairs and risk-based monitoring. Expanding service offerings and capabilities remain a predominant strategy among CROs.

The geographic distribution of clinical research is slowly shifting from developed nations to emerging countries in regions such as Central and Eastern Europe, Asia-Pacific and Latin America. Also, the greater disease difference among developing countries offers more diverse population samples, particularly for rare disease studies.

IQVIA Inc. , Labcorp PPD Inc. , Syneos Health, Charles River Laboratories International Inc. and Medpace are the CRO industry’s dominant players. Mergers and acquisitions among these and other large companies in the preclinical research outsourcing continues at an extraordinary pace, driven by high valuations and the increasing need to become complete service providers. Current pharmaceutical R&D spending is driven by precision-based medicines and immunotherapies for smaller populations, genetic therapies for oncology, rare disease treatment and generally more demanding and complex protocols for drug development.

The preclinical research environment continues to be tied to exorbitant costs as complex therapies requiring larger and more diverse samples increases the time required and geographies involved in conducting a typical trials. To rein in costs and shorten development timelines, pharmaceutical and biopharma firms are increasingly outsourcing services to CROs. In addition to complex therapies, combination regimens increase timelines and difficulties. Today, CROs operate more efficiently and improve quality and timeliness for sponsors despite the increasing complexities of studies. This is bolstering CRO penetration in all stages of development.