Contract Research Organization Market Supplier Intelligence – Increasing Outsourcing of Clinical Research by Pharmaceutical Companies to Reduce R&D Expenditure is Aiding to the Growth of CRO market

Grand View Research, Inc.

The COVID-19 pandemic has increased the adoption of decentralized clinical trials due to its critical benefits of contactless virtual trials and improving the patient and physician experience. Clinical trial sponsors are continuously trying to make clinical trials faster and improve the experience for patients and physicians. A decentralized trial has emerged as a critical solution. It involves bringing an increasing proportion of a trial’s activities to the patients instead of using the traditional method of bringing patients to a trial site. As health-system resources became consumed by COVID-19-related care and travel became limited by physical distancing, patients’ access to trial sites was reduced by 80%. The number of monthly trials declined by 50% from January 2020 to April 2020, and 60% of CROs reported a significant reduction in trial activities in May 2020. In the face of such disruption, sponsors mobilized rapidly to preserve the continuity of care and data integrity, by adopting remote consent and patient monitoring, videoconference assessments, and at-home phlebotomy.

Many big CROs have already started adopting decentralized clinical trials. Parexel is leading the trend with more than 160 decentralized clinical trials and implemented around 200 remote patient engagement strategies (patient recruitment and retention platforms, e-visits/video dosing regimens, and patient insight projects) incorporated into trials.

Contract Research Organization Market Procurement Intelligence report, by Grand View Research, deep dives into the following insights from the industry:

• Pharmaceutical companies prefer outsourcing clinical trial activities to control R&D expenditure, therefore providing a boost to the growth of the CRO market – CROs posses diversified expertise in conducting clinical trials across multiple geographical locations, and drug development for specific procedures and therapeutics. CROs are currently aiming to develop innovative sourcing and procurement methods to optimize the cost of clinical trials in order to increase profits.
• With number of M&As and strategic partnerships happening, the global CRO market is moving towards a consolidation – Increased number of M&As within the CRO industry have enabled industry participants to combine expertise and enhance service quality. Such strategic collaborations will allow established corporations in the industry to increase their reach and penetrate specific regional markets which were earlier catered to by smaller players, and, simultaneously keep the costs under control.
• Suppliers widely prefer approved provider operating models to reduce risks and improve the potential for value creation – Suppliers are expected to move from offering generic services to proprietary services in the future.

Contract Research Organization Market Cost Intelligence – Key Components: 

Grand View Research has identified the following key cost components for availing CRO services: 

• Clinical procedure
  • Regulatory affairs
  • Drug safety management
  • Drug logistics
  • Biological sample logistics
  • Clinical supplies logistics
  • Medical writing
  • Project management
  • Quality control
  • Pass-through costs
• Site identification and selection
• Site contracting and payments
• Site initiation and activation
• Site management
• Onsite monitoring
• Site close-out
• Patient recruitment
• Patient management
• Study files/document management
• Data management
• Statistics
• Communication with central CRO/sponsor
• O&M insurance
• Other costs
• Taxes
• Profit

Clinical procedure is the major cost component of a CRO, accounts for more than 45% of the total cost of service.

CRO Market Supplier Intelligence – Capability based ranking & selection criteria with weightage:

Operational Capabilities –

• Years in Service – 15%
• Geographical Service Presence – 35%
• Employee Strength – 15%
• Revenue Generated – 15%
• Key Clients – 12%
• Certifications – 8%

Functional Capabilities –

Patient management – 40%

• Patient recruitment
• Patient retention
• Patient monitoring
• Others

Site management – 40%

• Site recruitment
• Site retention
• Site monitoring
• Others

Others – 20%

• Physician recruitment
• Data management
• Regulatory affairs management

List of key suppliers in the contract research organization Market:

• Covance (Lab. Corp.)
• IQVIA
• Syneos Health
• Parexel
• PRA Health Sciences
• PPD
• Charles River
• ICON
• Wuxi AppTec
• MedPace

Addon Services offered by Grand View Research:

• Should Cost Analysis – In the CRO industry procurement Intelligence report, we have estimated and forecasted pricing for the key cost components while availing services from CROs. Clinical procedures (Drug logistics, medical writing, project management, quality control, drug safety management, etc.) are the largest cost component of CRO services. It accounted for more than 50% of the overall cost of CRO services. The cost of clinical procedure services is majorly driven by the salary of key personnel and therapeutic area.
• Rate Benchmarking – The geographic location where the clinical trial is being conducted plays a major role while analyzing the rate benchmarking of a CRO service. In our research, we have analyzed the rates of oncology clinical trials, as it is the most common type of clinical trial across the globe. For instance, breast cancer phase 3 clinical trial cost in India and China is 90% lower than the clinical trial cost of the U.S and the U.K. Conducting clinical trials via CRO in Western European and North American countries needs double the cost of conducting clinical trials in APAC.
• Salary Benchmarking – Our research indicates that Principal Investigators and Clinical Research Co-coordinators of IQVIA earn 10%-15% higher salaries than Principal Investigators and Clinical Research Co-coordinators of Covance and Syneos Health. However, Syneos Health and Covance have a 10% YoY increment compare to IQVIA’s 7%-8%. We have also found that IQVIA and Covance offer 36% higher bonuses to principal investigators compare to Syneos Health
• Supplier Newsletter – It is cumbersome for any organization to continuously track the latest developments in their supplier landscape. Our newsletter service helps them remain updated, to avoid any supply chain disruption which they may face, and keep a track of the latest innovations from the suppliers. Outsourcing such activities help clients focus on their core offerings.

A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of supply chain which helps in efficient procurement decisions. 

Our services include (not limited to):

• Market Intelligence involving – market size and forecast, growth factors, and driving trends
• Price and Cost Intelligence – pricing models adopted for the category, total cost of ownerships
• Supplier Intelligence – rich insight on supplier landscape, and identifies suppliers who are dominating, emerging, lounging, and specializing
• Sourcing / Procurement Intelligence – best practices followed in the industry, identifying standard KPIs and SLAs, peer analysis, negotiation strategies to be utilized with the suppliers, and best suited countries for sourcing to minimize supply chain disruptions

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