Enter the CRO
The pharmaceutical and biotechnology industry is no different. While most companies do maintain in-house R&D capabilities, more and more they look to outside firms for critical steps in the process. One of the biggest industries to spring up to serve the pharma sector is contract research organizations (CROs). CROs help firms research new compounds, optimize lead candidate identification, conduct early-stage testing and facilitate the late-stage clinical trials that the FDA requires for approval.
There are now believed to be more than 1,000 CROs worldwide, and this sector captured about 20% of the global bio-pharma research budget in 2008. Given the exceptional costs of conducting clinical trials, as well as the complexity and intricacy of patient management and data analysis, it is fair to assume this percentage is going to increase. Simply put, bio-pharma companies are skilled at developing compounds and (particularly in the case of big pharma) marketing them, and conducting their own trials is a hassle that many organizations have learned they just do not need. (For more see, Measuring The Medicine Makers.)
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The original article indicated that ICON is a British company. This is incorrect. ICON is headquartered in Ireland. The piece will be corrected.
2 comments:
That was a good brief CRO industry overview, and I'm inclined to agree with the longer term bullish sentiment. The CRO industry did suffer during the credit crisis as big pharma focused on mergers and pipeline refocusing in the face of reform, and biotech dealt with a very rough funding environment. A return to growth does seem apparent from here, but watchfulness is still called for in my opinion.
The article would have benefited from some mention of Quintiles, which while not public, is still the dominant CRO.
@ HelicalZZ - thanks for the comments. I certainly agree that pharma is going to renew its R&D efforts; they simply have to to recharge their pipelines.
As for Quintiles ... I agree that it deserved a mention. I was up against the limit for space, though, and had to make a strategic decision to focus on the public companies. Still, I could and should have included at least a line about them...
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