CRO's A-OK

Most academics and analysts consider increasing specialization a sign of maturity and efficiency within an industry. Luminaries like Henry Ford and Steve Jobs may have had visions of controlling every part of the manufacturing process, but more and more companies take the approach of focusing on a narrow part of the process and outsourcing everything else. 

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.