Global Clinical Trials Outsourcing Market - Focused Insights 2024-2029

MARKET INSIGHTS

The global outsourcing clinical trials market was valued at USD 46.15 billion in 2023 and is projected to grow to USD 70 billion by 2029, exhibiting a CAGR of 7.19% throughout the forecast period. The rise in market size is primarily fueled by the increasing intricacy of clinical trial regulations, difficulties with patient recruitment, and a shortage of skills and resources. In addition, the escalating expenses associated with clinical trials, coupled with the competition among biopharmaceutical companies, medical device manufacturers, and other entities engaging in clinical trials to expedite product launches, are key factors driving growth.

More than half, or 50% to 60%, of clinical trial activities worldwide are outsourced to Contract Research Organizations (CROs). Factors such as substantial investments in research and development, government initiatives, and the growing rivalry in the pharmaceutical sector have facilitated the uptake of clinical trial outsourcing services, as these services help decrease costs and timelines while enabling the introduction of new products to the market with improved success rates.

MARKET DEFINITION

Clinical trial outsourcing refers to a service where either all clinical trial tasks or specific components of a trial are contracted out to a CRO instead of being managed internally by the company. This approach allows clinical trial sponsors to reduce costs and save time, concentrate on their core strengths, and optimize workflow. Outsourcing clinical trials aims to improve the efficiency of research and related processes while enhancing the likelihood of successful trial results. Recently, the trend of outsourcing clinical trials for biopharmaceutical drugs and therapies, as well as medical devices, has been gaining significant traction due to the rising complexities involved in clinical trials. Furthermore, costs associated with clinical trials have surged compared to earlier years, primarily due to the incorporation of advanced technologies and tools in clinical trials. These dynamics have fostered significant growth opportunities for the industry.

MARKET DRIVERS & OPPORTUNITIES

Increased Focus on Expanding the Functional Service Provider Model

The approach of outsourcing clinical trials is experiencing significant growth across the globe as advancements continue. Within this trend, the Functional Service Provider (FSP) model has become more popular as organizations seek greater flexibility and oversight of their outsourced clinical trials. The FSP model delivers customized and tailored programs designed to address specific challenges. Key factors driving the use of the FSP model include cost-effectiveness, increased efficiency, and more adaptable resourcing. The FSP model is more affordable, typically around 40% less expensive than the full-service model. This cost advantage is a primary reason for the rising adoption of FSP in recent years. It represents a major opportunity for market expansion and substantial prospects for vendors to offer their outsourced services on a global scale.

Growth of Specialized Contract Research Organizations

The worldwide clinical trials outsourcing market has experienced various developments and transformations in recent times. One notable change is the rise of specialized CROs that focus on niche areas of clinical research, introducing new methodologies and models that enhance the clinical trials outsourcing landscape. The escalating challenge of managing rare and infectious diseases can be effectively addressed by these specialized CROs. These organizations also provide a tailored experience for trial sponsors, fostering deeper partnerships between CROs and sponsors as well as emphasizing clinical trial activities.

INDUSTRY RESTRAINTS

Extended Timeframes and Insufficient Transparency & Specificity

A frequent challenge within clinical trial outsourcing is that CROs often provide only superficial information about clinical trial processes to fulfill requirements. While sponsors seek detailed insights to manage risk-related clinical trials, contract research organizations frequently fail to present critical analyses of their trial work. There exists a notable lack of transparency among CROs when sharing data with sponsors. This limitation leads many large companies to select only a few prominent CROs for their projects. They must exercise caution regarding the choice of clinical trial partners available in the market. Sponsors primarily expect CROs to furnish sufficient details about feasibility projections, which often turn out to be overly optimistic, indicating a lack of specificity between the sponsors and the CROs. This issue significantly hinders market growth and diminishes the contributions of CROs to market development. In addition, the transparency deficit between contract research organizations and sponsors adversely affects the outsourcing services for clinical trials. At times, CROs fail to meet sponsors' expectations regarding communication, raising concerns for sponsors regarding clinical trial activities.

GLOBAL CLINICAL TRIALS OUTSOURCING MARKET INSIGHTS

• By Outsourcing Type: The functional service provider (FSP) segment captures the largest global clinical trials outsourcing market share at 49%. The FSP model offers a cost-effective strategy for clinical trials outsourcing, allowing sponsors to delegate specific functional components of clinical trials to partners while retaining control over the overall process and data concerning the trials. Presently, this model is gaining traction as it increasingly provides features tailored to meet the evolving needs of sponsors in response to changing outsourcing trends. The FSP model enhances efficiency in single-function outsourcing, scalability for dedicated teams, and leads to enhanced quality and consistency within clinical trials.
• By Phase: The phase III segment experiences notable growth, showcasing the fastest-growing CAGR of 7.70% throughout the forecast period. Phase III clinical trials require considerable investment and focus due to their complexity and strict regulatory standards. In phase III, participation from approximately 300 to 3,000 volunteers is needed for the study. This phase typically lasts between 1 to 4 years, making it longer than the others. The lengthy duration and the necessity for a substantial patient population render this phase more costly. Additionally, phase III focuses on evaluating drug efficacy and monitoring adverse effects. As a result, the adverse reactions linked to many drugs restrict their progression to the next phase to 25%–30%. This factor has contributed to heightened outsourcing needs for phase III clinical trials, driving growth in this segment.
• By Indication: In terms of indication, the oncology segment leads and commands the largest share of the global clinical trials outsourcing market. Oncology clinical trials are more complex than those in other therapeutic areas, primarily due to advanced precision medicine treatments. This area has historically encountered the most arduous trials, including significant indications such as breast, lung, colorectal, and prostate cancers. Since 2014, the overall complexity of clinical trials has been gradually increasing, driven by evolving regulations and rising costs. With the growing incidence of cancer, there is substantial demand for clinical trials within the market. The shifting landscape of cancer testing worldwide has resulted in a continuous rise in the number of patients affected by the disease, pressuring companies to invest in clinical trials for improved outcomes.
• By End-User: Regarding end-users, the bio & pharmaceutical companies segment leads the global clinical trials outsourcing market in both share and growth within the global clinical trials outsourcing sector. Bio & pharma companies are actively involved in research and development to maintain competitiveness, leading to an uptick in clinical trials conducted by these firms. However, the demands of internal operations and the necessity to uphold brand image, coupled with high investment costs, often drive these end-users to outsource clinical trials, resulting in significant market growth. Major biopharma firms are increasingly relying on contract research organizations (CROs) to oversee their clinical trials, ensuring the safety, effectiveness, and success of their studies. In a highly competitive environment, the maintenance of brand reputation and the management of budgetary constraints are pivotal factors fueling the demand for outsourcing.

GEOGRAPHICAL ANALYSIS

North America leads the global clinical trials outsourcing market, holding the largest share. The region's dominance is due to the highest number of clinical trials conducted by CROs. In North America, particularly in the US, numerous CROs are active, engaging in a vast number of clinical trials and facilitating studies sponsored by biopharmaceutical and medical device companies. The US and Canada are the foremost countries executing a substantial volume of clinical trials. Notably, the US has experienced significant advancements in clinical trials, aided by supportive FDA regulations and a rising acceptance of diversity and digitalization within the trials. The growing digital transformation in clinical trials is viewed positively.

COMPETITIVE LANDSCAPE

The global report on clinical trials outsourcing features exclusive information on 30 vendors. Charles River Laboratories, IQVIA, ICON plc, Laboratory Corporation of America Holdings, Syneos Health, Thermo Fischer Scientific, WuXi AppTec, and Paraxel International (MA) Corporation are among the primary companies commanding a significant share of the global clinical trials outsourcing market. These vendors provide innovative outsourcing solutions and service models that encourage clinical trial sponsors to delegate their trials, sustaining their market image internationally. Furthermore, strategies such as mergers and acquisitions, collaborations, and partnerships are key methods that fortify their market presence.

RECENT VENDOR ACTIVITIES

In 2021, ICON finalized its acquisition of PRA Health Sciences, which will enhance its operations to transform clinical studies and expedite services for biopharmaceutical clients.

Laboratory Corporation of America Holdings has executed 26 acquisitions and made 26 investments, spending over $3.3 billion on these acquisitions up until 2022. The company has invested significantly across various sectors, including genomics, life sciences, and oncology, among others.