Rising cost, growing complexities of conducting clinical trials and increased pressure from regulatory agencies to adopt various techniques to minimize the costs involved for successful introduction of a drug in the market has compelled pharmaceutical players to adopt new outsourcing models. All these factors have helped fuel market growth of the Life Sciences BPO industry in the past decade. In addition, rise in the number of patent expirations and failure of drugs during the clinical trials process has triggered the overall growth of pharmaceutical outsourcing industry. Moreover, outsourcing aids the biotechand pharmaceutical industry to focus on their core strategies and utilize their internal resources for more critical in-house projects.
The Contract Manufacturing Organizations (CMOs) outsourcing services accounts for the largest segment of the overall Life Sciences BPO market. Growing healthcare costs has led to a rise in the demand for generic drugs and this has consequently led to growth in demand for active pharmaceutical outsourcing services. Moreover, CMOs conduct internal R&D to come up with novel technologies to further support their clients. The API manufacturing market accounts to be largest segment of the total CMO market. This growth has been attributed to increase in outsourcing activities for pharmaceutical manufacturing outsourcing, owing to increasing regulatory compliance such cGMP and other approvals. Moreover, manufacturers do not have all the technologies and expertise available in-house required for manufacturing different APIs and hence, outsourcing serves as a more cost effective solution for pharmaceutical companies. Also, the growing importance of biological drugs calls for distinctive manufacturing technology.
The Contract Research Organizations (CROs) outsourcing services market has also witnessed significant growth in the past decade. This growth has been attributed to the rising costs involved in conducting various phases of clinical trials ranging from drug discovery up to post marketing approvals. Pharmaceutical companies are now opting tooutsource their clinical trial activities to vendorscapable of providing bundled services such as regulatory services, clinical data management, medical writing, site management, pharmacovigilance, risk based monitoring, biostatics, protocol development and others. The drug discovery services segment accounted for the largest market share in 2012.Since a large number of molecules fail during the drug discovery process, through outsourcing the pharmaceutical companies are mitigating their financial risks and avoiding sunken costs through partnership with CROs. However, clinical data management outsourcing services market is expected to foresee the highest growth rate of 17.3% from 2013 to 2019. This high growth has been attributed to the growing adoption of advanced IT services such cloud applications and enhanced software services provided by Information Technology Outsourcing (ITO). Data security and Intellectual Property Rights (IPR)still persist to be major hindrance for growth of this industry.
Geographically, North America accounted for the largest share of the global pharmaceutical outsourcing services market in 2012 and was valued at USD 28.4 billion in 2012 followed by Asia-Pacific. The Asian-Pacific region is expected to represent the highest growth rate of 21.2% during the forecast period owing to availability of trained resources, low cost labor, favorable regulatory policies and huge patient pool suffering from varies chronic diseases. Moreover, the companies from this region are now meeting the required manufacturing and quality standards of the USFDA and EMEA to further boost market growth.
The major players in this market include Catalent Pharma Solutions, Lonza Group, Parexel International, PRA International, Piramal Healthcare, Charles River Laboratories, PPD (Pharmaceutical Product Development), Cognizant, Accenture, IBM, Quintiles, Covance and others.
Economic burden, increased financial crisis and technological advances has compelled all pharmaceutical, biotechnology and life science companies to outsource their R&D activities and manufacturing processes in order to achieve their cost benefits and save time.In recent years, large number of life science companies has modified their traditional drug manufacturing operationswith more focus now on their core R&D activities and manufacturing processes via outsourcing. At present, new outsourcing strategies and types of services are developing in almost every stage of research and manufacturing process. For instance, a virtually integrated, cross-functional outsourcing of drug discovery research is currently being considered as a latest outsourcing model, especially for small molecule drug discovery. In addition, genomics &proteomics research and gene–silencing technology are now being widely used for target identification and validation of complex disease targets.
Global Life Sciences BPO market includes Contract Manufacturing Organizations (CMOs), Contract Research Organizations (CROs) and others that compriseContract Sales Organization (CSO). The contract manufacturing organizations market is expected to see the highest growth rate during the forecast period and also accounted for the largest market share in the year 2012. This market holds immense growth owing to the rise in demand for generic drugs, increase in R&D investment by life sciences companies. In addition, a rise in the number ofblock buster drugs going off-patent and increased adoption of novel technologies are further boosting the growth of this market. The CMO market comprises contract API (Active Pharmaceutical Ingredients) manufacturing, contract FDF (Finished Dosage Formulations) manufacturing and packaging.Among these, contract FDF manufacturing segment is expected to have a healthy growth rate during the forecast period. The CRO market is also expected to display a healthy growth rate after CMO market. The CRO market comprises of various segments such as drug discovery, pre-clinical studies, clinical trial phases, medical writing, clinical data management, pharmacovigilance, regulatory services, site management, protocol development, monitoring and bio-statistics. Among these, clinical data management segment is expected to have a strong growth rate in coming years. This growth has been attributed to its high data complexities, high cost involvement and requirement of skilled & trained professionals.
Geographically, the North American region constituted the largest market for global life sciences BPOmarket in 2012; however, Asia-Pacific is predicted to foresee the highest growth rate of over 21.2% from 2013 to 2019. This growth has been attributed to favorable government regulations, improved intellectual property protection rights and increased adoption of novel technologies. In addition, tax benefits, low labor costs andother overheads and availability of skilled professionals at a very low cost compared to developed nations would trigger the growth of this market in Asia-Pacific region.
The major players of this market are CatalentPharma Solutions, PRA International, Covance, Quintiles, Parexel, DSM, Charles River Laboratories, Piramal Healthcare and BoehringerIngelheim.