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Pharma clinical outsourcing budgets to be slashed

By Kirsty Barnes , 19-Dec-2006

In the next one to two years there will be a trend towards significant reductions in clinical outsourcing/contract research organisation (CRO) budgets in the majority of biopharma firms, reveals a recent industry survey.

An overall pharma industry expectation of decline in outsourcing costs, most likely due to intensifying competition, rather from a decline in the rate of outsourcing itself, appears to be the source of this reduction, said the Frost & Sullivan report. Meanwhile, amidst the tightening of outsourcing budgets, the practice of outsourcing to CROs continues is showing no sign of slowing. More than 20 per cent of cardiovascular and oncology clinical development is currently being outsourced and the trend is set to increase for several other therapeutic areas, such as metabolic diseases, said the report, titled: "Competing in the US contract research market: What pharma & biotech companies want and how to compete for their business." Furthermore, the report confirms what we are already witnessing in the industry - the shift towards clinical trial globalisation - as more and more CROs gain international capabilities in order to tap into new patient pools and cut trial times and costs. As a result, North America's share of clinical trials activity is expected to decrease from 61 per cent to 53 per cent in the next three to five years, the report said.

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