CROs are now becoming proactive and preempting the needs of drug companies, by approaching them with a ready-made product to market, where traditionally they would have waited for the drug company to approach them to provide a service.
The landscape of the pharmaceutical industry has been changing, with only a handful of big pharmaceutical companies now dominating the market after a series of mergers and acquisitions over the years.
As a result there are a large number of smaller pharmaceutical companies that need to find a niche in the market to compete and are hungry for new products to market - this is where the new generation of CROs are finding a role.
Outsourcing-Pharma.com spoke to Dr Andrew Muddle, CEO, >MedPharm, to see how his UK company is moving beyond its traditional boundaries.
MedPharm, a CRO providing drug formularisation services to the pharmaceutical industry, has realised the benefits of using its existing MedSpray technology to develop its own reformulated versions of off-patent products to license to drug companies.
The company is now beginning to branch out into this area, while still continuing to provide its traditional contract research services of seeking new formulation technologies to make a product commercially viable or revamp an old product.
Currently, the composition of MedPharm's business is 80 per cent contract research services and 20 per cent product development.
"However, we expect this to change to 50:50 within the next three years with the product development arm proving much more lucrative than contract services due to ongoing licensing and milestone payments," said Dr Muddle.
In the past, 80 per cent of drugs brought to market have been oral formulations, so the drug formulation industry has until recently been quite small.
However, the drug formulation industry has seen a 38 per cent growth in the past five years and is expected to continue to boom as there is now a real trend in drug companies turning to specialist formulation companies to find different ways of marketing both new and old compounds, by divising new formulations.
MedPharm is currently reformulating one eczema product and two acne products into sprays, which it then intends to lisense.
Currently the global acne market is worth $2 billion a year - $970 million of which comes from the US - and the eczema market in the US is worth $700 million.
The company believes it can revamp this market, which is dwindling due to many drugs going off patent, and initially plans to focus on the US because the pricing structure is more lucrative than elsewhere.
In addition, getting a new formulation of a product through US regulatory approval is not as laborious as it used to be as the new 5052B regulation has been introduced, allowing less data to be submitted, although clinical trials are still required.
MedPharm is now also beginning to look at using their MedSpray technology in transdermal drug delivery applications.