Drug companies take an average of 88 weeks to complete Phase I trials, 139 weeks for Phase II trials and III trials, compared with only 66, 81 and 97 weeks for a CRO, according to a report by market research firm Business Insights.
This is partly because even the largest and most financially stable drug developers often don't have sufficient resources to efficiently carry out R&D in-house due to the broad range of skills required to bring a novel compound to market.
As a result, time-to-market was the second most important driver for drug companies seeking CRO services in 2005, second only to cost, and more than 43 per cent of companies surveyed for the report planned to increase their degree of outsourcing by a further ten per cent or more this year.
Time saving in R&D is increasingly vital to drug companies, who are struggling to claw back return on investment, revive flagging pipelines and replace lost revenue resulting from increasing generic competition.
R&D spending has risen dramatically in recent years - in the US alone, jumping from $26bn (€20bn) in 2000 to $39bn in 2004 - however, the number of new drug approvals continues to fluctuate with no apparent relationship to spending.
Pharma firms are fast realising that bringing drugs to market more quickly is one way of countering a lower number of product approvals, as it allows them to bring in revenues from drug sales earlier.
For blockbusters with annual sales of more than $1bn, revenues from an early launch can be substantial and amount to more than $2.7m per day, said the report, titled "Pharmaceutical Outsourcing Strategies: Market expansion, offshoring and strategic management in the CRO and CMO marketplace."