CRO market to reach $45.2bn by 2022
Valued at more than $27bm in 2014, the global CRO market is expected to grow at a CAGR of more than 6.0% over the next seven years.
According to the report, the factors contributing to this growth include increasing R&D, outsourcing and M&A activity, patent expirations, as well as government organizations assigning projects to the CROs.
Read more: CRO market in Asia to see 'significant increase' through 2020
Phase III trials specifically dominated in 2014, with revenues estimated at more than $11bn, as approximately 90% of the cost associated with drug development occur at this stage.
According to the report, “With the increasing number of patents expiring, increasing number of partnerships to identify biologics and new compounds and growing R&D costs, drug maker and sponsor companies are under pressure to replace the revenue loss specifically due to generics, which has further made drug development more expensive and complex.”
Additionally, the occurrence of chronic diseases, such as cancer, Alzheimer's, and other infectious diseases, has caused the government to increase funding for research and development. For example, the US announced a $215m investment into a precision medicine imitative in January 2015.
The government is also among those turning to CROs to carry out clinical trials – last year the Canadian Federal Budget invested $1.33bn in the Canada Foundation for Innovation (CFI).
Global reach
North America holds the largest part of the market, with more than 40% of its revenue. Europe, the second largest market, can attribute its standing to the tax benefits offered to companies in order to promote CRO activities.
According to the report, large companies can claim a 30% deductible from the income of their R&D expenditure, and small and medium-sized enterprises can deduct 225% for the R&D expenditure.
While North American and Europe may currently hold the majority of the market, Asia-Pacific is the fastest growing industry, as the cost of developing a drug in these countries is significantly lower.
Other factors, such as an “increasing incidence rate of chronic and lifestyle diseases,” as well as a larger, treatment naïve patient pool are also contributing to this growth.
