Drug trials
Small and medium-size contract research organisations (CROs) have huge potential. For the last few decades, pharmaceutical companies have increasingly chosen to use medium-size contract research organisations (CROs), or smaller organisations, rather than the larger organisations, due to their enhanced responsiveness and flexibility, that provides good geographic coverage, a broad therapeutic portfolio and years of experience in managing complex trials.
Their ability to advise companies on realistic time lines for the clinical development of drugs in a range of therapeutic areas, and on changes in regulatory guidelines, has placed them in an ideal position to handle major projects, while still offering clients a more personalised service than the largest CROs, according to the market consultancy firm Frost & Sullivan.
F&S reports that the European market for CROs earned revenues of US$4.80 billion in 2005, and estimates this figure will reach US$10.21 billion in 2012.
Against a backdrop of stricter regulations, guidelines, price and reimbursement legislation resulting in a changing business environment, research within the pharmaceuticals industry has tripled in the last 25 years, with the pipelines of the top companies doubling.
‘The growing market in drug development, and increase in R&D investment – including that of small (biotechnology) companies – coupled with an increase in development costs, the importance of timely development of new products and the need to reduce time-to-market, have emerged as important financial considerations for achieving business growth,’ said
Dr Amarpreet Dhiman, Programme Leader of Drug Discovery at F&S. ‘Even as current pharmaceutical and biotechnology R&D spending levels surpass US$36 billion, and blockbuster drug development plateaus off, CROs are expanding in the direction of becoming either niche-specific or large service providers.’
Growth in the clinical trial industry is inextricably linked to growth in the healthcare industry. In particular, escalating R&D activities have led to a higher demand for clinical trial services that meet global standards. However, even while it expands, the CRO industry faces a raft of new challenges, F&S adds. ‘Principal challenges include those related to quality, efficiency, therapeutic expertise, EU regulations, and better sponsor-CRO communication,’ Dr Dhiman pointed out. ‘Despite these considerations, companies in the CRO industry are experiencing transformed revenue growth rates, together with limitless potential for expansion.’
Soaring drug discovery development times, lengthy regulation-mandated testing and reviewing processes (with approvals often taking up to 15 years), as well as rapidly escalating R&D expenditures are causing clients to place increasing pressure on CROs to yield quick results.
In addition, because a drug’s patent protection begins at the R&D stage, manufacturers are trying to move through R&D time lines at a quicker rate, to save as much patent-protected time as possible and profit from drug sales.
Facing increasing competition in a repeat business environment, CROs must cope with the pressures to win client businesses and deliver on expectations, F&S advises. ‘Smaller firms or institutes with limited offerings often have greater difficulty competing against larger full-service CRO companies with a wide breadth of services, since many sponsors prefer working with a one-stop shop that can take a product through its entire development life cycle through to stages of drug approval.’
14.11.2006
