8.1% CAGR, Pre Clinical CROs Market to hit USD 8.41 Billion by 2027

A rise in outsourcing activities by pharmaceutical companies has been witnessed during recent years. This trend has been seen as a plan to remain competitive and flexible in a market of exponential growth, sophisticated technologies, and an unstable economic environment. Companies generally outsource R&D tasks which include a broad range of activities such as, fundamental research to late-stage development: hit exploration and lead optimization, target validation, genetic engineering, assay development, safety and efficacy tests in animal models, and clinical trials which involve humans.

The Pre-Clinical CROs in healthcare market was valued at US$ 4,282.4 million in 2018 and it is projected to reach US$ 8,412.9 million by 2027; it is expected to grow at a CAGR of 8.1% from 2019 to 2027.

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Company Profiles

- Covance, Inc.
- Charles River.
- Eurofins Scientific
- PRA Health Sciences
- WuXi AppTec
- Medpace, Inc.
- Pharmaceutical Product Development, LLC.
- Parexel International Corporation
- ICON Plc
- MD Biosciences

Growing Applications of Pre-Clinical CROs in Healthcare to Drive Pre-Clinical CROs in Healthcare Market Growth

Research & development (R&D) is a significant and essential part of a company's business. Pharmaceutical and biotech companies majorly focus on research and development (R&D) to come up with new molecules for various therapeutic applications with the most significant medical and commercial potential. The companies invest majorly on the R&Ds intending to deliver high quality and innovative products to the market.

R&D investments made by biopharmaceutical companies have increased over the years. According to a report of Pharmaceutical Research and Manufacturers of America (PhRMA), the R&D expenditure of the biopharmaceutical companies has increased from US$49.6 billion in 2012 to US$ 58.8 billion in 2015 Research and development expenditures are usually incurred during processes of discovering, testing, and developing new products, upfront payments, and milestones, improving existing outcomes, as well as demonstrating product efficacy and regulatory compliance before launch. As per the International Federation of Pharmaceutical Manufacturers & Associations, the R&D expenditures in 2014 in the pharmaceuticals and biotechnology industry grew by approximately 8.7% compared to the expenses in 2013. Moreover, in the US, investments for R&D by pharmaceutical companies had grown consistently over the last 15 years. The intensity for R&D by the companies in Japan accounted for about 13.3%, in the US it accounted for approximately 17%, and in the European Union it was registered to be around 13% in the year 2014.

Drug development and discovery is a time-consuming and expensive process. The process from early detection or design to development to regulatory approval can take more than 10 to 15 years. Throughout the development phase of a drug substance, various testing services are required to check the quality and efficacy of the product. Hence, the pharmaceutical and biotech companies prefer to outsource the services to the contract research organizations (CROs) to save the cost and time, which is expected to drive the growth of the market.

The major factors driving the growth of outsourcing activities by companies are, cutting costs, need for innovations, increased speed and agility, and accessing specialized knowledge and technologies. A decreasing percentage of profits has become a primary concern for pharmaceutical companies over the past decade. As per an analysis by PhRMA, around $0.8 to $1.7 billion is estimated to be invested by the pharmaceutical industry in R&D to bring a new drug to market. Hence, with an increase in the R&D expenditure, the need for pre-clinical services is expected to drive the growth of global pre-clinical CROs market.

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