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The Case for CROs in Emerging Markets


By Dave Champagne

Sept. 5, 2008 | GUEST COMMENTARY | With the cost of bringing a new drug to market taking nearly 15 years and approaching $2 billion by 2010, pharmaceutical companies are desperately searching for both internal and external processes that can help them deliver a return on investment (ROI) during the patent life of the drug.

Big Pharma has been fast approaching a crossroads and now faces the prospect of no longer having blockbuster drugs as their mainstay product. Instead, pharmaceutical companies are investing in biologics to fill development pipelines, consolidating R&D efforts in similar therapies through mergers, purchasing generics companies in countries like India, while continuing to invest in their core expertise and meet ever increasing regulatory approval standards. To whittle down the list of compounds under investigation to only the most promising drug candidates, pharma has turned to contract research organizations (CROs). Outsourcing to CROs with specialized expertise can provide the necessary ROI, not only in financial terms but also in time savings.

In today’s life science market, with its strict regulatory framework and ever-increasing costs of drug development, establishing strategic partnerships between biopharma companies and CROs has emerged as a critical means to gain and sustain a competitive edge. CROs have become critical contributors to R&D, clinical trials, and manufacturing activities, capable of delivering more volume studies quicker, cheaper, and sometimes more efficiently than in-house laboratories. The leading CROs are full service providers operating globally and serving as one-stop-shops for activities, ranging from preclinical to marketing.

In a May 2007 study published by Business Insights, the total CRO market size was $14 billion in 2006 and projected to grow about 15% annually to reach $24 billion by 2010. The market is highly fragmented and the total number of CROs worldwide has grown to more than 1,100 despite continued consolidation. While North America currently accounts for 60% of the global CRO market, there is also a strong and growing CRO presence in emerging markets of the Asia-Pacific region, especially in China and India (combined market value of $7.3 billion). Of that total market, the top four CROs—Quintiles, Covance, PPD, and Charles River Laboratories—all exceed $1 billion in annual revenue (Parexel rounds out the top five). These CROs offer services in lab testing, pre-clinical, clinical, and ultimately commercialization. Their clients range from large multinational pharmaceuticals to small to medium-sized biotechnology companies.

The five largest CROs have increased their market share considerably in recent years, accounting for 45% of the total market. A major contributing factor to their success has been the implementation of market-specific, high-performance laboratory information management systems (LIMS).

Outsourcing and LIMS
CROs need LIMS to help them gather, analyze, and store analytical data on behalf of their pharmaceutical sponsors. Because CROs deliver data to their sponsors, and ultimately to the FDA, it is critical that shared reports are in the same format and in compliance with FDA standards. This expedites new drug entities through the approval process, accelerating time-to-market.

Veeda Clinical Research, an Anglo/Indian CRO with headquarters in Mumbai, tests up to 200 samples per day per instrument at its Indian facility. The company’s three laboratories around the world handle 4.5 million samples, which is likely to double. Automating the sampling system has greatly helped its use of labor resources and in turn will boost capacity.

Speed of data capture and transmission are also of extreme importance. By speeding up data collection and thus data availability, CROs can contribute to a shortened drug development process and thereby increase their customers’ productivity.

Pharmaceutical and life sciences sponsors that utilize the services of informatics-compatible CROs position themselves to further manage costs and improve their time to market, ensuring both shareholder and consumer confidence, and increasing their chance of bringing the next drug to market.

Sponsor companies and their CROs utilizing compatible LIMS take a major step toward reducing the barrier to entry for working and selling into these emerging markets because regulatory agencies will accept more easily the checks and balances for ensuring compliance that are automatically in place with synergistic electronic data and laboratory information management systems. Without this secure data capture and transmission process in place, a new drug submission can be denied by the FDA, wasting millions of dollars of research.  

Dave Champagne is the vice president and general manager for Informatics, Thermo Fisher Scientific. He can be reached at marketing.informatics@thermofisher.com.


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This article appeared in Bio-IT World Magazine.

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