Global CRO market scenario
The Global CRO market is dominated mainly by 9 -10 large players which have a spread across 2-3 major continents. As per available data on company websites and analyst estimates, the size of the market is $34 billion in terms of revenue. All Global CRO’s have greater than 15 service portfolios and have their headquarters in the USA. The market has entered a consolidation phase in the year 2018 – 2019 and clocked a growth rate in the range of 8 -12 %. Spends and market size estimates for the CRO industry worldwide and India are highlighted in the table below:
| Spend and market size estimates | US$ B 2017 |
US$ B 2018 |
US$ B 2019 |
Growth Forecast |
|---|---|---|---|---|
| Global R&D Spend | 165 | 172 | 177 | 3.1% CAGR (2017-2024) |
| USA R&D Spend | 55 | 62 | 65 | 6-7% CAGR (2017-2024) |
| Global CRO Spend | – | 34 | 7738.5 | 56 US$ B with 7.6% CAGR (2017-23) |
| USA CRo Spends | – | 12 | 9.6% CAGR (2019-27) | |
| Indian Pharma R&D Spends | .0965 | 177 | Indian Pharma R&D investment increased from 5.3% in FY12 to 8.5% in FY18 | |
| Indian CRO market | 1.6 | 3.15 | US$ 3.15B by 2025 & projected to register a CAGR of 8.7% | |
*HY CRO earnings of Top 6 Global CRO’s
*R&D spends of Top 5 Indian Pharma (March 2019)
Indian CRO market: Challenges Ahead
The market size of the Indian CRO industry is in the range of $1.6 billion – $2 billion as per current estimates. USD $3.15 billion by 2025 & projected to register a CAGR of 8.7%. The industry is faced with ongoing challenges. Key questions for the Industry:
- Has the Indian CRO industry matured, consolidated or re aligned to market needs
- Is there is a key influencer which needs to be tapped by the industry?
- New technologies and competitor move
- “Happenings to pharma” or Pharma industry financial performance and export growth in key overseas markets of North America and Europe.
- Dynamics of the regulatory environments
- Pharmaceutical industry Investments in new and targeted therapies and
- Concept of “volunteer safety” in clinical research
The advent and span of the above factors is challenging to assess, and industry experts are faced with these questions at every point in their daily activities of the clinical research business.
Being primarily focused towards generic business, the CRO industry in India looks to fill revenue gaps with routine bioequivalence studies from the available pipeline of the pharmaceutical client base. The Pharmaceutical client base remains “dynamic” for all CRO’s as pharmaceutical companies shift their outsourcing strategies based on their budgets, risk evaluations and their relationship with the regulators in and outside the country. Traditionally, Indian CRO’s businesses are driven by the growth strategies of the pharmaceutical industry. However, with changes in today’s competitive business environment, these trends are expected to change in the coming decade.
Disclaimer: Views expressed are completely of the author based on the literature and data sources in the public domain
Watch out for the next edition of Intelligence 2020 series on Clinical trials market India – A Snapshot