Pharmaceutical outsourcing has emerged as a robust—and rapidly growing—subsector of the life sciences industry. As the push for efficiency continues, more pharmaceutical, biotech and medtech companies are turning to contract research organizations (CROs), contract development organizations, medical affairs outsourcing and other service providers for help bringing products to market, manufacturing and distributing products, and improving quality. This trend is creating exciting new opportunities for investors in this burgeoning space.
Several factors are driving this growth in pharmaceutical services outsourcing:
- Pharma companies are becoming more comfortable with outsourcing. Of outsourced service providers, CROs have the highest penetration, with approximately 50 percent of clinical trials outsourced. Other areas of outsourcing are far less penetrated, however, offering ample opportunity for investment. Consider researching opportunities in health economics or outcomes research market access, for example.
- The current health care/pharma environment is rich for pharma outsourcing. Biotech is thriving: capital is readily available, and the US Food and Drug Administration regulatory environment for approval of new products is favorable. On the pharmaceutical front, ongoing consolidation has fostered an efficiency mindset. And across the health care and life sciences space, big data is being harnessed in new ways that make outsourcing easier and more efficient than ever.
- We are in a period of great market fragmentation. The market is starting to skew toward earlier stage rather than big pharma companies. Trials also are increasingly designed with an emphasis on subpopulations and advanced analytics (such as specialty drugs targeted to specific genotypes). Traditional pharma often lacks [...]