Global Clinical Trials Outsourcing Market - Focused Insights 2024-2029

The global clinical trials outsourcing market was valued at USD 46.15 billion in 2023 and is expected to reach USD 70.00 billion by 2029, growing at a CAGR of 7.19% during the forecast period. The market growth is majorly driven by the growing complexity of clinical trial regulations, challenges in patient enrolment, and lack of expertise and resources. The rising cost of clinical trials, along with the competition among biopharma, medical device companies, and other organizations conducting clinical trials to bring products to market faster.

Globally, more than 50% to 60% of clinical trial activities are outsourced to Contract Research Organizations (CROs). Factors such as the high expenditure on R&D, government initiatives, and the surge in competition in the pharmaceutical industry have enabled the adoption of clinical trials outsourcing services as they reduce the cost and time and support to launch new products in the market with higher success rates.

Clinical trial outsourcing is a service where complete clinical trial activities or specific functions of a trial are contracted to a contract research organization (CRO) instead of the company keeping the processes in-house. This can help clinical trials sponsors save cost and time, focus on their core competencies, and streamline workflow. Outsourcing of clinical trials is intended to enhance the efficiency of research and associated activities and increase the success rate of trial outcomes. Recently, the outsourcing of clinical trials for biopharma drugs & therapies and medical devices is gaining high momentum due to the increasing complexities in clinical trials. Also, the cost of clinical trials has increased compared to past years, due to the integration of advanced and new technologies and tools rising in clinical trials. These factors created significant moments for industrial growth.

RECENT VENDORS ACTIVITIES

1. In 2021, ICON completed the acquisition of PRA Health Sciences, which will leverage its enhanced operations to transform clinical studies and accelerate the biopharma customers.
2. Laboratory Corporation of America Holdings has made 26 acquisitions and 26 investments with spending over $3.3 billion for those acquisitions till 2022. In which the company made significant investments in multiple sectors such as genomics, life sciences, oncology, and more.
3. In 2021, Thermo Fisher Scientific acquired a Pharmaceutical Product Development company which is one of the leading market players in the clinical trials outsourcing market. This made the company a significant player in the clinical trials outsourcing segment.
4. In 2021, Thermo Fisher Scientific will expand its direct-to-patient services which are designed to support trials and minimize the length of trials and cost which help to boost enrolment and participant rates. 

KEY TAKEAWAYS

1. Market Growth: The global clinical trials outsourcing market was valued at USD 46.15 billion in 2023 and is expected to reach USD 70.00 billion by 2029, growing at a CAGR of 7.19% during the forecast period.
2. By Outsourcing Type: The functional service provider segment holds the largest market share of 49%. The growth is due to the FSP model providing a cost-cutting approach in clinical trials outsourcing.
3. By Phase: The Phase III segment shows the highest growth of 7.70% as they require maximum patient participation, accurate data analysis, better clinical outcomes, and higher cost investment compared to other phases.
4. By Indications: The oncology segment accounted for the largest market share. The high volume of clinical trials registered for oncology has driven the widespread adoption of clinical trial outsourcing.
5. By End-Users: The bio & pharmaceutical companies segment dominates and has the largest market share and shows the highest growth as they are continuously engaged in R&D to stay competitive in the market.
6. By Geography: North America held the largest global clinical trials outsourcing market share as the region conducts the highest number of clinical trials annually.
7. Growth Factor: The global clinical trials outsourcing market is set to grow due to the continued rise in clinical trial volume and associated complexities and growing research for large molecule & personalized medicines.

MARKET DRIVERS & OPPORTUNITIES

Attention Towards Expansion of Functional Service Provider Model

The clinical trial outsourcing approach is growing rapidly across the world, as the advancement takes place continuously. Of these, the Functional Service Provider (FSP) approach has gained popularity and traction as companies look for more flexibility and control over their outsourced clinical trials. The FSP model offers individually tailored and customized programs to meet the unique challenges. Some major factors that influence the utilization of the FSP model are cost, efficiency, and more flexible resourcing. The FSP model is affordable to adopt and is around 40% less expensive compared to the full-service model. It is one of the leading reasons for the increased utilization of FSP in recent years. It will be the next bigger opportunity for market expansion as well as significant opportunities for vendors to deliver their outsourced services in every corner of the world.

Rising Specialized Contract Research Organizations

The global clinical trials outsourcing market has witnessed several developments and evolutions in recent years. One of them is the growth of specialized CROs that cater to niche areas of clinical research with new approaches and models evolving the clinical trials outsourcing market. The growing burden of rare and infectious diseases can be managed with these specialized CROs. Specialized CROs also offer a customized experience for trial sponsors that gives more attention to CROs and sponsor partnerships as well as more focus on clinical trial activities.

Cost Cuttings and Trial Efficiency with Clinical Trial Outsourcing​

With the growing innovations, bio-pharma sponsors are keen on cutting down the cost of drug development in trials, specifically for those trial activities that accounted for the highest cost of clinical trials. From site selection to trial design to patient recruitment, complete trial design determines the potential success or failure of the drug under development. In addition, post-trial activities including health economics, pharmacovigilance, and several other factors pose a significant cost burden. Clinical trials outsourcing can lead to significant cost savings for sponsors. A cost-effective, integrated, and predictable approach to aims is an important characteristic of the clinical trials outsourcing model. Some studies (2024) reported that outsourcing reduces clinical trial costs by more than 20%, decreases the rejection rate for regulatory approval, decreases Institutional Review Board (IRB) approval cycle times, and reduces data management cost savings per page with a concurrent 20% improvement in productivity.

INDUSTRY RESTRAINTS

Long Timelines and Lack of Transparency & Specificity

In clinical trial outsourcing, a common pain point is that CROs often deliver only basic information about clinical trial processes to meet requirements. Although sponsors look for minor details to manage risk-related clinical trials, contract research organizations do not show sponsors what they have done for clinical trial work by delivering critical analysis. There is a lack of transparency among the CROs when they share the data with the sponsors. This is limiting many large companies to select only some of the large CROs for their work. They must be very particular regarding the selection of clinical trial partners in the market. Sponsors mainly look for contract research organizations to provide enough details regarding the feasibility projection that turns out to be unrealistic it shows the lack of specificity between the sponsors and CROs. This factor highly impacts the market growth and is responsible for hampering the market growth contribution by CROs. On the other side, the lack of transparency between contract research organizations and sponsors negatively impacts outsourcing services for clinical trials. Sometimes contract research organizations don’t meet the expectations of the sponsors with communications that time sponsors get concerned about the clinical trial activities.

SEGMENTATION INSIGHTS

INSIGHTS BY OUTSOURCING TYPE

The global clinical trials outsourcing market by outsourcing type is segmented into functional service providers, full-service outsourcing, and hybrid. The functional service provider segment holds the largest market share of 49%. The functional service providers (FSP) model provides a cost-cutting approach in clinical trials outsourcing, enabling sponsors to outsource particular/only required functional components of clinical trials to trial partners while maintaining control over the overall procedure and data about trials. Currently, this model become more popular increasingly offering features customized to meet sponsor's requirements to adapt to sudden changes in outsourcing patterns. The FSP model increases efficiency in single-function outsourcing that scales for dedicated teams and it leads to improved quality and consistency in clinical trials.

INSIGHTS BY PHASE

The global clinical trials outsourcing market by phase is categorized into phase III, phase II, phase IV, and phase I. The phase III segment shows significant growth, with the fastest-growing CAGR of 7.70% during the forecast period. The Phase III clinical trial demands significant investment and attention due to its complexity and stringent regulatory requirements. In phase III around 300, to 3,000 volunteers are required to participate in the study. The duration of phase III clinical trials is around 1–4 years, which is relatively higher than all the other phases. The long duration and requirements for a large patient population make this phase more expensive. In phase III around 300, to 3,000 volunteers are required to participate in the study. The duration of phase III clinical trials is around 1–4 years, which is relatively higher than all the other phases. The long duration and requirements for a large patient population make this phase more expensive. Also, phase III involves checking the efficacy of drugs and monitoring adverse reactions. Thus, the adverse reactions associated with most drugs limit their chances of moving to the next phase to 25%–30%. This factor led to increased demand for outsourcing clinical trials in phase III clinical trials, which is helping segmental growth.

INSIGHTS BY INDICATION

Based on the indication, the oncology segment dominates and holds the largest global clinical trials outsourcing market share. Clinical trials in oncology therapeutic areas are more complex than other therapeutic areas due to advanced precision medicine treatments. This therapeutic area has historically had the most challenging trials, including in some major indications such as breast, lung cancer, colorectal, and prostate cancer. Since 2014, the average complexity of clinical trials is steadily increasing due to changing regulations and increasing costs. Due to the rising prevalence of cancer conditions, there is a huge demand for clinical trials in the market. Due to the changing paradigm of cancer testing in the world, there is a constant increase in the number of patients affected by the disease. This is pressuring companies to invest in clinical trials for better results.

INSIGHTS BY END-USER

Based on the end-user, the bio & pharmaceutical companies segment dominates and has the largest market share, and shows the highest growth in the global clinical trials outsourcing market. Bio & pharma companies are continuously engaged in R&D to stay competitive in the market, which led to an increase in clinical trials by biopharma companies. However, due to the burden of internal activities, to maintain brand image and high investment, these end-users commonly outsourced clinical trials and contributed to the highest market growth. Major biopharma companies are increasingly outsourcing their clinical trials to CROs to ensure the safety, efficacy, and success of their studies. In a competitive market, maintaining brand reputation and managing budget constraints are key factors driving this demand for outsourcing.

GEOGRAPHICAL ANALYSIS

North America dominates and has the largest share of the global clinical trials outsourcing market. The market dominance of the regions is attributed to the highest number of clinical trials running in the region by CROs. In North America, especially in the US, several CROs are present who engage in the highest number of clinical trials and perform clinical trials sponsored by biopharma and medical device industries. The US and Canada are the top two countries conducting a large number of clinical trials. Especially the US, which has seen a significant push towards more advanced clinical trials, driven by supportive FDA guidelines and a growing acceptance of diversity and digitalization in clinical trials. The increasing digitalization in clinical trials is positively favored.

COMPETITIVE LANDSCAPE

The global clinical trials outsourcing market report consists of exclusive data on 30 vendors. Charles River Laboratories, IQVIA, ICON plc, Laboratory Corporation of America Holdings, Syneos Health, Thermo Fischer Scientific, WuXi AppTec, and Paraxel International (MA) Corporation are some of the leading companies accounting for a major share of the global clinical trials outsourcing market. These vendors offer innovative clinical trial outsourcing solutions and services models that attract clinical trial sponsors to outsource the trials, and maintain their brand image in the global market. Also, mergers and acquisitions, collaborations, and partnerships are some of the leading market strategies that strengthen their position in the market.