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What are CROs and How are They Transforming the Pharma Industry?

Published On: October 2022

Contract research organizations (CROs) Article Bref:


Contract research organizations (CROs) generally help provide research-based services to industries including pharmaceutical, biotech, government agencies, and the medical sector. Services for data administration, clinical operation, regulation, quality assurance, and submission are needed in these sectors.


A CRO covers benefits to medical devices, biotechnology, and pharmaceutical companies. It allows open and frequent communication on project details and urgencies, letting the teams resolve issues from various corporate cultures and operational centers. They aim to reduce costs for companies introducing new medicines and drugs in niche markets.


The CRO market is made up of sales of the services and associated products provided by entities (organizations, sole proprietors, and partnerships) that outsource research services like clinical trial data management, database design and construction, data entry and validation, medicine and disease coding, project management, quality, and metric reporting, safety and efficacy summaries, and statistical analysis.


The two core challenges CROs face; are low-profit margins and limited market capitalization.


Pharmaceutical Research and Manufacturers of America (PhRMA) reports that its members spent nearly USD 83 billion on R&D projects in 2019. Additionally, according to PhRMA, 2020, more than 260 vaccines are being developed by biopharmaceutical companies for various diseases, including COVID-19. According to a UK Parliament article from 2021, the entire amount spent on research and development was EUR 37.1 billion, i.e., around EUR 558 per person, 1.7% of the UK's GDP in 2018.


Currently, the biopharmaceutical industry is growing, with more than 50 new medications are now being approved for sale. It, in turn, would steer widespread application and expansion opportunities for the market for CROs. Different end customers are drawn to the CRO market because of the product variety.


In February 2021, Charles River Laboratories' inked a binding agreement to purchase Cognate BioServices Inc. to increase its scientific capabilities. The latter is a contract development and manufacturing company specializing in cell and gene therapy.


The CRO industry is innovating and undergoing a significant transformation, with increasing investments in R&D furthering its growth. Labor shortages and supply chain disruptions make the environment more difficult, but analysts claim that CROs have the wherewithal to address these issues. However, developing decentralized clinical trials and cutting-edge technology provide CROs with new resources to meet demand.


Companies will soon use more technologically advanced solutions because of lessons learned from COVID. Analysts predict that CROs will ramp up hybrid trials by the end of this decade, merge clinical and commercial divisions, and invest in AI-powered biosimulation.  However, there will be a need to specialize or specialize down and ensure services are reasonably priced.

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