Functional Service Providers Market is predicted to reach USD 27.76 billion at a CAGR of 8.68% during the forecast period 2023-2032

Market Research Future (MRFR) has published on the “Global Functional Service Providers Market”.

The functional service providers market is projected to register a CAGR of 8.68% during the forecast period of 2023 to 2032.

MRFR recognizes the following companies as the key players in the global functional service providers market— IQVIA Inc. (US), Laboratory Corporation of America Holdings (US), Parexel International Corporation (US), Icon Plc (Ireland), PPD Inc. (US), Quanticate International Limited (UK), BioPoint Inc. (US), RHO, Inc. (US), Wuxi AppTec Co., Ltd. (China), and KPS Life, LLC (US).

Functional Service Providers Marke Highlights

The global functional service providers market is accounted to register a CAGR of 8.68% during the forecast period and is estimated to reach USD 27.76 billion by 2032.

The growth of the global functional service provider market is attributed to factors including a rising number of clinical trials, lowered operational costs, and improved service quality. Furthermore, the rise in FSP outsourcing in drug development is propelling the growth of the market. Drug development is the process of bringing a new pharmaceutical drug to market with the approval of appropriate regulatory authorities. It is an expensive process and a long and high-risk business, which could take nearly 10–15 years and is associated with a high attrition rate. Pharmaceutical companies are under intense pressure from their shareholders to improve efficiency and productivity while also managing costs. FSPs enable companies to engage discrete expert services, including medical writing, biostatistics, or clinical monitoring, when and where they need them. These providers help companies’ lower development costs by reducing redundant activities. FSPs offer companies access to the expertise and skills a company may not have in-house. They help accelerate drug development timelines and reduce overall costs to increase returns on investments. Hence, the rise in FSP outsourcing in drug development is expected to drive the growth of the global functional service providers market during the forecast period. Moreover, biopharma and biotech’s digital transformation is creating flourishing opportunities for the market during the forecast period. However, the dearth of skilled professionals is anticipated to hamper market growth because FSPs require a skilled labor force to offer various functional services to their customers.

Browse In-depth Market Details [Table of Content, List of Figures, List of Tables] of functional service providers market  Report

Segment Analysis

The global functional service providers market has been segmented based on type, stage, and application.

On the basis of type, the global functional service provider market has been segmented into clinical monitoring, medical writing, data management, pharmacovigilance, biostatistics, programming, study design, and others. The clinical monitoring segment held the largest market in 2022, and biostatistics was the fastest-growing segment during the forecast period. The growth of type segment is driven by factors such as increasing demand for FSPs’ services owing to the rising number of clinical trials in order to develop innovative products. Moreover, key players are actively working to meet the demand of customers, such as Parexel International Corporation (US), which offers medical writing solutions in more than 25 countries with knowledge of local regulations and the ability to develop multi-lingual communications as needed.

Based on stage, the functional service provider market is segmented into clinical development and post-approval. The clinical development segment accounted for the largest share in 2022 and was the fastest-growing segment during the forecast period. The key factor that drives the growth of this segment is that biotechnology and biopharmaceutical companies sponsor outsourcing clinical development processes to functional service providers to gain flexibility, speed the drug development process, availability of expertise teams, technology, and clinical study protocols.

The functional service providers market, based on application, is segmented into biopharma companies, biotech companies, medical device companies, and research centers and academic institutes. The biopharma companies segment accounted for the largest market with a market share of 43.18% in 2022. One of the major factors contributing to the growth of biopharma companies segment is the rising number of new drug approvals and the increasing emphasis on personalized medicine. For instance, in 2020, the US Food and Drug Administration (USFDA) Center for Drug Evaluation and Research approved around 53 novel drugs as new molecular entities under the New Drug Applications (NDAs).

Regional Analysis

The global functional service providers market, based on region, has been divided into North America, Europe, Asia-Pacific, and Middle East & Africa. The North America further includes US and Canada. The Europe includes countries namely Germany, France, UK, Italy, Spain, and Rest of Europe. The functional service providers market in Asia-Pacific has been segmented into China, India, Japan, South Korea, Australia, and Rest of Asia-Pacific. Moreover, the Rest of the World comprises of Middle East, Africa, and Latin America.

North America dominated market in 2022 due to factors such as the high investment in R&D in the healthcare sector results in innovative new products and a large number of clinical trials in the region. For instance, the National Institutes of Health (NIH) funds research for treatments and breakthroughs in healthcare, receiving USD 43,000 million as funding in 2021. Moreover, the current US administration has declared that NIH funding would increase by USD 9,000 million in 2022. This increase in R&D funding will lead to more product innovations and clinical trials, further increasing the demand for FSP services in the region.

The Europe functional service providers market is growing at a significant pace due to stringency of regulatory bodies such as the European Medicines Agency (EMA), because there is a high demand for FSP services to provide expertise for higher chances of product approval. According to the EMA, around 4,000 clinical trials take place every year across the European Union (EU) countries. Moreover, the players operating in the European region are expanding their capabilities through strategic acquisitions and service launches. For instance, in November 2020, Envision Pharma Group (UK) acquired Two Labs (US) to improve its service portfolio. Further, in September 2020, Parexel International Corporation (US) launched a new Regulatory Submissions Hub Service for EU clinical trial regulations for life sciences and biopharmaceutical customers. Such factors are expected to drive the growth of the regional market.

Asia-Pacific region is fastest growing region in market in 2022 owing to factors such as high R&D expenditure in the region is also driving product innovations, resulting in a greater number of clinical trials. The R&D expenditure of China is growing at a significant rate and is expected to surpass the US R&D spending by 2025 to become the global leader. China is currently the second-highest spender in R&D, after the US. Moreover, countries in the APAC region have well-established pharmaceutical markets compared globally. For instance, according to IQVIA (US), in 2020, China and Japan held the second and third spots, respectively, in the top 10 pharmaceutical markets rankings. This, in turn, provides growth opportunities for the APAC functional service providers (FSP) market.

The rest of the world functional service providers market is segmented into major regions, namely the Middle East, Africa, and Latin America. The rest of the world region is witnessing restricted growth due to inadequate healthcare infrastructure and the presence of poor economies. However, countries in the Middle East are the key contributors to the growth of the overall regional market. For instance, Israel, a Middle Eastern country, was the highest spending country for R&D globally (by the percentage of GDP) in 2019, with an R&D expenditure of 4.93% of its GDP.

Key Findings of the Study

• The global functional service providers market is expected to reach USD 27.76 billion by 2032 at a CAGR of 8.68% during the forecast period.


• The Europe region held the second largest market share of the global market, owing to a growing adoption of technological advancements in FSPs and formation of strategic alliances.


• Based on type, the clinical monitoring held the largest market in 2022, with a market share of 47%.


• IQVIA Inc. (US), Laboratory Corporation of America Holdings (US), Parexel International Corporation (US), Icon Plc (Ireland), PPD Inc. (US), Quanticate International Limited (UK), BioPoint Inc. (US), RHO, Inc. (US), Wuxi AppTec Co., Ltd. (China), KPS Life, LLC (US), and others are the key players in the market.