Europe CRO Services Market Size, Share & COVID-19 Impact Analysis, By Service Type (Discovery, Pre-Clinical, Clinical, and Laboratory Services), By Application (Oncology, CNS Disorder, Cardiology, Infectious Disease, Metabolic Disorders, Others), By End User (Pharmaceutical & Biotechnological Companies, Medical Device Companies, Academic & Research Institutes, Others) and Regional Forecast, 2022-2029

The Europe CRO services market size was valued at USD 16.97 billion in 2021. The market is projected to grow from USD 19.68 billion in 2022 to USD 35.91 billion by 2029, exhibiting a CAGR of 9.0% during the forecast period. The impact of COVID-19 has been unprecedented and staggering, with experiencing a higher-than-anticipated demand across Europe compared to pre-pandemic levels. Based on our analysis, the market had exhibited a rise of 27.4% in 2020 compared to 2021.

Contract Research Organizations (CRO) are the companies that offer research-based services on a contract to many pharmaceuticals & biotechnology, medical device industries, and various government research organizations. These services include drug & devices research and development activities, i.e., early phase laboratory services, CMS, preclinical research, clinical trials, post-marketing surveillance, and laboratory services.

Rapid technological advancements and growing urbanization in European countries are encouraging many biotech and pharmaceutical companies to outsource their research development to many contract research organizations. Along with this, growing investments by many key players in various clinical & non-clinical research activities outsourced by many CRO service providers helping in cost-effective options for product development is expected to boost the Europe CRO services market growth during the forecast period. However, increasing competition in the market and shortage of skilled professionals are the major factors expected to negatively impact the Europe CRO services market growth.

COVID-19 IMPACT

Changing Dynamics of COVID-19 Pandemic led to Dual Impact on Market Growth

The unprecedented pandemic at the initial stages slowed the growth of the market due to the lack of availability resources resulting in decrease in the number of drug development processes. However, in 2021, the market observed a significant growth. Increase in the number of clinical trials, and increase in demand for novel and effective drug due to the increasing prevalence of chronic diseases were the key factors responsible for the growth of the market.

Due to the COVID-19 outbreak, market players in the pharmaceutical industries increased their focus on research and development and enhanced their manufacturing processes to expand their product offerings for COVID-19 diagnostics and vaccines in the region. In order to accelerate the R&D process, many pharmaceutical companies outsourced their drug development to CROs through partnerships and collaboration.

• For instance, in January 2021, ICON plc announced its partnership with Pfizer, Inc., and BioNTech to develop Pfizer and BioNTech's experimental COVID-19 vaccine program, providing clinical trial services.

Furthermore, in 2020 European Medicines Agency (EMA), recommended authorization 97 new medicines and 39 new active medicines. This growth in the number of approved products in Europe is due to the rising investments by biopharmaceutical companies in development of biologics and biosimilar.

The major players operating in the market reported significant increase in revenues during the financial year due to the boost in the number of clinical trials being conducted. The overall impact of COVID-19 on the CRO Services, led to the increase in revenues of an estimated 3.4% in 2020, based on analysis of various parameters and interviews with KOLs.

LATEST TRENDS

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Growing Investment in R&D by Pharmaceutical, Biopharmaceutical, and Medical Device Companies to Lead to Market Growth

Major pharmaceutical and biotechnology companies have been increasing the investment in resources for new drug development and medical devices. Pharmaceutical companies are heavily investing in research and development initiatives. Major pharmaceutical firms are engaging in R&D to bring high-quality, innovative goods to market.

Increasing investments by major pharmaceutical and biotechnology companies in various clinical and non-clinical research activities led to outsourcing to CROs, helping in cost-effective drug development options. This would fuel the CRO services market. The trend relies on the fact that the pharmaceutical and biotechnology companies are focusing on enhancing their R&D efficiencies by investing heavily in R&D.

For instance, as per the survey published by EvaluatePharma, in Europe the R&D spending by pharmaceutical industries reached USD 186 billion in 2019 from USD 136 billion in 2012.This is also expected to lead to growth in key regions such as Europe.

Furthermore, the CRO services are emphasizing more on strengthening and expansion of their CRO services portfolio. For instance, in 2019, Envigo, the non-clinical CRO business was acquired by Laboratory Corporation of America Holdings to strengthen the company's non-clinical drug development business segment's Europe research capabilities.

These new trends are expected to increase the development of new medications and technologies and significantly contribute to the market surge in the forecast period.

DRIVING FACTORS

Rising Prevalence of Chronic Diseases to Propel Market Growth

The prevalence of chronic diseases such as cancer, Alzheimer’s, heart diseases, and other such diseases has been increasing at a fast pace in Europe. For instance, as per the Globocan 2020 data, Europe accounts for 22.8% of the total cancer cases and 19.6% of the cancer deaths, although it represents 9.7% of the European population. Furthermore, in Germany, the number of prevalent cancer cases was 2,188,176 in the past 5 years. In the year 2020, the number of new cancer cases was 628,519, out of which 69,697 were reported as breast cancer, and 67,959 were reported as prostate cancer. Moreover, as per European Brain Council, in 2021, around 10.5 million people had dementia in Europe, and this number is expected to reach 18.7 million by 2050.

This increased prevalence of chronic diseases has increased the demand for the development of new treatments and has resulted in increased outsourcing of drug development by pharmaceutical, biotechnological, and medical devices companies to CRO service providers.

Chronic diseases such as cardiovascular diseases and cancers are one of the major reasons for deaths in the European countries, increasing the demand for new effective treatment, which eventually is driving the market in Europe. For instance, according to the Office For National Statistics 2020 data, ischemic heart diseases was the third lead cause of death in England with around 51,979 deaths in 2020. Such strong trends of deaths due to diseases is expected to drive the demand for novel therapeutics which require CRO services. Increasing demand for launch of effective drugs are further anticipated to boost the market.

Strong Foundation for Biotechnology in Europe to Determine Market Growth

Europe has a number of established research institutions, medical centers, and hospitals that provide a solid basis for sourcing and developing scientific and clinical innovations. For instance, as per an article by Germany Trade and Invest, in 2019, around 500 pharmaceutical companies were located in Germany, which included domestic corporations as well as subsidiaries of international companies. Presence of such established players is expected to drive the market growth in the region.

Moreover, one of the key strength of the biotechnology sector in Europe, is the increase in the amount of research and development initiatives by biotechnological companies. For instance, according to BioSpace, in 2018, there were 386 drug candidates in clinical development by the companies that participated, whereas, in 2008, this number was only 178. For these companies, R&D investments, on average, were around an estimated USD 10.2 million.

Currently, many biotech companies are based in France, Germany, and the U.K. For instance, according to an article by Leem, France ranked fourth in the EU for pharmaceutical products in the year 2019. Hence, the pharmaceutical sector is growing at a fast pace in European countries.

Furthermore, according to the Germany Trade and Invest 2019 article, Germany ranked the world’s fourth-largest pharmaceutical market after the U.S., China, and Japan. Revenue in the overall pharmaceutical of Germany increased by 5.7% and reached the market value of USD 53.0 billion in 2019. This, in turn, drives the contract research market (CRO) service market in Europe.

RESTRAINING FACTORS

Lack of Skilled Professionals to Limit Market Growth Prospects

Rising urbanization has accelerated the rate of invention and technology development in Europe. In terms of occupation, new opportunities are continuously being added. In addition, the growing industrialization and demand for new services has boosted the demand for new skill development. This trend has also increased the competency in the job opportunity.

As the CRO service providers compete for skilled and experienced scientists with pharmaceutical, biotechnology, medical device companies, and academic and research organizations, they also face challenges in attracting and retaining highly competent specialists. Companies, particularly small-scale analytical testing providers, must provide better compensation and other incentives to compete effectively, affecting players' finances and operational performance. The scarcity of qualified specialists could hinder the adoption of new technologies and procedures, limiting the CRO services market's growth in the coming years.

Despite the growing demand for innovative product development in the pharmaceutical and biotechnology industries, experienced personnel is in short supply. For instance, as per the research carried out by Gatsby Foundation, by 2030, the U.K. will require around 700,000 lab technicians to support the U.K’s economy.

Many countries in Europe have not successfully delivered skill development. According to the Federal Ministry for Economic Affairs and Climate Action 2019 survey, more than 50.0% of the companies believe that shortage of skilled professionals is the greatest threat to their business development. Many companies are severely affected by the scarcity of skilled workers. Companies say that the skills shortage poses a growing threat to their development.

Furthermore, the COVID-19 outbreak had significantly decreased the quality of new skills development due to the lack of resources during the period, causing an increase in the crisis of skilled laborers. These factors are expected to restrict the market growth during the forecast period.

SEGMENTATION

By Service Type Analysis

Clinical Segment Emerges as the Dominant Segment during 2022-29

Based on service type, the Europe market is segmented into discovery, pre-clinical, clinical, and laboratory services.

The clinical segment held the largest share in 2021 in the CRO services and is projected to expand at a considerably high CAGR during the forecast period due to the increased number of clinical trials being conducted in Europe. For instance, based on the Sofpromed article, Europe, along with U.S. and Asia, are the important region in the world where clinical trials are carried out as there were 65,572 registered clinical trials in Europe in 2019.

The pre-clinical segment held the second dominant share. This is mainly due to a surge in the number of pharmaceutical companies partnering with CROs, having needed infrastructure and expertise for managing costs and deadlines. Outsourcing helps the pharmaceutical companies in managing the finance of the company by converting fixed costs and variable costs.

By Application Analysis

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Increased Prevalence of Cancer to Lead to Oncology Segment’s Dominance

Based on application, the Europe market is segmented into oncology, CNS disorder, cardiology, infectious diseases, metabolic disorder, and others.

The oncology segment held a dominant market share in the year 2021 owing to the high prevalence of different types of cancer diseases. The segment held a 26.9% market share in 2021 and is projected to expand at a considerably high CAGR during the forecast period.

Based on the published article in February 2021 in ACS Journals, cancer is considered the leading cause of death and a key barrier to life expectancy in every country of the world. Also, based on WHO in 2019, cancer was the second leading cause of death for people having age less than 70 years in 112 countries out of 183 countries. Europe holds 22.8% of the total cancer cases and around 19.6% of the cancer deaths, representing 9.7% of the Europe population. These factors are eventually propelling the CRO service market in Europe.

The cardiovascular segment registered a substantial share in 2021 and is expected to exhibit a swift growth rate during the studied period. Every year there are around 3.9 million deaths in Europe due to cardiovascular disease (CVD) and more than 1.8 million deaths in the European Union (EU). The increasing prevalence of cardiovascular disease is driving the CRO services for cardiology related therapeutic areas in Europe.

By End User Analysis

Pharmaceutical and biotech Segment to Grow at Faster Pace during 2022-29 Due to the Increasing Outsourcing by Pharmaceutical and Biotech Industries

The Europe market by end user can be segmented into pharmaceutical and biotech companies, medical devices companies, academic and research institutes, and others.

The pharmaceutical and biotech segment held the dominant share of the Europe market in 2021 because pharmaceutical and biotech companies are generally outsourcing the therapeutic and other product development functions to independent services providers for optimizing the use of more flexible cost structure and also for the avoidance of maintaining redundant development capabilities all across the world. Moreover, an increased prevalence of autism spectrum disorders in patients belonging to the adult age group is expected to favor segmental growth.

The medical device companies segment is anticipated to expand at a comparatively higher CAGR during the forecast period due to the change in the older government regulation in Europe, which led to more outsourcing to the CROs and CMOs. For instance, based on the official journal of the European Union, from May 2022, the new EU Medical Devices Regulation (MDR) will be applied. These new regulations aim to strengthen patient safety and ensure the benefit of patients using new devices.

REGIONAL INSIGHTS

Based on the sub-region, the market can be segmented into Germany, the U.K., France, Italy, Spain, Scandinavia, and rest of the Europe. The U.K. market size stood at USD 3.85 billion in 2021. This is attributed to the presence of a large number of CROs, together with a number of clinical trials that happened in the country and improvement in the European healthcare systems. There are various benefits of conducting clinical trials in the U.K., as in comparison to other developed countries’ healthcare systems, the U.K’s National Health Service (NHS) is rated as one of the best. Secondary clinical research networks offer good infrastructure for supporting clinical research in the U.K.

Germany is projected to prosper with the highest CAGR owing to the rising demand for effective CRO Services. This is because Germany offers a vibrant and highly diversified contract research landscape. Moreover, Germany is known for its excellent academic and clinical research, and it is considered Europe’s leading country in terms of a number of clinical studies conducted. It has become important for the biopharmaceutical companies for innovation to outsource their research as it is helping them in managing their dugs development process. CROs in Germany offer expertise in preclinical & clinical R&D and therefore become strategic partners of these biopharmaceuticals companies for the complete development pathway.

KEY INDUSTRY PLAYERS

Continuous R&D Initiatives and Strategic Acquisitions by Key Players to Surge Sales Growth

The competitive landscape reflects a competitive scenario with the presence of a number of companies with diverse product portfolios. Key players in developed countries, growing investments in the research sector to develop innovative therapeutics, and increased outsourcing by major pharmaceutical and biotech companies are likely to dominate the competition scenario during the forecast period. Players engaged in drug therapy in the European market with considerable market share include IQVIA, Icon plc, Pharmaceutical Product Development and Lab Corp Drug Development. Some of the other key players include PSI, PHASTAR, and Oy 4Pharma Ltd. These players specialize in the manufacturing of generic versions of the various autism spectrum disorder therapeutics.

LIST OF KEY COMPANIES PROFILED:

• Pharmaceutical Product Development, LLC (Thermo Fisher Scientific ) (U.S.)


• Medpace Holdings, Inc.  (U.S.)


• Parexel International Corporation (Ireland)


• IQVIA (U.S.)


• Laboratory Corporation of American Holdings (U.S.)


• Charles River Laboratories (U.S.)


• PHASTAR (U.K.)


• Oy 4Pharma Ltd (Finland)


• PSI (Switzerland)

KEY INDUSTRY DEVELOPMENTS:

• December 2021 – Thermo Fisher Scientific Inc. completed the acquisition of Pharmaceutical Product Development, LLC. This acquisition enhanced the key services and offerings of the company.


• December 2021 - Laboratory Corporation of America Holdings completed the acquisition of Toxikon Corporation. This acquisition bolstered the company’s strong non-clinical development portfolio.

REPORT COVERAGE

An Infographic Representation of Europe CRO Services Market

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The research report provides a detailed analysis of the market. It focuses on key points such as leading companies, product type, and leading segments of the type and treatment. Furthermore, it offers insights into the market trends and highlights key industry developments, impact of COVID-19 on the market, regulatory and reimbursement scenario, and prevalence of chronic diseases. Also, the report includes factors that have contributed to the growth of the developed market in recent years.

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