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The global life science analytics market size was valued at USD 12.81 billion in 2022. The market is projected to grow from USD 15.27 billion in 2023 to USD 37.20 billion by 2030, exhibiting a CAGR of 13.6% during the forecast period.
The life science analytics market includes software, solutions, or analytical applications that are majorly used for the research and development of new drug therapy by pharma and biotech companies and contract research organizations. These analytical applications are used for the early detection of treatment patterns, developing personalized therapies, analyzing the company’s revenues, and achieving operational excellence in the patient’s journey. The increasing investment of pharma & biotech companies in the research and development of drug therapy products is expected to primarily spur the global life science analytics market growth during the forecast period.
Moreover, the growing adoption of new software technologies for managing complex data, such as revenue tracking of commercial products, is majorly contributing to the market growth. Along with this, the installation of cloud infrastructure aids in displaying real-time data of drugs under development and contributes to the market penetration of these products and services.
Continuous Adoption and Integration of Digital Technologies Contributed to the Growth of the Market
The COVID-19 impact on the market growth was positive. The increased number of patients suffering from the COVID-19 pandemic emphasized manufacturers to focus on research and development of new vaccines. This factor significantly contributed to the increased adoption of software and solutions based on cloud infrastructures and accelerated the drug development process for COVID-19 vaccines. These applications were also in demand for the management of commercial analytics and supply chain networks of companies to improve operational efficiency during the pandemic.
Moreover, the major players operating in the market witnessed a growth in their revenues owing to the demand for software and services during the COVID-19 pandemic.
In the post-pandemic scenario, the demand for analytical solutions was continuously rising in the medical devices and pharmaceutical sectors as these systems aid in improving the payer management system in the medical device sector and alert operational issues in the pharmaceutical industry.
Rising Advancements in Data Science and Increasing Adoption of Cloud Services
The life science industry is undergoing enormous changes in terms of clinical data management, medication discovery, and analytical capacities. Moreover, the pharma & biotech companies are making a large amount of investments to embrace cutting-edge technologies and speed up the drug discovery process. This ultimate need to accelerate the drug discovery process has led to the adoption of cloud infrastructures in the life science industry as they effectively control healthcare expenditures and monitor the rising prevalence of chronic diseases.
The lower cost associated with cloud infrastructures, their effective way of managing large data, and the added advantage of strong security majorly contribute to its growing adoption.
In addition, the rising collaborations between market players and research organizations for developing innovative and effective gene therapies using cloud infrastructures are contributing to its growing adoption in the market.
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Increasing Use of Analytical Solutions for a Comprehensive and Flexible Research Study to Spur the Market Growth
Clinical trials are an integral to any product development and are required by the Food and Drug Administration before they are introduced to the market. A substantial amount of preclinical studies capitulating efficacy, toxicity, and safety information are conducted before the launch of any drug product.
Developing novel drugs is costly and time-consuming and has a minimal clinical trial success rate. For instance, according to an article published by Cancer Research UK in February 2022, it may take over 10 to 15 years or more to complete three phases of clinical trials. However, using analytical tools in drug development can be promising and potentially accelerate different stages of the research and development process by significantly reducing the cost. Different analytical tools, such as SAS Life Science Analytics Framework, ClinACT, Veeva Vault EDC, and others, assist research professionals in identifying new potential candidates that can be screened and validated. These factors have contributed to the increased adoption of analytical tools across the life science industry.
Moreover, the increasing focus of the market players to develop and introduce new software for analyzing the real-time effectiveness of the drugs and other treatments is expected to boost the demand and adoption of these products during the forecast period.
Increasing Adoption of Healthcare Data Management Platforms in Hospitals to Propel Market Growth
The rising prevalence of various diseases has contributed to an increase in the healthcare expenditure by many governments. For instance, according to an article published by Investopedia in April 2023, the U.S. national healthcare expenditure (NHE) is estimated to reach USD 6.3 trillion by 2028. The main contributors to the rise in expenditures are an increase in the prescription rate of drugs for treatment and the increased cost of physician and clinical services.
Therefore, it has become necessary for hospitals to efficiently measure the cost-effectiveness of different therapies for health technology assessment (HTA) and regulatory purposes. Moreover, the growing need for technology for analyzing and transforming unstructured patient data contributes to its growing demand.
Thus, the increasing patient population suffering and seeking treatment for diseases and the vision of regulatory authorities of reducing the medical expenditure of a person undergoing that treatment is expected to spur the market growth during the forecast period.
High Cost of Implementation and the Concerns Related to Data Breaching May Limit Life Science Analytics Penetration
The use of an analytical tool helps organizations by accelerating their research and development process, aiding in the reduction of the cost and time spent on the drug discovery process. In commercial analytics, this platform aids organizations in navigating the complexity of key performance indicators (KPIs) and the cost of ownership. This allows commercial teams to scale across portfolios and build new revenue-generating strategies.
As these analytical solutions are extremely important and play a major role in turning up the wheels of the business, there has been a considerable growth in the demand for these solutions and platforms, resulting in high implementation costs. For instance, according to an article published by Itrex Group in September 2022, 63.0% of businesses spend their money on analytical tools to improve the efficiency of their business.
The cost of analytical tools depends on factors such as the amount and quality of the corporate data, the organization's analytical needs, the choice of analytical tools, and the customization efforts.
Although technological advances have contributed to economic growth, it has also led to increased incidences of cyberattacks resulting in data breaching. The growing trend of using cloud computing's analytical tools for research purposes has contributed to the increased risk of data breaches.
Therefore, the outflow of confidential information from the end user is also a growing concern among the operating players, limiting the growth of the market.
Increasing Cost and the Changing Expectation of Patients is Leading Businesses to Adopt a Modern Services Approach
By type, this market is segmented into software & solutions and services.
The rising cost of healthcare facilities, continuously changing expectations of patients, and improvement in the treatment service models aided the services segment to dominate in 2022 and grow at a higher CAGR.
The biopharma industry underwent an unprecedented situation due to the COVID-19 pandemic, which demanded a change, allowing the possibility of new science and technology to grow prominently and drive revenue growth in the forthcoming future. With the growing need for clients to embrace new technology in drug development, many of the players in the life science analytics industry have started providing services for the R&D of drug molecules.
Moreover, many key players are providing services for managing supply chain operations. They provide medtech consulting services that can put scientific health data in a structured format and aid organizations in building appropriate solutions.
The increasing expectations of patients for personalized therapies have enabled technology to become an integral part of patient's treatment. Therefore, to meet this personalized demand, many organizations have accelerated and adopted the changes to add value to their patients.
Therefore, the ease and the reduction of time offered by organizations in accelerating their research and development activities contribute to the growing adoption of the services offered by the life science analytical service providers.
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The On-demand segment Led in 2022 Owing to its ability to accelerate the Research Process
In terms of delivery, the market is divided into on-premise and on-demand.
The on-demand segment held the largest share in 2022, owing to its growing adoption in the pharmaceutical industry and contract research organizations for the drug development process.
Adding more physical or virtual infrastructure to scale up the on-premise environment often comes at a considerable cost, which does not have the ability to meet the actual capacity needed. The control of an on-premise environment is an enterprise's responsibility, including the cost of maintaining an IT team for infrastructure maintenance. In addition, the common threats of data breaches, compromised credentials, and malicious insiders are major concerns for the loss of confidential data, limiting the growing adoption of on-premise products and services.
Therefore, the introduction of cloud technology has majorly contributed to the increase in the adoption of services offered by life science analytics companies. Moreover, cloud computing technology offers streamlined information sharing, ensuring safety and compliance, supporting AI and machine learning, enabling faster IT growth, and making digital resources more flexible.
Thus, factors such as improved efficiency, improved connectivity and accessibility of the data, faster deployment of work, and improved levels of security are contributing to the preferential shift of organizations from on-premise systems to on-demand systems.
Range of Services Offered by Service Providers to Fuel Clinical Research Analytics Segment Growth
By application, the market is segmented into commercial analytics, personalized therapy, clinical research analytics, and supply chain analytics.
The clinical research analytics segment dominated the market in 2022. The new economic environment changes demanded by the biopharma industry and the rising cost of patient care have encouraged manufacturers and developers to focus on delivering more effective and affordable personalized treatments. To meet this rising demand, many service providers are offering a range of services to organizations conducting clinical trials for developing new drug molecules. These service providers have also emphasized providing patients with data-driven personalized care for treating patients based on their unique genomic characteristics across different therapeutic areas.
The commercial analytics segment is projected to grow at a significant CAGR rate during the forecast period. The increasing demand for different tools for examining target customers, building cost reduction strategies, and fraud detection analytics with proper data visualization is primarily driving the segment growth. These analytical tools and techniques also aid organizations in identifying growth opportunities, which allows users to create and execute new product strategies based on historical data. Thus, the involvement of commercial analytics for monitoring and reporting an organization's operational status and competitive forces are a few other factors contributing to segment growth.
On the other hand, the adoption of analytical tools by the life science industry is also on the rise for the effective management of their supply chain operations, as disruption in logistics can bring huge financial losses to the company.
Pharma & Biotech Companies Segment Dominated due to Continuous Investment in the R&D of New Drug Molecules
On the basis of end users, the market is segmented into medical device companies, pharma & biotech companies, contract research organizations, and others.
The pharma & biotech companies segment dominated the market in 2022. The continuous investment by these industries in the research and development of new drug molecules and products primarily contributes to the segment growth. The reduced cost and time for developing molecules have increased the adoption of analytical tools in the industry. Moreover, factors such as improvement in the existing production process, assisting in meeting regulatory compliances, and building sales and marketing strategies for their upcoming products also contribute to segment growth.
This rising adoption of analytical tools in the pharmaceutical and biotech industry has encouraged many players to launch new products to the market.
The contract research organizations segment is expanding at a significant growth rate. The rising prevalence of cancer and rare diseases among the general population has led to growth in the preference of healthcare professionals to prescribe personalized medicines. This growing demand for personalized medicines has emphasized manufacturers adopting tools and systems that can accelerate the speed of their development process.
The medical device segment is projected to grow at a significant CAGR. The growth in the segment is due to the growing adoption of these analytical tools in the medical device industry for gaining insights about targeted sales. These tools also aid manufacturers in logistics organizations by preventing human errors and providing improved quality control of the devices.
On the basis of region, the market is divided into the Asia Pacific, Latin America, the Middle East and Africa, North America, and Europe.
North America Life Science Analytics Market Size, 2022 (USD Billion)
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North America market for life science analytics accounted for the largest share and generated a revenue of USD 5.40 billion in 2022. The region is anticipated to dominate the market during the forecast period owing to the rising incidence of various diseases and high diagnosis and treatment rates. Moreover, as the region has well-established R&D centers, analytical tools are more prominently adopted.
On the other hand, Europe market for life science analytics accounted for a substantial share in 2022. European countries are considered some of the largest economies for the life science industry across the globe, as they strongly focus on exports. The region also has a good amount of market volume regarding patients, manufacturers, and providers. Among these countries, Germany is considered one of the number one healthcare markets driven by innovations in pharmaceuticals and medical biotechnology. In addition, the strong infrastructure of research and development facilities of different pharmaceutical industries makes it one of the prime hubs for investment. This strong infrastructure of research and development facilities of the pharma and biotech companies has brought opportunities for many analytical service providers to install their base in the region, contributing to the market growth.
The market in Asia Pacific is expected to grow at a higher CAGR compared to other regions. As the region's healthcare expenditure is growing and it is home to 60% of the global population, it offers huge commercial opportunities to biopharma, medical devices, and healthcare companies. This has aided many multinational pharmaceutical and biotech companies in introducing their R&D centers in the region. Therefore, to stay ahead in this growing competition, analytical tools and solutions are necessary.
Furthermore, Latin America and the Middle East & Africa markets for life science analytics accounted for a smaller share in 2022. Both these regions are expected to grow at a slower CAGR comparatively during the forecast period. Lack of security, infrastructure, and rising cost of operations have been some of the reasons for the delivery of the products. To overcome these challenges, pharmaceutical and biotech companies opted to use analytical software and solutions for the timely and safe delivery of their goods and products. This contributed to the increased adoption of analytics solutions for managing supply chain operations, contributing to market growth.
Similarly, improving healthcare infrastructure and rising partnerships and collaborations among the leading companies to improve the accessibility of drugs and products are augmenting the market growth in the Middle East & Africa and Latin America.
Increasing Focus on Technological Development by Major Companies to Strengthen Market Outlook
This is a consolidated market comprising a large number of players with a wide range of products and services to offer. SAS Institute Inc., is one of the major players in the market. The continuously growing investment of pharma & biotech companies for research and development of new drug molecules is one of the major reasons contributing to the company's growing global life science analytics market share. Also, the continuous effort of the company to upgrade its technology is another factor contributing to the higher market share of the company.
Similarly, Accenture is increasing its focus on launching new products and services according to the growing demand in the market. The introduction of the products globally with strategic mergers and acquisitions to cater to the rising demand across the life science industry contributes to the company’s market hold.
The growing investment of life science industry players in analytical tools for improvement of their production process, product efficiency, and building their sales and marketing strategy is expected to mainly contribute to growth in the market share of other companies in the future.
An Infographic Representation of Life Science Analytics Market
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The research report covers a detailed analysis and overview of the market. It focuses on key aspects such as competitive landscape, type, delivery, application, end users, and region. Besides this, it offers insights into the market drivers, market trends, market dynamics, COVID-19 impact on the market, and other key insights. In addition to the factors mentioned above, the report encompasses several factors that have contributed to the growth of the market over recent years.
CAGR of 13.6% from 2023-2030
By End Users
Fortune Business Insights says that the global market stood at USD 12.81 billion in 2022 and is projected to reach USD 37.20 billion by 2030.
In 2022, the North America market value stood at USD 5.40 billion.
The market is expected to exhibit steady growth at a CAGR of 13.6% during the forecast period (2023-2030).
Based on application, the clinical research analytics segment dominated the market in 2022.
Increasing use of analytical solutions for comprehensive and flexible research study is the key driving factor.
SAS Institute Inc., Accenture, and Veeva Systems are some of the major players in the market.
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