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The U.S. Contract Research Organization (CRO) services market size was worth USD 32.99 billion in 2022 and is projected to grow at a CAGR of 11.5% during the forecast period.
Contract research organizations conduct clinical trials for pharmaceutical, biotechnological, and medical device companies and provide research-related support services. Contract research organizations help in conducting efficient and less time-consuming studies. Increasing outsourcing by pharmaceutical, biotechnological, and medical device companies to CROs are fueling market growth.
The increasing outsourcing of research studies is due to stringent regulatory approvals and high drug or device development costs. Moreover, the increasing prevalence of chronic diseases such as diabetes, cancer, Alzheimer’s, and infectious diseases has led to an increasing focus on R&D by market players. The above factors, combined with the emergence of regional, domestic, and global contract research organizations offering various services, including end-to-end research services, are leading to increased outsourcing of services to these organizations.
During the COVID-19 outbreak, the U.S. Contract Research Organization services market experienced significant growth in 2020. The growth was due to the increased demand for research and development of vaccines and effective treatment options for COVID-19.
High Cost Associated with the R&D of Novel Drugs Fuels the Outsourcing of Clinical Trials
The entire cost for drug development, from preclinical studies to its commercialization, can be around USD 1.0 billion to USD 2.0 billion. However, the overall cost depends on the type of study being conducted, regulatory approvals, patient recruitment, and other factors. The estimated cost may increase if there are delays in the completion of the research study due to the above factors; consequently, the pharma and biotech companies’ spending on R&D increases. For instance, Bristol-Myers Squibb Company, one of the major players in the pharmaceutical industry, spent around USD 9.50 billion in 2022.
Contract research organizations help manufacturers to save time and money by reducing the time required to conduct a trial. The emergence of market players offering specific contract research organization services also assists in pharmacovigilance and regulatory approvals, thus speeding up the approval process.
To reduce their spending on R&D for novel treatment, many pharmaceutical and biotechnological companies have been outsourcing their research studies to the Contract Research Organization (CRO) services provider.
Earlier, due to the limited availability of resources, small pharmaceutical and biotechnological companies were unable to conduct exhaustive research for new drug development. After the emergence of CROs, these companies started outsourcing their R&D activities to the CROs, positively impacting the U.S. Contract Research Organization (CRO) services market growth.
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Increased Outsourcing of Clinical Trials Fuels Market Expansion
Many academic institutes and pharmaceutical and biotechnological companies have increased their focus on developing effective treatments for a rising patient population suffering from chronic conditions. The increasing focus of life science companies in the R&D for new treatment or medical device development has been fueling the number of clinical trials in the country.
Drug development costs are quite high, and any failure in clinical trials can result in losing investments. Moreover, the duration of clinical trials is estimated before the trials are initiated, which determines the cost of the clinical trials. An extension in the estimated timeline results in increased expenditure on the trials.
A Contract Research Organization services providers help manufacturers by reducing the time required for conducting clinical research, resulting in significant cost savings. Early-stage clinical trials are increasingly being outsourced to cut costs and maximize revenues. Many pharmaceutical and medical device companies are inclined toward outsourcing their R&D process to CRO services. This trend is expected to propel the market growth during the forecast period.
The number of clinical trials registered in the U.S. in 2022 was 9,901, experiencing a growth of 7.4% from 2016.
Limited Availability of Experienced Workforce is Expected to Restrict Market Growth
Industrialization has been increasing significantly. With the growing industrialization, the demand for advanced skills has increased. Market players are facing issues in hiring skilled workforce, including scientists. The limited availability of skilled workforce, with their experience in the pharmaceutical, biotechnological, and medical devices industry, is restricting the market growth in the country.
The limited availability of skilled workforce restricts the penetration of contract research organizations in the country, negatively impacting the market during the forecast period.
Based on service type, the market is fragmented into early phase development services, clinical, laboratory services, and others. The early phase development services segment is further sub-segmented into Chemistry, Manufacturing, and Controls (CMC), preclinical service, and discovery. Similarly, the clinical segment is sub-segmented into phase 1, phase 2, phase 3, and phase 4.
The clinical segment dominated the market in 2022. The segment’s dominance is attributed to the increased focus of the pharmaceutical industry on the R&D of novel treatments.
On the basis of application, the market is segmented into oncology, neurology, cardiology, infectious disease, metabolic disorder, renal/nephrology, and others.
The oncology segment dominated the market in 2022 due to the companies’ increasing focus on R&D in oncology.
Based on end-user, the market is segmented into pharmaceutical and biotech companies, medical device companies, academic and research institutes, and others.
The pharmaceutical and biotech companies segment is expected to grow at a significant CAGR during the forecast period. The segment's growth is majorly due to the increased outsourcing of early-phase development services.
The market comprises significant players such as IQVIA Inc., Icon plc, Syneos Health, Laboratory Corporation of America Holdings, and PRA Health. IQVIA Inc. accounted for a significant U.S. Contract Research Organization services market share in 2022, owing to its strong focus on R&D to enhance its services.
Other companies in the market include Parexel (MA) Corporation, Charles River Laboratories, PSI, and Medpace. These companies have been focusing on partnership and collaboration to strengthen their position in the market.
An Infographic Representation of U.S. Contract Research Organization (CRO) Services Market
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The market research report provides a detailed market analysis with market segmentation, key points such as an overview of technological advancements, and services provided by CROs. Additionally, it includes penetration of Contract Research Organization services in the U.S., new service launches, key industry developments such as mergers, collaborations, & acquisitions, and the impact of COVID-19 on the market. Furthermore, the report also offers insights into the market trends and highlights key industry dynamics. In addition to the aforementioned factors, it encompasses several factors that contributed to the growth of this market in recent years.
CAGR of 11.5% from 2023 to 2030
Value (USD Billion)
By Service Type
By End User
Fortune Business Insights says that the U.S. market was worth USD 32.99 billion in 2022.
The market is expected to exhibit a CAGR of 11.5% during the forecast period (2023-2030).
By service type, the clinical segment accounts for a considerable proportion of the market.
IQVIA Inc., Laboratory Corporation of America Holdings, Icon plc, Syneos Health, and PRA Health are the top players in the U.S. CRO market.
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