CROs in developing countries set for outsourcing boom says study
CROs in developing countries are set to win more business as drug firms come under pressure to reduce prices elsewhere according to new research.
The study – published in a recent edition of Knowledge International Journal – looked at the dynamics driving clinical trial outsourcing and found that – to a significant extent – cost reduction and regulatory expertise remain the most significant drivers.
“Companies are focused on shortening duration, lowering costs, enhancing efficiency and minimizing usage of resources. All these challenges are forcing the pharmaceutical industry to change its drug development model from a model relying on internal capacities to an open model that embodies aid from a Contract Research Organization (CRO).”
And outsourcing is only likely to increase as drug companies come under increasing pressure to reduce prices according to the authors.
“Cost pressures within national health services are leading to a progressive downward movement of prices while market penetration by generics is facing a rapid increase. Most of the experts in life sciences consider that the current pharmaceutical business and research model is no longer sustainable.”
Developing CROs
One emerging alternative is the decision to focus on outsourcing to contractors based in emerging markets.
According to the authors drug companies “see greater opportunity in doing business with developing countries, where services in the area are offered at lower prices. In recent past these countries were perceived only as a market for final pharmaceutical products.
“However, the financial crisis in developed countries opened new opportunities in areas such as development and production of new drug molecules. Many countries with growing economies are attractive in terms of having talented, educated and competent staff, as well as technical facilities of high quality able to meet the high standards in this area with significantly lower prices.
“Therefore,” the authors conclude “pharmaceutical companies enter into partnership agreements with CROs from less developed countries.”
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