M&A activity at larger CROs a concern, according to market research

According to new analysis, M&A activity among large CROs has made some sponsors less willing to outsource clinical trials.

The analysis, – conducted by US mid-sized contract research organization (CRO) Worldwide Clinical Trials – is based on responses from 140 key CRO decision makers across emerging, small, midsize, and large pharma and biotech companies in Europe, the US and Canada.

Worldwide Clinical Trials said “nearly 50% of respondents state that large CRO instability due to mergers and acquisitions, spinoffs, and recent layoffs as a result of declining performance has negatively impacted their willingness to partner, citing disruptions to large CRO project teams, talent, service delivery, and timelines.”

According to the CRO the survey also showed the drug industry has concerns about the amount of time larger contractors would be able to dedicate to their projects.

“Small and emerging companies expressed concerns about partnering with large CROs, as they typically feel underserved by this provider segment.

“Surprisingly, almost 40% of large pharma and biotech respondents and nearly 45% of midsize respondents, who typically receive the largest share of attention from large CROs, also stated they were concerned about partnering with large CROs due to the impact of these segment dynamics on performance and service delivery.”

According to Worldwide Clinical Trials nearly 80% of respondents said the “one-stop-shop” claim that many large CROs claim is not a cost-effective business model due to the lack of seamlessly integrated service delivery.

Mid-sized CROs

Small and Midsized CROs were deemed to be more attractive partners by respondents, with many citing the bespoke nature of the services provided by such firm as important.

“Survey participants preferred midsize CROs for their specialized service offerings, personalized attention, and cost/value benefit.

“Although many respondents perceive midsize CROs as niched for individual therapeutic areas, early phase and small-scale trials, and specific geographic locations, various midsize CROs, in actuality, do offer end-to-end capabilities globally.”

Unsplash/Samuel Regan-Asante