Featured Dr Chitra Lele, Sciformix Corporation
Opinions differ on whether size is an advantage when working with a CRO
With the tough operating environment during the financial crisis starting to recede, clinical outsourcing is now growing at around 10% a year with more and more studies being outsourced by a resurgent biopharma industry that is trying to cut R&D expenses in order to boost profitability.
Smaller biopharma companies are benefiting from a surge in financing from venture capital, secondary offerings and public listings, which is helping to boost volumes and pricing outsourced services.
The top seven CROs accounted for more than half the $23bn-plus industry spend on CRO services last year, according to a recent blog post from PharmSource president Jim Miller. While the sector as a whole grew 40% over that period, the big players grew almost 60%, showing that “size has proven to be a major competitive advantage”, he notes.
“While we are sure that the trend of preferred partnerships with large CROs is here to stay, we believe that there is a distinct role that niche vendors will continue to play and be an important part of the provider ecosystem,” says Chitra Lele, chief scientific officer at India-based CRO Sciformix.
Niche regional providers are also more likely to work with the local affiliates of large pharma companies and with mid to small size pharma companies, according to Lele, who says there are also increasingly opportunities for smaller players to work with larger CROs.
“CROs have to continuously invest in human and other resources to ensure delivery as per client expectations, and this can add to their overheads and impact the cost benefit of the deals,” she notes, adding: “they sometimes partner with niche providers who are able to provide the right skills at the right price and assume part of the responsibility of ensuring quality and timeliness of projects.”