Half of Drug Discovery Research Contracted Out? Report Says to Expect That in 3-4 Years

ROCKVILLE, Md., April 9, 2018 /PRNewswire/ -- Nearly close to half of drug discovery research will be contracted to CROs is a good estimate based on in-the-know contacts and research. This finding was made in Kalorama Information’s Outsourcing in Drug Discovery, 8th Edition. The healthcare research firm looks at the market every two years, interviewing industry experts and consolidating financial results. The firm places the market for outsourced drug discovery at 24 billion, and says it grows fast - 17% last year alone.

“In our last edition we estimated that half would happen in five years,” said Bruce Carlson, Publisher of Kalorama Information. “So where is it now? On track. We believe the industry is at roughly forty percent outsourcing for discovery services and the outsourcing is on the increase. In our latest report we still see that happening, maybe four years from now.”

Current trends in the pharmaceutical industry are creating new opportunities as well as challenges for companies as they strive to continue generating above-average shareholder returns. Opportunities can be seen in technological advances that are leading to an improved understanding of the causes of diseases, enabling companies to develop new drugs for previously untreated conditions. Challenges also abound.

The global pharmaceutical market in 2016 was estimated to have reached between $967 billion and $1.05 trillion. It is estimated that global spending on pharmaceuticals reached about $1.2 trillion in 2017. Although the pharmaceutical market is strong, the industry faces challenges that impact its ability to maintain profitable growth. One such challenge is the loss of profits from blockbuster drugs, representing about 50-60% of pharmaceutical sales, which come off patent within the next few years. Pharmaceutical companies are under intense pressure to replace these drugs with new ones.

The rate of new drug development has stagnated despite large annual allocations in R&D spending. Moreover, profit margins have decreased because the NMEs that do make it to market lack the market size/revenue of their predecessors, which portend the end of the blockbuster era.

That’s driving outsourcing, according to Kalorama Information.

“Tasks that companies outsource include HTS, chemistry services, biologics, lead optimization,” said Carlson. “In our report we go into detail with specific market opportunity sizing for each category within those larger service areas.”

About Kalorama Information

Kalorama Information, a division of MarketResearch.com, supplies the latest in independent medical market research in diagnostics, biotech, pharmaceuticals, medical devices and healthcare; as well as a full range of custom research services. Reports can be purchased through Kalorama’s website and are also available on www.marketresearch.com and www.profound.com.

We routinely assist the media with healthcare topics. Follow us on Twitter, LinkedIn and our blog on our company website: https://www.kaloramainformation.com/.

Press Contact:
Bruce Carlson
212 807 2262
bcarlson@marketresearch.com