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Send Out for R&D

Faster and cheaper: thatís the allure of outsourcing parts of the research and development process. And life sciences companies seem to be buying the concept; increasingly large amounts of R&D budgets are going to outside companies to provide some portion of the R&D required to bring a drug to market. Within the next few years, outsourced services are expected to account for one-quarter of all R&D spending.

The contract research industry is composed of about 1,000 companies, including hundreds of small specialists, a dozen large players, and a handful of global leaders. An estimated two-thirds of all clinical projects take advantage of these services at some point, according to the industry research group Thomson CenterWatch. This approach apparently brings some success: a CenterWatch study found that clinical trials managed by external site management organizations were completed three weeks faster, on average, than those trials organized by companies themselves.

But when it comes to conducting research, the relationship between a contract research organization (CRO) and its clients can prove arduous. According to a report by the investment bank Lehman Brothers, emotions ran high at a recent CRO industry conference, as executives from both CROs and client organizations discussed the problems of micromanagement, bureaucracy, and inadequate communication. In fact, only one in three research centers gives a top rating to the study protocols they are given to execute trials.

The outsourcing industry continues to be concerned about a research pipeline that is relatively dry, as well as about company consolidation, which can result in redundancies that cause the cancellation or delay of planned projects. Nonetheless, business is expected to continue improving for CRO companies, despite a bit of a slump last year.


Copyright © 2003 Acumen Sciences, LLC, All Rights Reserved.


Additional charts accompanying text include:

U. S. Outsourced Clinical Trial Research

Worldwide Outsourced Drug Discovery Market

Book-to-Bill Ratios for Contract Research Organizations

Current Products in the Research Pipeline


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Metrics

BioMetrics: Prescription for Generic Drugs

» Pipeline: Send Out for R&D

Capital Markets: Financing Finds Its Footing

BioIndex: Market Keeps Its Nerve

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