Abstract
Various Incentives Needed to Attract Skilled Contract Personnel
Large and quickly growing contract research organizations (CROs) often find
it difficult to align staffers' expertise closely with project requirements.
This could be due to the unavailability of skilled scientists and the need to
quickly staff projects. CROs have begun to utilize experienced contract
personnel who are available on short notice and need not be immediately
redeployed. The CROs, for their part, have to set up appropriate internal
systems and permit the scientists to participate in programs reserved for
full-time staff such as medical and retirement plans. Although contractors' pay
rates are higher than those of full-time employees, the overall savings is
higher.
This Frost & Sullivan research examines the World Contract Research
Organizations Markets. It offers revenue forecasts by market segment and covers
key drivers and restraints affecting market growth. It also provides strategic
recommendations to overcome market challenges. Revenue and shipment forecasts
for World, U.S., European, and Asian markets are also provided.
Cost Pressures and Benefits Offered by CROs Promote R&D Outsourcing
Cost pressures are created in the pharmaceuticals market because of decreased
client revenue due to patent expirations, price-fixing, and continually rising
costs of R&D. Many companies are beginning to tackle the problem of mounting
expenses by increasing sales resources to promote new products comprehensively,
while simultaneously clipping overheads. However, despite several measures taken
to contain costs, R&D expenditures continue to escalate, especially in
biotech and specialty companies.
This increase in R&D costs is mainly due to high clinical testing
expenses, which, in turn, is a result of the need for more comprehensive human
testing of drugs that address complicated conditions, especially among children
and seniors. CROs offer reduced testing costs to help companies in this
initiative. "They are able to do so by specializing in clinical research to
achieve economies of scale and by utilizing the latest data management
tools," states the analyst. They also conduct trials in low-cost regions
such as eastern Europe, Asia, and South America.
Data Quality Determines Selection of CRO
Although U.S.-based projects contribute a lion's share of revenues to the
World CRO market, Europe and Asia are also important hubs of CRO activity. The
most important selling quality of a CRO, regardless of its geographic location,
is its reputation for quality and thoroughness of data. "Since flawed data
can lead to product approval delays or disqualifications, data quality is a
prime consideration in the selection of a CRO and it often encourages repeat
business," notes the analyst.
The speed at which a project is completed is almost as important as its
quality. Developers lose substantial amounts of money for every day of delay in
launching blockbuster drugs. "Since the trials are complex and multiyear
long, wide variations exist in the capabilities of different CROs,
pharmaceuticals, and biotech companies to produce quality data in reduced
time," observes the analyst. This constraint has made it difficult to
recruit large numbers of staff and patients for clinical trials. Proficiency in
therapeutics will significantly enhance time-to-market and hence, boost CROs'
competitiveness.
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