Vision Research Reports Predict, the global life sciences BPO market size surpassed at US$ 370 billion in 2021 and is expected to surpass around US$ 850 billion by 2030 with a registered CAGR of 12% from 2022 to 2030.
The rising costs of drug development; pre-clinical and clinical trials; and post-marketing surveillance; a rise in the patent cliff; a growing product pipeline; and regulatory constraints are some of the major factors driving the market. The pharmaceutical and biotech industries invest heavily in the R&D sector to continuously introduce new molecules, devices, and treatments. The different stages of drug development, such as drug discovery, pre-clinical studies, and clinical trials, require huge financial, technological, and human resources.
To cater to the growing needs of the industry, the outsourcing vendors are expanding their product and service offerings and they are targeting niche areas for long-term growth and profitability. Altogether, these trends are expected to boost the life sciences outsourcing market over the forecast period. During the COVID-19 pandemic, a significant number of outsourcing providers expanded their existing manufacturing and research facilities to meet the growing demand for COVID-19 vaccines and diagnostics. Even post-pandemic, CDMOs are practicing similar strategies to support the future demand for pharmaceuticals. For instance, in April 2022, Aenova Group developed a new facility for manufacturing highly potent drugs with an investment of EUR 10 million.
The adoption of such strategies by the market players is expected to be profitable for the market.There has been a rising demand to reduce the cost of manufacturing and development of drugs and medical devices. Outsourcing manufacturing, research, and marketing services provide pharmaceutical and medical device companies with cost- and time-saving benefits. This is expected to have a positive impact on the market.Over the years, mergers and acquisition deals between CROs and CDMOs have increased. The rising demand for clinical services and the growing need for specialized service providers to improve the focus on their core competencies are some of the factors that are expected to drive the incidence of M&A deals.
Broad and Growing Product Pipeline to Drive Adoption of Advanced Life Sciences BPO
Rise in demand for new drugs and novel therapies for treatment of diseases such as cancer and immunological disorders coupled with the evolving research & development process has increased the number of compounds in pipeline in the last decade. The development of biosimilar products, cellular therapy, and immune biological products has also contributed toward the advancing pipeline and need of stringent clinical trials in the past few years. This in turn drives the global life sciences BPO market.
Efforts to Optimize Costs and Development Time
Escalating costs of conducting clinical trials, requirement of data quality, enrollment targets, financial demands regarding setting up of a clinical research practice, and other management related activities drive the outsourcing services. Outsourcing also improves the global reach with respect to drug development with minimum maintenance cost, as CROs are well-versed with regulatory requirements of various regions. According to the Tufts Center for the Study of Drug Development, outsourcing to CROs has supported companies in keeping R&D head counts stable, even though the number of active clinical trials across the world has increased by 80%. Moreover, trials outsourced to CROs are, on average, completed 30% sooner than in-house clinical trials, providing an average timesaving of four to five months.
RPA Technology Addressing Patient-centricity and Leveraging Medical Drug Research
The robotic process automation (RPA) technology is sweeping the life sciences BPO market. Outsourcing repetitive tasks and manual processes using the RPA technology is anticipated to become increasingly mainstream in developing economies of Asia Pacific. Apart from Asia Pacific, this market in both North America and Europe is estimated to witness growth in terms of revenue during the forecast period. Thus, the RPA technology is expected to generate incremental opportunities for companies in the life sciences BPO market.
The life sciences industry is in its transformative stage where there is a growing need for effective medicines and personalized digital therapeutics that improve quality of life in patients. Hence, companies in the market for life sciences BPO are increasing their focus in the RPA technology and other software robots to provide cognitive automation in medical drug research. Intelligent RPA is helping companies to address patient-centricity and eliminating manual processes. Moreover, AI and ML are helping to optimize processes, streamline costs, and improve care outcomes.
Strategic Alliances with Startups Catalyze Growth of Life Sciences BPO Market
The life sciences BPO market is largely fragmented with 10 key players accounting for 55% of the market share. This indicates that new entrants and startups are giving a tough competition to leading players. Hence, there is a growing need for strategic alliances between big companies and startups to address challenges in the market for life sciences BPO.
As suggested by the Everest Group-a Texas-based management consulting and research firm, as big companies join forces with new entrants, they can cohesively tackle challenges of stagnating growth and stringent regulations with next-gen technology tenets such cognitive computing to improve operational efficiency.
Blockchain and serialization techniques are addressing the issues of counterfeit drugs in the market for life sciences BPO. Several drivers such as data management and virtual trials are offering a big-picture view of clinical results and are speeding up go/no-go decisions. Growing awareness about investments in specialist therapies and personalized medicines are triggering market growth.
Contract Manufacturing Organizations to Lead Global Market
Based on service type, the contract manufacturing organizations segment dominated the global market in 2021. Growth of the segment can be attributed to the low cost associated with the production of active pharmaceutical ingredients, as the companies do not have to buy equipment for manufacturing. Moreover, quick turnaround time contributes to the growth of the segment. The contract research organizations (CRO) segment is likely to expand at a high CAGR during the forecast period, owing to significant increase in the number of clinical trials and rise in the demand for new drugs. Significant increase in research and development costs, technological developments, and product innovation, which accounts for high R&D costs prompt several pharmaceutical and medical device companies to outsource preclinical services to CROs. This in turn augments the segment.
In 2021, the pharmaceutical outsourcing segment dominated the overall market and accounted for the largest revenue share of more than 54.5%. Growing demand for low-cost drugs, increasing numbers of patent expirations, and rising awareness among the huge pharma companies to manage the overall company’s supply chain to maximize their profits are some of the factors that are responsible for the majority of market share. Moreover, increasing demand for reducing fixed costs among pharmaceutical companies, increasing pressure from regulatory bodies, and growing complexity in clinical trials are among a few factors that are expected to drive the segment’s growth during the forecast period. The pharmaceutical contract research segment has held a significant share in the market.
This is because there is a growing interest by various public companies to focus on their core competencies rather than research. Apart from this, the surge in the geriatric population and the growing prevalence of various diseases, such as diabetes, cancer, and genetic disorders, are among a few factors that are expected to boost the demand for drugs over the forecast period, thus contributing to the demand for research.The medical device outsourcing segment is expected to grow at the fastest CAGR over the forecast. The complexities associated with medical device manufacturing and the strict regulatory landscape for medical device approval globally are the key factors responsible for the segment’s growth. Moreover, the increasing demand for medical devices combined with the rising price competition and the requirement to reduce costs is expected to drive the market during the forecast period.
Asia Pacific dominated the overall marketin 2021 and accounted for more than 35.5% of the overall revenue share. The region is also anticipated to register the fastest growth rate over the forecast period. The presence of untapped opportunities, constantly improving healthcare infrastructure, economic development, and an increasing number of skilled professionals are some of the factors drivingthemarket growth. In addition, the presence of a significant number of CDMOs providing cost-effective research and manufacturing services is also contributing to Asia Pacific market growth.India and China are the key hubs for the life sciences outsourcing market. India and China account for the majority of the Active Pharmaceutical Ingredients (APIs) and finished product exports across the globe.
The presence of a strong scientific community, the maximum number of U.S. FDA authorized manufacturing sites (outside the U.S.), and favorable government initiatives, such as “Make in India” are amongthe key factors expected to drive the market over the forecast period. North America also held a significant share of more than in 2021. An increasing geriatric population, growing demand for technologically advanced drugs, and a rising need for improved streamlining of the overall supply chain model of the pharmaceutical and medical device industry to reduce costs are among a few factors that are expected to drive the segment growth during the forecast period. Moreover, growing R&D cycle time and the rising need for speed-to-market drugs, clinical trials, and other services are some of the factors that are expected to boost the adaptation rate of BPO services in North America.
Manufacturers are adopting strategies such as acquisition, collaboration, and distribution to increase share in the global life sciences BPO market. In February 2020, Charles River Laboratories International, Inc. signed an agreement to acquire Citoxlab for US$ 510 Mn. Citoxlab is a non-clinical CRO specialized in regulated safety assessment services, non-regulated discovery services, and medical device testing. In January 2018, Charles River Laboratories International, Inc. completed the acquisition of KWS BioTest Limited for US$ 20.3 Mn. The latter is specialized in in-vitro and in-vivo discovery testing services for immuno-oncology and inflammatory & infectious diseases.
Leading players operating in the global life sciences BPO market are IQVIA, Laboratory Corporation of America Holdings, Syneos Health, Inc., Parexel International Corporation, PRA Health Sciences, Inc., Charles River Laboratories International, Inc., WuXi AppTec Co., Ltd., ICON plc, Medpace Holdings, Inc., and Pharmaceutical Product Development, LLC.
By Service Type
Scope of the Report
VRR’s report on the global life sciences BPO market studies past as well as current growth trends and opportunities to gain valuable insights of these indicators for the market during the forecast period from 2019 to 2027. The report provides the revenue of the global life sciences BPO market for the period 2017–2027, considering 2020 as the base year and 2027 as the forecast year. The report also provides the compound annual growth rate (CAGR) for the global life sciences BPO market during the forecast period.
The report has been prepared after an extensive primary and secondary research. Primary research involved bulk of research efforts, wherein analysts carried out interviews with industry leaders and opinion makers. Extensive secondary research involved referring to key players’ product literature, annual reports, press releases, and relevant documents to understand the global life sciences BPO market.
Secondary research also included Internet sources, statistical data from government agencies, websites, and trade associations. Analysts have employed a combination of top-down and bottom-up approaches to study various phenomenon in the global life sciences BPO market.
The report includes an elaborate executive summary along with a snapshot of the growth behavior of various segments in the scope of the study. Furthermore, the report sheds light on changing competitive dynamics in the global life sciences BPO market. These indices serve as valuable tools for existing market players as well as for entities interested in entering the global life sciences BPO market.
The report delves into the competitive landscape of the global life sciences BPO market. Key players operating in the global life sciences BPO market have been identified, and each one of these has been profiled for their distinguishing business attributes. Company overview, financial standings, recent developments, and SWOT are some of the attributes of players in the global life sciences BPO market that have been profiled in this report.
Key Questions Answered in Life Sciences BPO Market Report
A unique research methodology has been utilized by TMR to conduct a comprehensive research on the growth of the global life sciences BPO market and arrive at conclusions on the future growth prospects of the market. This research methodology is a combination of primary and secondary research, which helps analysts warrant the accuracy and reliability of the drawn conclusions.
Secondary sources referred by analysts during the production of the global life sciences BPO market report include statistics from company annual reports, SEC filings, company websites, World Bank database, investor presentations, regulatory databases, government publications, and industry white papers. Analysts have also interviewed senior managers, product portfolio managers, CEOs, VPs, and market intelligence managers, who have contributed to the production of VRR’s study on the global life sciences BPO market as primary sources.
These primary and secondary sources have provided exclusive information during interviews, which serves as a validation from the life sciences BPO market leaders. Access to an extensive internal repository and external proprietary databases allows this report to address specific details and questions about the global life sciences BPO market with accuracy. The study also uses the top-down approach to assess the numbers for each segment and the bottom-up approach to counter-validate them. This has helped in reaching VRR’s estimates on the prospects of the global life sciences BPO market more reliably and accurately.
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