In the field of medical pharmaceuticals, clinical trials are an indispensable link, this process usually takes 5 to 8 years, and its cost accounts for more than 50% of the total cost, and clinical trial projects involve many subjects, complicated affairs, from the start of the trial to the end, involving multi-party participation, is a huge and complex system engineering; Non-target business is outsourced to reduce costs and improve efficiency. At the same time, with the help of third-party institutions and the adoption of international standards for clinical trials, the clinical trial results are internationally recognized, which means that the obstacles for new drugs to enter the international market are cleared. The pharmaceutical industry has huge profit margins, and more and more countries are joining the market, and the demand for clinical trial outsourcing services will also increase.
Among them, North America is the largest market in this industry, with a market share of 44.49% in 2017, and Europe ranks second with a market share of 32.35%. Several of the main companies in the industry are also from the United States and Europe. The top three are IQVIA, Syneos Health, and Covance, with revenue market shares of 15.41%, 12.53%, and 12.23% in 2017, respectively. The top six companies account for 71.59% of the market share, and the market concentration is high.
The rise of the clinical trial outsourcing industry is an inevitable trend
In developing countries, the costs associated with in-house clinical trials are increasing due to economic and technological developments, drug discovery companies' efforts to improve their operating cost ratios, increased investment in small molecule R&D, increased investment in small biopharmaceutical companies, and increasing product lines by large pharmaceutical companies will expand the early phase clinical trial outsourcing market.
Secondly, the continuous improvement of downstream consumer and medical technology is also driving the development of the clinical trial outsourcing market. Technological advancements, increasing demand for healthcare, entry of large international players, and growth of local players will also boost the sales of early phase clinical trial outsourcing. In developed country markets, they have proprietary patented technologies, leading scientific experts, highly qualified management teams, strong health awareness, higher requirements for products, all of which play a huge role in the growing market demand for early clinical trial outsourcing.
Asia-Pacific is expected to be the fastest-growing market
With the rising R&D costs of the medical industry and the continuous expansion of the market in developing countries, the focus of global clinical trial development is shifting to developing countries.
Through our analysis, we have made some reasonable predictions: the global early phase clinical trial outsourcing industry market will grow from $465 million in 2013 to $676 million in 2018. We conducted a series of functional calculations and predicted that the early phase clinical trial outsourcing market will be worth $900 million by 2023, with a CAGR of 6.14% from 2017 to 2023.
The Asia-Pacific region is expected to be the fastest-growing market. In emerging economies such as China, India, the Philippines, Thailand and Vietnam, the growth of per capita income, population growth, rapid economic development and continuous progress in medical technology will continue to increase demand, thus bringing a broad market space.
As a representative of developing countries in the Asia-Pacific region, China has this incomparable advantage. In terms of human resources, the Chinese population base is huge, and there are many research scholars; in terms of research costs, both researcher labor fees and subject compensation are far lower than those of Western countries, and the data show that the cost of phase I clinical trials in China is about 15% of that of Western countries, the cost of phase II is about 20% of that of Western countries, and in terms of examination costs, the cost of China is only 10%-30% of that of Western countries. Therefore, the mainland must make good use of this opportunity to broaden its market.
Behind the good opportunities are huge challenges that need to be tackled
Although the early phase clinical trial outsourcing market presents some opportunities, especially in emerging countries, the study group advises new entrants who do not have the technological advantage and downstream support not to enter the field of early phase clinical trial outsourcing. In addition, companies in this sector should pay attention to their R&D, innovation and services, actively expand the markets of emerging countries, and adapt to the political and economic relations of local countries. This way they can gain a competitive advantage and gain a larger market share.
There are still many challenges waiting for China's clinical trial outsourcing industry at this stage. At present, there is still a large gap between China's domestic R&D level and Western countries, and with the continuous expansion of the CRO industry, market competition will also intensify, such as India, which has a considerable population base and low cost advantages like China, and is also constantly improving the regulatory system, will be a strong competitor in China. From a policy point of view, China has officially implemented the record-filing system since 2017, and the drug clinical trial institutions have changed from the past pre-supervision to the ex-post supervision, and a large number of drug clinical trial institutions that meet the filing conditions have entered the clinical trial market, alleviating the outstanding contradiction of the serious shortage of drug clinical trial institutions, but at the same time, the potential risks brought by the record-filing system may affect the quality of drug clinical trials, so efforts are still needed on how to effectively prevent these risks.