Werling continues by indicating that a factor for this change is that more pharmaceutical companies are becoming accustomed to outsourcing. “Of outsourced service providers, CROs have the highest penetration, with approximately 50 percent of clinical trials outsourced,” states Werling.
Another factor that’s driving the growth of pharmaceutical outsourcing is the current state of the healthcare-pharma environment. “Biotech is thriving: capital is readily available, and the US Food and Drug Administration regulatory environment for approval of new products is favorable,” tells us Werling. Pharmaceuticals are changing their mindset to be more efficiency-driven.
Other factors that Werling identifies is that the market is starting to skew towards earlier stage rather than big pharma companies. This creates excellent market fragmentation as more and more companies are creating and conducting trials to target specific subpopulations. Traditional pharmaceutical companies benefit from partnering with outsourcing companies since they often lack these particular skill set to perform such trials.
The last two factors indicated by Werling are the increasing amount of small pharma and biotech companies that have emerged over the previous decade, as well as the extra messaging and engagement needed for patient compliance with specialty drugs and personalized medicine.
Werling continues by listing some advice for investors that are evaluating a potential investment in an outsourcing company. He states that a close look and consideration should be made about the company’s team and leadership team. They should also pay close attention to how they handle regulatory oversight. Finally, there should be interest into the company’s customer base and pipeline of new potential customers or products to work with.
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