Pharma clinical trials outsourcing on the rise in 2011: Kalorama Study

December 28, 2011: A recent study has found that more than 33 per cent of the clinical trials that are being performed by Pharma companies are being outsourced to third party service providers.

There is also increase in the value of the activities that are being outsourced. The worth of the portion of global research and development activities that were outsourced to third party service providers has reached $ 36.6 billion in 2011, an increase by 6.6 per cent from $ 31.8 billion in 2009.  This statistics were published in the report prepared by Kalorama Information. At the same time, the portion of the drug development expenses that was set apart for in house core functions has reduced from 74 per cent to 62 per cent over the last year.

The earlier studies conducted by Kalorama Information has found that outsourcing has now become a must for manufacturers, which was considered as a ‘should’ activity earlier. The shift from ‘must’ to ‘should’ has been observed for the past two years.

The report on Outsourcing in Drug Development: The Contract Research (clinical trial) Market also observes that post approval studies presents huge opportunities for third party research organizations.

The main purpose of the post-approval trials is to meet the regulatory commitments. In addition to this, it also aims at imparting knowledge about a product’s efficacy, safety and effectiveness in actual use settings. The post approval trials have emerged as an effective tool for companies to distribute their drug more widely and for longer periods. During the past it was the Phase ii and phase iii trials of the clinical research functions that were outsourced. 

The spending on Research and Development on Phase 1 trials has started to increase beyond the spending on phase ii-iii in the year 2003. Till 2006, phase 1 was the rapidly expanding segment in the drug development process. However presently, both the phases grow at the same rate.

The drug companies are adopting Research and Development outsourcing due to the complex regulatory requirements. The increasingly complex regulations need the Pharma companies to create huge amount of complex data to get regulatory approval. Most of the Pharma companies have limited experience in handling the regulatory environment and as a result they are able to introduce less number of products in the market. This is the main reason why such companies go for outsourcing where the outsourced third party research firm takes the drug through the regulatory process.

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