Healthcare CRO Services Market Size, Share & Trends Analysis Report By Service Type (Early Phase Development, Clinical Research Services, Laboratory Services, Consulting Services), By Therapeutic Areas (Oncology, CNS Disorder, Cardiovascular Disease, Metabolic Disease, Infectious Disease, Diabetes, Other Therapeutic Areas), By End-User (Pharmaceutical and Biopharmaceutical Companies, Medical Device Companies, Academic Institutes) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global healthcare CRO services market size was valued at USD 49.98 billion in 2022. It is estimated to reach USD 87.35 Billion by 2031, growing at a CAGR of 6.4% during the forecast period (2023–2031).

A corporation that supports the pharmaceutical, biotechnology, and medical device sectors by contracting out research activities is known as a contract research organization (CRO). A CRO might offer commercialization, clinical development, clinical trial management, pharmacovigilance, outcomes research, and real-world evidence, among other services. CROs are created to save costs for businesses creating novel medications and pharmaceuticals for specialized markets. They seek to simplify drug development and market entrance because it is no longer necessary for huge pharmaceutical companies to handle everything "in-house." CROs also fund foundations, research institutions, universities, and governmental bodies (such as the NIH, EMA, etc.). It also emphasizes therapeutic fields like oncology, CNS disorders, cardiovascular illness, metabolic disorders, infectious diseases, and diabetes.

Highlights

• Clinical research services dominate the service type segment
• Oncology dominates the therapeutic areas segment
• Pharmaceutical and biopharmaceutical companies dominate the end-user segment
• North America is the highest shareholder in the global market

Market Dynamics

Global Healthcare CRO Services Market Drivers

Increasing R&D Spending

The study of numerous small compounds and their mechanisms, such as protein mechanisms, for therapeutic use and oncology, stem cell, cancer, and drug discovery, have all shown a consistent demand. Clinical trials for the products of small- and medium-sized pharmaceutical and biotechnology companies are a continuing emphasis. As a result, the public and private sectors invest more in R&D to create innovative and practical solutions, stimulating the market for healthcare CRO services. For instance, to increase STEMCELL Technologies' capacity for research and manufacturing and to diversify its product offering, BDC Capital invested USD 15 million in the Canadian company in February 2018. Market expansion will be accelerated by increased government funding for R&D and research funding.

Significant Increase in Cancer Incidences Across the Globe

Recent years have seen a noticeable increase in cancer incidences worldwide. The most common cause of death around the world is cancer. For instance, the U.S. National Institute of Health (NIH) estimates that there were 1,735,350 new cases of cancer identified in the U.S. in 2018, and 609,640 cancer-related fatalities were reported. As a result, numerous public and governmental entities continually concentrate on creating novel drugs or chemicals for its treatment. In order to perform clinical trials, these businesses have contracts with healthcare contract research organization service providers, which helps the market expand.

Global Healthcare CRO Services Market Restraint

Lack of Qualified Workers and Healthcare Professionals

The need for clinical trials has grown as new medications and devices to treat various disorders are developed. The healthcare industry has also seen an increase in technological advancements. These cutting-edge medical tools are used in clinical trials to reduce the number of man-hours needed to run numerous tests or studies concurrently. The main factor limiting the market's growth is the lack of qualified workers (technicians and lab technicians) with advanced laboratory competence, experience, and knowledge, particularly in remote healthcare organizations. The U.S. Department of Labor's Bureau of Labor Statistics found that the shortage of lab technicians continued in 2019. The alarming rise in demand for lab technicians is predicted to have a negative impact on the market by 2026.

Additionally, there is a scarcity of medical laboratory technologists in Canada. The Canadian Society for Medical Laboratory Sciences reports that in 2018, almost 50% of laboratory technologists were over the age of 45 and were expected to retire within the next ten years. As a result, the demand for skilled laboratory professionals in the R&D and clinical diagnostic sectors is anticipated to grow significantly. The lack of qualified workers to operate the machinery prevents the market for healthcare CRO services from growing.

Global Healthcare CRO Services Market Opportunities

Growing Need for Novel Clinical Trials

Gene and cell therapies are intricate and highly specialized. They are thought to satisfy unmet medical requirements. This has spurred investment in creating and marketing novel cell and gene therapies. By April 2021, the FDA had approved 16 cell and gene therapies. In 2020, about 362 cell and gene therapies were in the clinical development stage. In addition, the demand for facilities that provide R&D services for these therapies has expanded due to the rising number of cell therapy candidates and their quick advancement through the various stages of clinical development. Therefore, the end-users, including biotech corporations and academics, rely on CROS for their specific skills and scientific understanding. CROS also provides greater regulatory clarity and a wider geographic scope for clinical investigations. Such factors propel the market for CRO services.

Regional Analysis

North America Dominates the Global Market

Based on region, the global healthcare CRO services market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North America is the most significant global healthcare CRO services market shareholder and is estimated to exhibit a CAGR of 6.21% over the forecast period. The presence of well-known companies and healthcare CRO service providers aid in the industry's growth. This is due to major pharmaceutical and biotech corporations like Thermo Fisher Scientific and Merck KGaA in the nation. These businesses continuously perform research to create new pharmaceutical treatments to treat a range of disorders, which helps the market for healthcare CRO services thrive. In addition, technological improvements and an increase in R&D for a better understanding of the underlying mechanisms of various diseases drive the development of the market.

Europe is expected to exhibit a CAGR of 6.5% over the forecast period. The primary drivers of market expansion in Europe are the prevalence of chronic illness and anxiety disorders. Europe currently has a robust and quickly expanding biotechnology industry and research base. In addition, Europe has changed its degree of funding for biotechnology-related research and inventions significantly during the past few years. For instance, European governmental organizations support inventions, frequently through a web of tax breaks for research. The Clinical Trials Directive was also one of the most important pieces of legislation adopted by European governments in 2012. This legislation made the regulatory environment for clinical trials in Europe simpler, which also helped open lucrative business opportunities for biotech firms.

Asia-Pacific has a sizable market potential for growth for healthcare CRO service providers due to the rising demand for drug discovery and increased focus on the biotechnology sector. In addition, the Asia-Pacific biotech industry has advanced quickly due to the increased focus on novel medicine innovations. Due to rising technological advancements and financing provided by governmental and commercial organizations, Asia-Pacific is regarded as one of the regions with the fastest-growing biotechnology and pharmaceutical markets. Additionally, more investment by biotechnology and pharmaceutical firms in the area is anticipated to raise market demand during the projected period. Additionally, a rise in small-scale biotechnology firms, greater government financing, and increased biotechnology research all contribute to the market expansion of CRO service providers.

In Latin America, the rise in CRO services is brought on by rising demand from the research and healthcare sectors and an expansion of the healthcare system in this area. The market is expected to rise due to population expansion, the strengthening of the economy, and higher government healthcare spending. Most Middle Eastern and Latin American nations have seen their GDP investments in the research and technology sector grow steadily and consistently over the past several years. Additionally, it is consistent with the investment trends and objectives established by these nations' public and private sectors.

Segmental Analysis

The global healthcare CRO services market is bifurcated into service types, therapeutic areas, and end-user.

Based on service types, the global healthcare CRO services market is bifurcated into early-phase development, clinical research services, laboratory services, and consulting services. 

The clinical research services segment dominates the global market and is estimated to exhibit a CAGR of 6.8% over the forecast period. The clinical development services assist in determining the efficacy and safety of novel products and medications. Clinical studies are also conducted to evaluate a new product compared to the ones already on the market. Additionally, clinical research directly impacts the medical therapies used today. Clinical trials have led to the development of novel medications for most ailments, including asthma, diabetes, cancer, and high blood pressure. Clinical trials make a variety of breakthrough treatments and medical gadgets available, enabling people to live longer and healthier lives. These studies raise the bar for medical care, which helps to enhance services. It is projected that the development of innovative molecules will be in high demand due to the significant rise in chronic diseases.

Based on therapeutic areas, the global healthcare CRO services market is bifurcated into oncology, CNS disorder, cardiovascular disease, metabolic disease, infectious disease, diabetes, and other therapeutic areas. 

The oncology segment owns the highest market share and is predicted to exhibit a CAGR of 6.8% over the forecast period. Globally, the occurrences of cancer have significantly increased in recent years. For instance, 1,735,350 new instances of cancer were diagnosed nationwide in 2018, according to the U.S. National Cancer Institute. Also, cancer is becoming the number one killer globally. This has increased the need for affordable cancer treatments, driving the expansion of the oncology CRO market.

Based on end-user, the global healthcare CRO services market is segmented into pharmaceutical and biopharmaceutical companies, medical device companies, and academic institutes. 

The pharmaceutical and biopharmaceutical company segment dominates the global market and is predicted to exhibit a CAGR of 6.4% during the forecast period. Leading businesses' greater attention to pharmaceutical and biotech research is primarily responsible for the growth of this segment. The presence of top businesses and healthcare CRO service providers aids the market's expansion ideas. Companies are always working to develop new pharmaceutical treatments to address various conditions, helping the market for healthcare CRO services grow. Due to rising technological advancements and funding supplied by governmental and commercial entities, Asia-Pacific is one of the regions with the fastest expanding biotechnology and pharmaceutical markets.

Recent Developments

• February 2023- Leading global life sciences corporation Labcorp revealed that Fortrea will be the name of the new business that would be created due to the planned spin-off of its Clinical Development division. Fortrea would function as a standalone, publicly listed worldwide CRO that provides all-inclusive drug and medical device development services after the spin-off from Labcorp is complete.
• February 2023- An industry leader in pre-clinical engineering, design validation and verification, regulatory affairs, field clinical services, and trial management, MAXIS, was purchased by Avania, a medical technology contract research organization (CRO).