Market Dynamics
Global regulatory affairs outsourcing market drivers
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Changing regulatory landscape
The regulatory standards for life sciences companies are constantly changing and can vary by industry and location. Penalties and delays for failing to comply with the evolving regulatory requirements may result in revenue loss. According to a Genpact-sponsored poll of executives in the sector, regulatory compliance is one of the life sciences organizations' top three difficulties (72.0%). Regulatory agencies frequently have to manage several duties at once and must constantly ensure compliance with strict regulatory standards. It is anticipated that increased efforts by businesses to broaden their geographic reach and get quick approvals in international markets would further encourage the usage of outsourcing models for regulatory services.
Market players want to acquire market share by getting product approvals as soon as possible, yet regulatory clearance processes are becoming more rigorous. Due to strict regulatory requirements in industrialized economies and shifting regulations in developing ones, businesses are compelled to either create an internal regulatory department or outsource their regulatory activities. In some cases, establishing an in-house regulatory affairs division in a country of offshore operations is not feasible. As a result, businesses frequently use various outsourcing models depending on the size and importance of the projects, which helps to grow the global regulatory affairs outsourcing market.
Global regulatory affairs outsourcing market restraint
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Risks associated with data security
The market for regulatory affairs outsourcing is expected to be more vulnerable to cyber-attacks and data breaches due to the rise in data breaches and the accessibility of several electronic/digital solutions, including eCTD submissions, digital IND safety reporting, and other digital documentation. An organization may become vulnerable to cyberattacks due to mergers and acquisitions. The healthcare sector is characterized by a high volume of mergers and acquisitions, regional expansions, and collaborations. They entail sharing substantial amounts of critical data related to contracts, terms of agreements, patient information, and provider and service information of all parties involved, raising the danger of cyberattacks.
Global regulatory affairs outsourcing market opportunities
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Growing demand for faster approval process for breakthrough drugs and devices
The FDA's drug approval procedures have undergone substantial adjustments over time. The 21st Century Cures Act, which was recently approved, is anticipated to quicken the FDA's approval procedure for specific pharmaceuticals and medical devices. The FDA has also introduced four programs to speed up the review of drugs for critical and life-threatening conditions: Breakthrough Therapy, Priority Review, Fast Track, and Accelerated Approval. The regulatory agencies typically approve the drugs covered by these schemes more quickly.
Additionally, it is hoped that the introduction of The Accelerated Access Collaborative, a government program to expedite patient access to potentially game-changing medications, will increase the availability and accessibility of innovative therapies in the UK. It is anticipated that these modifications to the approval procedures would spur innovation and raise the demand for regulatory service providers to know about recent changes to approval procedures worldwide.
Regional Analysis
The global regulatory affairs outsourcing market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.
Asia-pacific dominates the global market
Asia-Pacific is the most significant shareholder in the global regulatory affairs outsourcing market and is expected to grow at a CAGR of 10.1% during the forecast period. During the forecast period, the area is also anticipated to experience the fastest CAGR. This can be linked to the rise in clinical trials and the number of businesses attempting to penetrate developing nations like China and India. Another element anticipated to fuel the expansion of the regional market is the availability of skilled labor in the area at cheaper costs than in the United States.
North America is expected to grow at a CAGR of 9.00% during the forecast period. The North American regional market also reported a sizeable portion of the global industry. Some of the main factors influencing the market in North America include the presence of important pharmaceutical and medical device businesses and the increase in R&D spending in the area. North America and Europe are predicted to be the two main markets for regulatory affairs outsourcing due to the existence of two crucial international regulatory organizations, the European Medicines Agency (EMA) and the U.S. FDA, which supervise more than half of all medical devices internationally. It boasts a well-established and advanced healthcare infrastructure and many international biotech and pharmaceutical companies that carry out numerous clinical trials.
A critical development in the regulatory affairs outsourcing market is the development of effective software that keeps track of regulatory matters. Regulatory affairs outsourcing market leaders are concentrating on creating effective software that keeps track of regulatory affairs. Regulatory groups and departments can perform operations on regulatory data and documents in a compliant, effective, and intuitive way thanks to Freyr DMS, an end-to-end electronic regulatory document management solution introduced in 2019 by the global regulatory solutions and services company.
Europe is anticipated to surpass all other regions with the most significant CAGR throughout the forecast period due to healthcare requirements and government funding for scientific initiatives. Additionally, several biotech and pharmaceutical companies have started to outsource their drug production services to countries like France, Germany, and Italy, advancing the outsourcing sector of healthcare regulatory affairs. Additionally, ELC Group was purchased by ProductLife Group (PLG), a France-based company that offers regulatory services to the life science industry, in July 2021 for an undisclosed sum. PLG's acquisition is intended to broaden its operational reach and product portfolio in the global regulatory services market. The Czech Republic-based ELC Group is a provider of regulatory consulting services.
Segmental Analysis
The global regulatory affairs outsourcing market is segmented by service, company size, categories, product stage, indication, and end-user.
Based on service
The global market is bifurcated into regulatory consulting, regulatory writing and publishing, legal representation, product registration and clinical trial applications, and other services.
The regulatory consulting segment is the highest contributor to the market and is expected to grow at a CAGR of 8.7% during the forecast period. These services are provided from the initial stages of product development until the post-marketing authorization stage. Due to the large- and mid-sized biopharmaceutical and medical device firms' adoption of outsourcing these services, the category is also predicted to dominate the market during the projection period.
The legal representation services segment is anticipated to develop quickly over the forecast period. This is a result of the growing demand for legal counsel due to the globalization of the pharmaceutical and medical device industries. The laws are incredibly intricate and dynamic. As the regulatory landscape in Asia, the Middle East, and Latin America change, there is a growing need for local legal counsel to obtain regulatory clearances and custom clearance. These elements are raising the demand for legal services all around the world.
Based on company size
The global market is bifurcated into small, medium, and large.
The large segment owns the highest market share and is expected to grow at a CAGR of 9% during the forecast period. Large businesses prefer to build long-term relationships with their service providers to prevent sudden disruptions in their operations. As a result, they choose a service provider who can support their various cross-scale and ramp-up operations while also meeting their regulatory needs. In addition, according to a GEP (2020) report, large-scale pharmaceutical businesses often outsource roughly 50% of their regulatory affairs requirements.
The segment of medium-sized businesses accounted for the largest revenue share in 2021, and it is anticipated that it will continue to grow and hold the top spot throughout the forecast period. It is projected that the presence of multiple established mid-sized providers, mainly privately owned ones, will help to increase this sector share. Furthermore, the need for more resources among medium-sized pharmaceutical and medical device businesses to build an internal regulatory affairs team fuels the need for regulatory affairs outsourcing.
Based on categories
The global market is bifurcated into drugs, biologics, and medical devices.
The medical devices segment is the highest contributor to the market and is expected to grow at a CAGR of 8.8% during the forecast period. This is because manufacturers of medical devices are now outsourcing their non-core competencies to boost production and operational effectiveness. The segment's expansion is also aided by the rising demand for high-tech medical gadgets and new technological developments.
However, the biologics segment is anticipated to experience the expected CAGR during the anticipated period. Small molecule therapeutic R&D productivity is decreasing. Therefore attention is turning to biologics, which is predicted to increase in the future. Numerous pharmaceutical companies are developing novel biopharmaceutical products to stay current with industry developments and preserve their place in the global market. Additionally, biologic medications must adhere to intricate and stringent rules, fueling the segment's desire for regulatory outsourcing for biologics.
Based on the product stage
The global market is bifurcated into preclinical, clinical, and PMA.
The clinical segment owns the highest market share and is expected to grow at a CAGR of 9.2% during the forecast period. This is explained by the rise in registered clinical trial numbers over the past few years. Approximately 401,716 studies were registered on ClinicalTrials.gov in January 2022, compared to 325,834 by the end of 2019. In addition, the growing number of biologics, the high demand for cutting-edge technology, and the need for tailored orphan medications and medicines are different variables that are predicted to fuel segment growth over the forecast period.
The preclinical category is anticipated to increase at the quickest CAGR over the forecast period. The primary drivers of the expansion of the preclinical segment are the rising demand for innovative disease therapies for diseases like COVID-19, the Zika virus, and Ebola, as well as the increasing prevalence of already existing diseases, including CVDs, cancer, and neurological disorders. The need for regulatory affairs outsourcing agencies for preclinical studies is also being fueled by the strict regulations governing preclinical studies that have been established by international regulatory bodies like the International Conference on Harmonization (ICH), WHO, FDA, EMEA (Europe), PMDA (Japan), ANVISA (Brazil), MHRA (UK), & ROEB (Canada).
Based on indication
The global market is bifurcated into oncology, neurology, cardiology, immunology, and others.
The oncology segment is the highest contributor to the market and is expected to grow at a CAGR of 9.1% during the forecast period. Personalized medicine has been made possible by recent developments in the biology of cancer and the development of new techniques for genomic analysis. These developments have given oncology a clinical viewpoint. The number of customized medicine goods and services subject to regulatory scrutiny is growing due to scientific advancement.
The category for immunology is anticipated to increase at the fastest CAGR over the forecast period. This is because it can potentially make treating numerous inflammatory, neurological, oncological, and cardiovascular disorders easier. The immunology market's strategic measures are projected to help the segment flourish. For instance, Eli Lilly signed a contract to buy the immunology business of Dermira. Additionally, there was a critical demand for vaccines due to the COVID-19 epidemic. Therefore, segment growth is projected to benefit from the development of COVID-19 vaccines.
Based on end-user
The global market is bifurcated into medical device companies, biotechnology companies, and pharmaceutical companies.
The pharmaceutical companies segment owns the highest market share and is expected to grow at a CAGR of 8.9% during the forecast period. The category is expected to grow at the quickest CAGR while maintaining its dominant market position. This is because the demand for regulatory services is increasing due to rapidly expanding industries like biosimilars, orphan medications, and customized medicines, fueling the segment's expansion.
In 2021, the biotechnology and medical device sectors registered sizable market shares. This is explained by the rise in demand for biopharmaceuticals, vaccinations, cutting-edge medical equipment, etc. Recent pandemic outbreaks and the rising desire for wearable technology boost these categories' market shares.
