From Advertisement: Contract Research Organizations (CROs) Market to 2018

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Contract Research Organizations (CROs) Market to 2018

Increase in R&D Costs Compared to Revenue Growth a Reason for Outsourcing Clinical Trials to Contract Research Organizations The R&D productivity of top pharmaceutical companies has been declining in recent years as Food and Drug Administration (FDA) regulations surrounding the approval of new drugs become more stringent. This will significantly affect pharmaceutical companies' revenue generation. Many patents are set to expire in 2012 - 2018, which will further reduce revenue and erode profits. As a result, companies are making huge efforts to reduce R&D expenditure and increase profitability. Outsourcing clinical trial activities to Contract Research Organizations (CROs), particularly in the developing nations, is rapidly gaining acceptance in the industry. R&D expenditure for the 10 largest pharmaceutical companies increased at a Compound Annual Growth Rate (CAGR) of 8.3% for the period 2004 - 2010 compared to a revenue turnover of 6.5%. The collective R&D expenditure for the top 10 companies stood at $42.1 billion in 2004, which increased to more than $67 billion in 2010. Revenue turnover increased from $293 billion in 2004 to $428 billion in 2010.