Introduction
Contract research organizations (CROs) are essential in pharmaceutical research and development (R&D). By geographical region, the global CRO services market in 2023 was dominated by North America. Growth factors for this market included the growing size of the pharmaceutical industry, the increasing number of clinical trials, substantial funds dedicated to pharma and biotech R&D, and the growing biosimilars and generics market. By revenue, the largest CRO in the US was Thermo Fisher Scientific Inc., with full-year revenue of US$23.04 billion in 2023 attributable to its laboratory products and biopharma services segment (53.8% of total revenue).
Leading Global CROs
To advance new therapies, pharma, biotech, and medical device sponsors engage CROs to help navigate the complex landscape of drug development and regulatory pathways and to manage clinical trials efficiently, ethically, and in compliance with good clinical practice (GCP) standards. The growing demand for CRO services is fueled by the high costs of in-house drug discovery and development, the increasing number of products in the development pipeline, tech advancements, and the growing focus on precision and personalized medicine. As a result, the global CRO market is estimated to grow at a compound annual growth rate (CAGR) of 9.6% from 2024 to reach US$129.8 billion by 2029. By type of service, clinical research services accounted for the lion’s share of the North American CRO services market, followed by early-phase development services, laboratory services, and consulting services.
Prominent players in the CRO services market include Thermo Fisher Scientific Inc. (US), IQVIA Inc. (US), Laboratory Corporation of America Holdings (Labcorp) (US), ICON Plc (Ireland), and WuXi AppTec (China). Recent and significant activities among these top CROs based in the US include the acquisition of Pharmaceutical Product Development (PPD), a global industry leader in clinical development and analytical services, by Thermo Fisher Scientific Inc. In October 2023, IQVIA initiated a strategic collaboration to support patients with rare autoimmune disorders through innovative pharmacovigilance (PV) safety solutions. In the same month, Labcorp announced the acquisition of selected operating assets of Baystate Health lab services throughout Massachusetts, US.
Largest CROs by Revenue
In a 2023 report by Statista, the largest CROs worldwide were Thermo Fisher Scientific Inc., Labcorp, IQVIA, ICON, and WuXi Clinical (based on 2022 annual revenue). Updated with recent company announcements of 2023 revenue figures, the largest CROs in the US are led by Thermo Fisher Scientific Inc. with US$23.04 billion (laboratory products and biopharma services segment), which represents 53.8% of its total revenue, IQVIA (US$14.98 billion), and Labcorp (US$12.16 billion).
Thermo Fisher Scientific Inc.
Based in Massachusetts, Thermo Fisher Scientific Inc. is a conglomerate of industry-leading brands, including Thermo Scientific (instruments, equipment, software, and services for analytical precision), Applied Biosystems (genomic solutions), Invitrogen (protein biology, molecular biology, and cell imaging and analysis), Fisher Scientific (providing access to a scientific marketplace), Unity Lab Services, Patheon (contract development and manufacturing organization (CDMO) and clinical trial services), and PPD.
Thermo Fisher Scientific Inc.’s services include supporting life sciences research, analytical solutions, and diagnostics or developing and manufacturing therapeutic interventions. According to Statista, Thermo Fisher Scientific’s acquisition of PPD, valued at approximately US$21 billion, was the largest merger and acquisition (M&A) deal involving CROs (as of May 2023). This acquisition has allowed the company to position itself as a global leader in clinical research services.
The PPD Journey
PPD began as a one-person consulting firm in 1985 and has since grown to be a leading global provider of clinical research services, conducting clinical trials in over 100 countries and supported by more than 35,000 employees worldwide. Throughout its journey, PPD has been committed to consistent quality and execution, customer-aligned service, and continuous innovation to accelerate clinical trial execution. In 2020, PPD successfully listed on Nasdaq and launched its initial public offering (IPO). In the same year, PPD announced plans to expand operations in China. By 2021, the number of PPD employees exceeded 30,000 globally, and Thermo Fisher Scientific Inc. completed its acquisition of PPD.
PPD serves pharma, biotech, medical device, and government entities as a strategic partner in clinical development and analytical services. The PPD promise to its customers is focused on using patient-centered strategies and data analytics, applying advanced technologies, PPD’s expertise in multiple therapeutic areas, innovative approaches to patient recruitment and clinical sites, and comprehensive lab services.
Recent advancements
In February 2024, PPD announced the addition of mycoplasma and biosafety testing capabilities to its good manufacturing practices (GMP) lab in Wisconsin, US. This expanded capability ensures biopharma products are free of contaminants, helping PPD customers deliver medicines safe for patients. Existing lab services include bioanalytical, biomarker, and vaccine sciences labs in Virginia; a GMP lab in Ireland; central labs and biomarker operations in Belgium, Kentucky, and Singapore; and bioanalytical, biomarker, vaccine sciences, and central labs in China.
At the end of 2023, Thermo Fisher Scientific Inc. launched a PV platform for clinical research registries. This cloud-based data lake platform optimizes PV case processing and safety data management processes. The platform builds and scales clinical registries across therapeutic areas to gather structured patient clinical data – covering 400 investigators sites and over 100,000 patients. It ensures regulatory compliance for over 15 long-term post-authorization safety studies across eight disease indications.
For the fourth consecutive year, PPD, as Thermo Fisher Scientific’s clinical research business, was recognized as the 2023 PharmaTimes Clinical Research Company of the Year. Over 20 PPD research professionals, including clinical research associates (CRAs), won various team and individual competition categories.
Drawbacks & Limitations
Large CROs such as PPD are incentivized to prioritize profits at the expense of the clinical research and clinical trials they conduct. Misaligned incentives with sponsors may result in unnecessary burdens, e.g., subpar trial design, data collection, and analysis, which undermine the quality of research. A 2022 survey by McKinsey found that emerging biotech companies are less satisfied with their CROs than large pharma companies and reported the feeling of being underserved. The study identified areas in large CROs that need improvement, including the prevailing lack of engagement with sponsor C-suite and the absence of relationship-building with founders and CEOs that would help establish themselves as end-to-end strategic partners. Attention to emerging biopharma companies is vital as they are increasingly responsible for a larger share of the R&D pipeline.
At the time PPD was acquired by Thermo Fisher Scientific Inc., several potential risks were highlighted in forward-looking statements, including factors impeding relationships with employees, customers, other business partners, or governmental entities (in line with the issues described above) and difficulties in retaining key employees. In complex trials, sponsors need a CRO team with expertise at all levels who stay from the start of a trial to its completion. Personnel changes may result in extended timelines and dissatisfaction at research sites. Smaller CROs tend to have a much lower turnover compared to large CROs, providing the stability sponsors need.
The Vial CRO
Small CROs like Vial offer a high degree of specialization in specific disease areas and geographic focus. To remain competitive and offer clients a full range of value-added solutions, small CROs keep current on the latest technologies, techniques, and tools in clinical research. In addition, Vial can offer more flexibility for customization and provide undivided attention through a partner-like model.
Vial is a tech-first CRO delivering faster, better, and more affordable clinical trial results for biotech sponsors. Get in touch to learn how to work together on your next clinical trial.
