Outsourcing in Drug Development: The Contract CRO, Clinical Trial Lab and EDC Market

The cost and time of developing and bringing a drug to market is over $1.3 billion and often takes as long as 15 years, if not longer. Because of this, major pharmaceutical marketers continue to outsource stages of development, and over the years Kalorama Information has observed this process. In past editions of our outsourcing market studies, we found that outsourcing moved from "should" to "must." for manufacturers. This trend has only continued in the past two years.


Contract Research Organizations (CROs) and other entities can expect growing demand for their services. The demand for new drugs remains unabated, but the cost and need to bring those drugs to market is ever-increasing and intensifying. A key cost driver is the large number of failures during the expensive clinical trial phases. Driven by pressures to reduce costs, companies are increasingly implementing outsourcing strategies to increase revenues through faster drug development. By decreasing their in-house facilities and staff, and outsourcing more of their R&D functions, pharmaceutical and biotechnology companies are reshaping the drug development services industry.


Kalorama Information's Outsourcing in Drug Development: The Contract Research (Clinical Trial) Market is the third edition of this study of the drivers for outsourcing drug development, the companies involved in this market and the opportunity for revenues.

As part of its comprehensive coverage of this market, this report contains:

• A Detailed Introduction to the Clinical Trial Process


• Statistics of Drugs in Development by Phase


• Market Size and Forecasts for Outsourcing In Drug Development by Academic Medical Center (AMC), Contract Research Organizations and Others.


• Main Drivers for Outsourcing in Drug Development


• How CROs are Meeting the Challenge of Patient Recruitment


• Discussion of Industry and Regulatory TrendsProtocols Funded in FY2009 by Percent and Gender


• Global R&D Expenditures Outsourced by Percent 2003-2010


• Selected Pharmaceutical Company Acquisitions, 2009-2011


• Top Ten Therapeutic Categories in R&D


• Selected Acquisitions of Leading CROs


• Increasing role of EDCs


• Globalization Trends in Drug Development and Breakout of Clinical Trials by Region


• Directory of Companies


• Market Share of Major CROs 2011


• Profiles of CROs, Contract Laboratories, Clinical Trial Labs and EDC Solution Companies

Global Drug Discovery And Development Industry

CHAPTER ONE: EXECUTIVE SUMMARY

The Drug Development Process

Government Regulation of Clinical Research

Active Phase I, II & III Clinical Trials

Phase IV Studies: Post Approval

Recruiting for Clinical Trials

The Complexity and Costs Of Clinical Trials Are Increasing

Clinical Trials Worldwide

The Contract Drug Development Industry

R&D Outsourced to Contract Drug Development

Contract Drug Development Market

Trends Affecting Growth of Contract Drug Development Industry

Globalization of Drug Development

Rapid Technological Change Increasing Data

Biotechnology Industry Growth

Increased Regulatory Scrutiny

Need for Fast, Efficient, and Cost-Effective Drug Development

Drug Development Process

CHAPTER TWO: INTRODUCTION

Government Regulation of Clinical Research

Center for Biological Evaluation and Review

Center for Drug Evaluation and Research

Investigational Review Board

Preclinical Research

In Vitro and In Vivo Testing Process

Investigational New Drug Application

Clinical Trials

Preclinical Phase

Phase I

Phase IIa

Phase IIb

Phase III

Phase III

Phase IIIa

Phase IIIb

Phase IV: Post Approval

New Drug Applications

New Molecular Entities and Approval Times

Accelerated Approval

Has FDA’s PDUFA ACT Weakened Safety Standards?

Government Initiatives to Improve Research and the Review Process

FDA’s Critical Path Report

Exploratory IND Studies—An Approach to Complying with CGMP

INDs—Approaches to Complying with CGMP During Phase 1

Biotechnology Industry Endorses FDA’s Critical Path

Globalization Trends in Drug Development

Clinical Trials Worldwide

China is Ranked First

India's Growing Market

Russia Dominates Eastern Europe

CHAPTER THREE: CLINICAL TRIAL OPERATIONS

Conducting Clinical Trails

Government Sponsored Clinical Trials

Organizations Contracted to Conduct Clinical Trials

Contract Research Organizations (CROs)

Managed Site Networks

Major Elements of Clinical Trials

Protocol

Eligibility Criteria

Endpoints

Randomization

Stratification

Blinding

Data Collection and Management Tools

Statistical Interpretation

Data Collection and Management Tools

Statistical Interpretation

Phase IV Studies

Post Approval Studies

Sentinel Initiative

Recruiting for clinical Trials

Clinical Trials Recruitment Promotion

Internet-Enabled Recruitment

Recruiting Principal Investigators

Physician as Principal Investigator

Recruiting Patients

Use of Homecare Services

Patient Recruitment Outside the U.S.

Delays in Patient Recruiting Increases Project Costs

Factors Influencing Participation in Clinical Trials

Increasing Complexity of Clinical Trials

Informed Consent Process

Demographics and Clinical Trials

Ethnicity and Gender in Clinical Trials

Electronic Data Management

Traditional Paper-based Case Report Forms

Advantages of EDC

Current Assessment of EDC Adoption

Need for an EDC Standard

FDA Releases Guidance for Using Computerized Systems for Clinical investigations

Electronic Patient Diaries

CHAPTER FOUR: TRENDS

Drug Development Costs

Outsourcing Drug Development

A Brief History of Contract Research Outsourcing

Focus Shifts in Outsourced Clinical Research Operations from Phase II-III to Phase I to IIIb/IV

Major Factors Driving Contract Research Outsourcing Strategy

Outsourcing as a Cost Reduction Strategy

Number of New Chemical Entities (NCEs) in Pipeline Increasing

Growing Complexity of Regulatory Requirements

Outsourcing to Gain Rapid Access to Patient Recruiting

Contract Research Competitors

Academic Medical Centers (AMCs)

Competing Factors

Contract Research Organizations (CROs)

CRO Contracts

Competing Factors

Managed Site Networks

Competing Factors

Clinical Trial Laboratories

Competing Factors

Clinical Trials as a Business Opportunity

Community Physicians

Electronic Technology Solutions

Internet Patient/Investigator Recruiting

Clinical Trials Packaging

Effective Packaging Promotes Patient Compliance

CHAPTER FIVE: MARKETS

R&D Spending Increasing

Leading Pharmaceutical Developers

Clinical Research Products in Development

Shift in Spending for Clinical Research

Spending for Phase I Trials Slows from Highs in 2004

Safety Issues Drive Phase IIIb/IV Trial Spending

Contract Drug Research Market

Contract Research Competitors

CROs Market Share

CROs Broaden Services through Acquisitions

CROs Expanding Laboratory Services

AMC Market Share

AMCs Reassess Role in Industry-funded Clinical Research

Academic Clinical Reseach Organizations Expanding

Niche Competitors’ Market Share

Clinical Trial Laboratory Services

EDC Services Gaining Market Share

Managed Site Networks

Trends Affecting Growth in Contract Drug Development Industry

Globalization of Drug Development

Rapid Technological Change Increasing Data

Biotechnology Industry Growth

Increased Regulatory Scrutiny

Need for Fast, Efficient, and Cost-Effective Drug Development

CHAPTER SIX: COMPANY PROFILES

Charles River Laboratories International, Inc.

Covance, Inc.

Encorium Group, Inc.

Icon, Plc

Kendle International, Inc.

MDS Pharma Services

Omnicare Clinical Research

Paraxel International Corporation

Pharmanet Development Inc.

Pharmaceutical Product Development, Inc.

PRA Internation, Inc.

Radiant Development

Bioanalytical Research Corporation

Calvert Laboratories, Inc.

CRL Medinet, Inc.

Kronos Science Laboratories, Inc.

Lab Corp

Medtox Scientific Inc.

Pacific Biometric, Inc.

PRL Central Laboratory Services

Quest Diagnostics, inc.

TGA Sciences, Inc.

CNS Clinical Trials

DaVita Clinical Research

SMO-USA, Inc.

Synarc, Inc.

Advanced Clinical Software

eTrials Worldwide, Inc.

Interactive Clinical Technologies, Inc.

Medidata Solutions Worldwide

Perceptive Informatiocs

Pharsight Corporation

APPENDIX: COMPANY DIRECTORY

Table of Exhibits

CHAPTER ONE: EXECUTIVE SUMMARY

Exhibit 1-1: The U.S. Drug Discovery, Development, and Approval Process

Exhibit 1-2: Number of Active Clinical Drug Development Programs (May 11, 2007)

Exhibit 1-3: Total Average Number of Active Clinical Drug Development Programs, 2001-2007

Exhibit 1-4: Change in Protocol Eligibility Criteria, Comparison of 1999-2000 and 2003-2006

Exhibit 1-5: Worldwide Clinical Trial Sites, by Region and Percent, (as of 7/12/2008)

Exhibit 1-6: Portion of Global R&D Expenditures Outsourced: 2003-2008 by percent

Exhibit 1-7: Contract Drug Development Market Share, Percent by Competitor Type (AMC, CRO’s Others), 2007

Exhibit 1-8: Contract Research Market, 2002-2012

CHAPTER TWO: INTRODUCTION

Exhibit 2-1: Investigational New Drug Submissions, 1992-2006

Exhibit 2-2: Investigational New Drug Submissions, 1986-2008

Exhibit 2-3: Number of Clinical Trials Initiated Annually for U.S. Submissions

Exhibit 2-4: Median Total Approval Time for Standard NDAs,1993-2006

Exhibit 2-5: Median Total Approval Time for Priority NDAs,1993-2004

Exhibit 2-6: Median Total Approval Time for Standard NMEs, 1995-2004

Exhibit 2-7: Median Total Approval time for Priority NMEs, 1995-2004

Exhibit 2-8: U.S. NMEs 2006 Approvals: Review Times by Drug

Exhibit 2-10: Median Approval times for Safety vs All Drugs, By Decade

Exhibit 2-11: Number and Location of Clinical Trial Sites Worldwide, as of 7/12/2008

Exhibit 2-12: Worldwide Clinical Trial Sites, by Region and Percent, as of 7/12/2008

CHAPTER THREE:CLINICAL TRIAL OPERATIONS

Exhibit 3-1: Key Clinical Trial Enrollment Statistics for: NMEs Approved in 2000-2006

Exhibit 3-2: Number of Active Clinical Drug Development Programs (May 11, 2007)

Exhibit 3-3: Total Average Number of Active Clinical Drug Development Programs, 2001-2007

Exhibit 3-4: Summary Of Postmarketing Study Commitments (Numbers as of September 30, 2007)

Exhibit 3-5: Benefits and Risks of Participating in Clinical Trials

Exhibit 3-6: Change in Protocol Eligibility Criteria, Comparison of 1999-2000 and 2003-2006

Exhibit 3-7: Aggregate Enrollment Data for All Extramural and Intramural Research Protocols Funded in FY2005 and Reported in FY2006, by Percent and Gender

CHAPTER FOUR: TRENDS

Exhibit 4-1: New Paradigm for R&D

Exhibit 4-2: Improvements in the Drug Development Process Reduce Development Costs

Exhibit 4-3: Portion of Global R&D Expenditures Outsourced: 2003-2008 by percent

Exhibit 4-4: Percentage of Industry-Sponsored Clinical Trials Awarded to Academic Medical Centers Versus Private Sector Companies: 1991, 1996,2001 and 2006

CHAPTER FIVE: MARKETS

Exhibit 5-1: Global Drug Development Spending, 2002-2012

Exhibit 5-2: Global Drug Development Spending, 2002-2012

Exhibit 5-3: R&D Expenditures of Leading Pharmaceutical Developers, 2006 vs. 2005

Exhibit 5-4: Number of Companies with Active Product Development Projects, 1997-2006

Exhibit 5-5: Total Average Number of Active Phase I-III Clinical Trials Worldwide, 2001-2007

Exhibit 5-6: Top Ten Therapeutic Categories in R&D Worldwide, March 2007

Exhibit 5-7: A Comparison of Spending Rates in Phase I and Phase II/III Trials, 2004-2008

Exhibit 5-8: Clinical Trials Phase IIIb/IV Market 2004-2008 (in U.S. billions)

Exhibit 5-9: Global R&D Spending and Portion Outsourced to Contract Research, 2002-2012 (in US Billions)

Exhibit 5-10: Contract Drug Development Market, 2002-2012 (Outsourced to CROs, Others)

Exhibit 5-11 Contract Drug Development Market Share, Percent by Competitor Type (AMCs, CROs, Others), 2007

Exhibit 5-12: Contract Research Market (CRO, AMC, Other)

Exhibit 5-13: CRO Market Share, 2007

Exhibit 5-14: Selected Acquisitions of Leading CROs, 2006 to present

Exhibit 5-15: Market Share of Niche Participants in Contract Drug Development, 2007 (MSN, EDC, nonCRO Labs)