Clinical research organizations in the United States and Western Europe increasingly outsource to third parties. They are doing this to save money, but there is more to it as well. They are also trying to speed up research and testing processes and get products to market faster. This outsourcing, which often and increasingly goes to labs in Asia, is a new trend.
Pharmaceutical research companies also outsource to third party clinical research organizations so that they can focus on their core competencies. Many companies are better staffed for R&D than they are for clinical trials, whereas others are pharmaceutical sale powerhouses. Contract Research Organizations (CRO), as a clinical research organization is often called, rise in relative value as they seek to serve just a few global clients instead of diversifying into different areas. In the Asian Pacific region, large biopharmaceutical companies are more and more creating offshoots specializing in contracted clinical pharmaceutical research, as nations like China and India are hungry to make themselves safe, efficient, law-abiding havens for clinical research. Asian pharmaceutical companies are sending their clinical trial work there, and Western companies are following suit. One of the favorite clinical research havens for all concerned is Singapore, where they often grant approval for new clinical trials in as little as two to three months.
According to Frost & Sullivan Healthcare Industry research analyst Somya Datta, "The pharmaceutical outsourcing trend is expected to continue in the future. All processes including manufacturing, R&D, and clinical trials, will be outsourced in huge volumes. Large pharmaceuticals and biotechnology companies will be the main drivers for this market. The global aging, increasing life expectancy, changing disease epistemology, health awareness, and rise in disposable income will support the market growth."
Another factor favoring Asia within this trend is the fact that that continent is home to about 60% of the entire human population, one-third of which lives in India and China alone. These people, especially since their countries are still modernizing, are needy of and increasingly able to purchase pharmaceuticals. From a practical standpoint alone, it must be considered that the average clinical trial volunteer gathering site in India yields five times as many participants as those in the United States, with similar statistics found in China.
PWC also finds that the CRO market in China is being anticipated to generate a compound annual growth rate of 33% over the next five years, going to US $791 million by 2012. CRO will account for 2-3% of the global market for contract clinical organization research at that time.
Not everything about this trend is "negative" in the US, however. There are areas of America, as the economically hurt state of Michigan, where this outsourcing trend is poised to yield tremendous economic benefits.
With the city of Grand Rapids, Michigan's Medical Mile, being called "fertile ground" for bio-pharmacological growth by the Pharmaceutical Research and Manufacturers Association, or PhRMA, which is a Washington, D.C. industry research and think-tank, and with 35-corporation strong stretch of the city receiving ever more non-local businesses, and jobs in the industry, many good jobs, are being created.
"Grand Rapids is developing into a really nice hub for science...[it's a] hidden jewel. There is a lot of very powerful science there...it's just going to get bigger and bigger," says Paul Hawran, chief financial officer for San Diego-based Sequenom.
The Ann Arbor-based trade association MichBio has found, there are 550 bioscience companies in Michigan as of 2006, with 122 new ones that have come in since 2000. These companies generate 33,800 jobs, with an annual average salary of over $67,000. Certainly not all of these are specifically clinical research jobs, but Grand Rapids is creating an atmosphere where clinical research specialists can feel welcomed and thrive.
According to former Pfizer scientist Dave Zimmerman, CEO of Kalamazoo contract clinical research organization Kalexsyn Inc., "What you're seeing in the state is part of the revolution in the pharmaceutical sector...There is a growing recognition of the expertise Michigan provides."
