Pharmaceutical companies are increasingly outsourcing research activities to academic and private contract research organizations (CROs) as a strategy to stay competitive and flexible in a world of exponentially growing knowledge, increasingly sophisticated technologies and an unstable economic environment.
The R&D tasks that firms choose to outsource include a wide spectrum of activities from basic research to late-stage development: genetic engineering, target validation, assay development, hit exploration and lead optimization (hit candidates-as-a-service), safety and efficacy tests in animal models, and clinical trials involving humans.
According to a recent analytical report by Visiongain, drug discovery outsourcing will continue to grow over the next decade and will rise to a $43.7 billion dollar industry by 2026, as compared to an estimated 19.2 billion in 2016 (or $21.2 billion according to Kalorama Information). This is in line with Vantage’s fresh alliance benchmarking study, revealing that over 80% of bio-pharma respondents report increased alliance activity compared to five years ago. Getting ideas and expertise from external sources is a well-established practice in the pharmaceutical industry with about one-third of all drugs in the pipelines of the top ten pharmaceutical companies initially developed elsewhere, according to a 2014 WSJ article by Jonathan D. Rockoff.