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Global Clinical Research Services Market
A branch of health care science…
Global Clinical Research Services Market
- A branch of health care science
- Scholars explore, understand and analyze the safety and efficacy of clinical devices, medications, diagnostic products and treatement regimens.
SUPPLIER ANALYSIS
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Supplier cost break up: The overall cost of the clinical research service industry is going to increase predominantly due to increasing spend on administrative staff and clinical research procedure
Profit margin:
The profit margin of the global supplier is 25%-28% in 2016, which is much more than a regional supplier, due to their global presence and experience/expertise they possess in the category of clinical research.
Indicative cost structure:
The administrative staff cost accounted for the maximum cost share and is projected to increase by 3%-4% during the forecast period.
Supplier positioning matrix: The service provider positioning matrix classifies global clinical research suppliers into industry leaders, contenders, challengers and niche suppliers based on the comprehensiveness of service portfolio, geographical reach, clients, and experience.
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Top 5 Suppliers
1. QUINTILESIMS
KEY SERVICES
- Pharmaceutical consulting
- Client trial services
- Data management
- Medical device and diagnostics
2. PARAXEL INTERNATIONAL
KEY SRVICES
- Clinical trial management
- Medical writing
- Biostatistics
- Regulatory consulting
3.COVANCE
KEY SERVICES
- Analyses services
- Consulting and partnering
- Clinical development
4. PHARMACEUTICAL PRODUCT DEVELOPMENT
KEY SERVICES
- PPD labs
- PPD biotech
- Functional service partnership
5. ICON
KEY SERVICES
- Central lab
- Adaptive trials
- Early phase drug discovery
CATEGORY SOURCING EVOLUTION MATRIX: Category managers are looking for customized solutions for their drug and medical device development process, which provides solution for treatments and diseases in the market.
Genearlized: This quadrant correlates to services offered by multiple suppliers pertaining to the category. There is a lack of differentiation in most services offered by these suppliers.
Tailored: Each buyer engages with a set of select or go to suppliers to fulfill category requirements. This leads to a certain degree of differentiation in services.
Proprietary: Buyers utilize patented or copyright products or content of suppliers to meet category requirements
Customized: It is based on one to one relationships between buyers and suppliers. involves offering that are designed by suppliers based on specifications provided by buyers themselves.
PORTERS FIVE FORCES
BARGAINING POWER OF BUYERS:MODERATE
- Because the clinical research services market is relatively fragmented
- Switching cost for buyer is moderate within the clinical research market due to increased management complexity involved in changing suppliers in the market
BARGAINING POWER OF SUPPLIERS:HIGH
- The supplier market is relatively fragmented due to the presence of several local suppliers and suppliers have an advantage of low switching cost
THREAT OF SUBSTITUTES :LOW
- Because the CROs possess the capabilities such as expertise and knowledge which provides an easy and fast development process when compared with conducting trial-in -house
THREAT OF NEW ENTRANTS:MODERATE
- Because market is relatively fragmented and there is increased demand for clinical research services
THREAT OF RIVALRY:HIGH
- Because the market has no major players that have large market share.
TECHNOLOGICAL TRENDS
- Increased use of ePRO platforms: ePRO is a patient reported outcome collected through electronic methods that undergo the linguistic validation process. The use of ePRO was primarily required for improving compliance via use of reminders, alarms and dates, improving data quality
- Covance, Praxel international, Quintiles
- Growing momentum of eSource: eSource refers to data recorded in an electronic format that has been obtained from a study that can be obtained directly into an eCRF
- inVentive Health, Paraxel International, Quintiles
- Increased use of eTMF: It is trial master file that is developed in an electronic format that allows organizing and storing of images, documents, and other digital content for pharmaceutical clinical trials .
- Use of RBM to reduce risk : Risk based monitoring focuses on preventing and mitigating the risk of data quality to ensure the safety of human subject during the trial
- Quintiles, Parexel International, Chiltern
- Use of mobile based application: The emergence of mobile health technologies has the potential to maintain a patient- centric trial design through participant engagement and real time data collection
- Quintiles IMS, PAREXEL International, Pharmaceutical
MARKET ANALYSIS
SWOT ANALYSIS
STRENGTHS
- Buyers in co-ordination with CRO have the strength to actively participate in pharmacovigilance
- The knowledge, expertise and well built infrastructural capabilities
WEAKNESSES
- Staff is reluctant to contribute to clinical trial research processes
- Unwillingness to participate in the clinical trials
OPPORTUNITIES
- Service providers prefer to expand the operations in emerging countries such as India, China, Brazil and south East Asia.
- Service providers are collaborating with academic institutions and health care facilities
THREATS
- Limited availability of well trained personnel across regions such as APAC and MEA
- Regulatory barriers
KEY MARKET TRENDS
The global clinical research services market is fragmented due to the presence of both global and regional players #
Increased adoption of electronic health records: The clinical research industry involves abundant storage of paper records related to drug application and clinical trials. Therefore, buyers prefer maintaining electronic records for the convenience of searching and analyzing of data.
- Cost: increasing
- Complexity: Declining
Growing preference for outsourcing of clinical research to CROs: Buyers prefer to outsource their clinical research activities to CROs due to the high cost associated with drug development and clinical trial.
- Cost: Declining
- Complexity: Declining
Preference for offshoring to low- cost regions :Buyers prefer to offshore clinical research projects to low cost countries such as India and China due to low labor cost and opportunity to conduct more clinical trials.
- Cost:Declining
- Complexity: Declining
Category maturity by regions:
The parameters shown horizontally takes into account various sub factors also like political stability, level of adoption of innovations, taxation policies, level of investments on R&Detc.
PESTEL ANALYSIS
Political: Political decisions may have a direct impact on CRO activities. For instance, reduced govt. funding results in fewer grants that leads to reduced investments within CROs
Economic: The slow economic growth in the US and european market have encouraged service providers to focus on emerging countries for alternate sources of revenue.
Social: Service providers focus on employee wellness program across all regions to promote sustainable workplace and assurance of employee health and safety.
Technology: Service providers are leveraging on technologies such as EDC, RDM, eTMF, cloud computation and mobile based application.
Legislative: Service providers must comply to regulatory framework set by the government across regions.
Environmental: CRO service providers must adhere to environmental standards set by govt across regions.
COST SAVING OPPORTUNITIES . : Buyers prefer to negotiate with service providers based on the volume and duration of contracts, buyers also look at parameters, such as adoption of advanced technologies by service providers.
TACTICAL
- Adoption of negotiation strategies: Buyers can negotiate with clinical research service providers in terms of volume based services provided
- Adoption of technology
- IVR provides real time data tracking for patient registration, electronic patient diaries and clinical trial management
- EDC for collecting data electronically and managing it in real time
- Cloud computing technology for ease of data storage and accessibility
- Electronic Patient Diary that registers the patient information in the storage device and automatically monitors data during the time of entry
- Supplier competition: Service providers are evaluated on the basis of services offered such as clinical trial planning, design of protocol, stages of development process, research on medical device and diagnosis.
STRATEGIC
- Optimization of procurement practices
- Contract model- Long term contracts
- Pricing models- Fixed price
- Procurement model- Center led
- Sourcing model- Global sourcing
2.Bundling of services: Buyers partner with service providers that allow bundling of clinical research services with other services such as advisory services, health management and risk management.
CHALLENGES
- Shrinking of clinical research workforce*
- Issues with administrative and regulatory requirements across regions
- Difficulty in recruitment and retention of patients for clinical trials
- Inadequate experience of suppliers and infrastructural facilities in emerging markets
BECAUSE*
- Limited Resource Availability
Though markets of the US and Europe have >22% turnover rates for clinical/scientific staff, the emerging markets of Japan and China have limited number of qualified employees. This in turn causes a supply crunch, slowing down the staffing market.
- Local regulations
Stringent regulations to conduct trials in certain emerging markets has restricted suppliers to provide resourcing solutions in these markets.
DRIVERS
- Rising biopharmaceutical R&D expenditures
- Growing demand for drug therapies in emerging markets
- Technological advancement and demand for innovative solutions.
- Need for capabilities to provide faster market launch
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