DRIVER: Increasing R&D expenditure of pharmaceutical and biopharmaceutical companies

The pharmaceutical and biopharmaceutical sector is one of the biggest R&D spenders globally. In the last decade, the R&D expenditure of pharmaceutical and biopharmaceutical companies has risen considerably. This is expected to lead to a rise in the number of clinical trials conducted globally. According to the Pharmaceutical Research and Manufacturers of America (PhRMA), PhRMA members have invested significantly in drug development efforts. Companies in the market are actively looking to support R&D efforts. A further increase in R&D spending in the coming years will significantly boost drug discovery and development activities, thus driving the demand for clinical trial supplies.

Expected Revenue Surge by 2026:

The global Clinical Trial Supplies Market is projected to reach USD 2.9 billion by 2026 from USD 1.9 billion in 2021, at a CAGR of 8.5% during the forecast period of 2021 to 2026.

Global Industry Growth Boosters:

Clinical Trial Supplies Market growth is largely driven by the increasing R&D expenditure in pharmaceutical and biopharmaceutical companies and the growing number of clinical trials conducted globally. However, the increasing cost of drug development and clinical trials is expected to restrain the growth of this market during the forecast period.

RESTRAINTS: High cost of drug development

Drug discovery and development involve high costs due to the high attrition rate of drug candidates in development. Since R&D for some rare diseases is very challenging and requires a specific group of people to conduct a clinical trial, drug R&D processes can be prone to failure.

Only 7 out of 100 cancer drugs that reach the clinical testing phase end up gaining regulatory approval; most drugs fail long before this point. From drug discovery through FDA approval, developing a new medicine, on average, takes 10–15 years and costs USD 2.6 billion. Less than 12% of candidates that make it to Phase I clinical trials are approved by the FDA. This is a key factor limiting the growth of the market.

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OPPORTUNITY: R&D investments offer significant opportunities for the market

North America and Europe, traditionally the major hubs for clinical trials, are facing challenges in terms of trial costs and patient pools. Recent health reforms in the US, the patent expiry of blockbuster drugs, and the global economic slowdown have affected the profitability of pharmaceutical companies. This is compelling several pharmaceutical companies to look for opportunities in emerging countries across the APAC, such as India, Singapore, South Korea, and China, which offer advantages such as reduced costs and easy access to a large heterogeneous patient population.

Collaborations or expansions between companies in this market indicate that they are moving towards emerging markets to help their clients reduce the overall time consumed in clinical trials, thereby reducing their overall cost and resulting in the earlier launch of products in the market (post regulatory clearance). CROs can exploit these opportunities by supporting pharmaceutical companies to fulfill their needs for clinical trial supplies.

Recent Developments in Clinical Trial Supplies Market:

# In April 2021, Thermo Fisher announced plans to acquire PPD for USD 17.4 billion to enhance its offerings in clinical research services and to support clinical trials.

# In April 2021, Parexel collaborated with Veeva Systems to improve their clinical processes for clinical trial delivery and enhance Veeva’s cloud technology.

COVID-19 impact on the Clinical Trial Supplies Market

Coronavirus disease 2019 (COVID‐19) is an acute respiratory infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS‐CoV‐2). Largely unknown before the outbreak began in Wuhan (China) in December 2019, COVID-19 has moved from a regional crisis to a global pandemic in just a few weeks. The World Health Organization (WHO) declared COVID-19 as a pandemic on March 11, 2020. There has been a tremendous amount of effort put into developing new treatments and vaccines to cure the infection. Within a few weeks of research, companies started coming up with drugs and treatments to treat the infection.

Geographical Growth Dynamics:

The Asia Pacific region is the fastest-growing region of the clinical trial supplies market in 2020.

Based on the region, the clinical trial supplies market is broadly segmented into North America, Europe, the Asia Pacific, and the Rest of the World. The huge population base, presence of less stringent and harmonized regulatory frameworks, and limited competition make patient recruitment and seeking approval for clinical trials more convenient, less time-consuming, and cost-efficient in the APAC region. This is attracting the attention of a majority of pharmaceutical, biopharmaceutical, and biotechnology giants to consider conducting their clinical trials in APAC countries. The Asia Pacific market is projected to register the highest growth during the forecast period due to the presence of many emerging players, less-stringent regulations, and the ease and cost-effectiveness of patient recruitment in APAC countries.

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