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Medical Discoveries are Contracted Out as Research Organizations Move Abroad

Medical devices companies are outsourcing more and more of their research and development processes, reducing costs and time by conducting overseas trials, according to healthcare experts GlobalData.



According to a new study* released by GlobalData, contract research organisations (CROs) are becoming increasingly popular with medical device companies keen to improve their financial and operational efficiency, as increasingly complex clinical trials are needed to meet the approval of regulatory bodies.

The US accounts for around half of the global medical devices CRO market, valued at $1.6 billion in 2011 with growth expected to take this up to $3.4 billion by 2018. The US dominates this market due to its favorable conditions for clinical research and the region's huge medical devices market, which fuels demand for CROs.

Most major industry players are based in the US, but have operations based all around the world. However, cost-containment pressures in the US have resulted in increasing outsourcing of clinical trials to overseas locations, leading to a boom in clinical activities in emerging regions such as India, China, Eastern Europe and Latin American countries.

A recent increase in the number of regional CROs, especially in the emerging markets of India and China, is due in part to the unique advantage of low-cost and regional regulatory expertise. Emerging economies within the Asia-Pacific region offer lucrative benefits such as easy access to patients and high patient retention rates which far outweigh the challenges involved in entering the market to conduct clinical trials. The increasing acceptance of such data from regulatory authorities in the US and Europe looks to encourage the CRO market in Asia over the coming years.

However, India, China and Brazil still struggle to offer positive regulatory experiences, and intellectual property (IP) protection is a major concern for CROs and medical device companies operating here. Issues such as regulatory approval policies are therefore being tackled by the governments of these countries, who are eager to welcome business from multinational medical corporations.

The global medical devices CRO market is expected to grow at a Compound Annual Growth Rate (CAGR) of 12.5% over the period 2011-2018, with revenue growing from $3.2 billion in 2011 to $7.4 billion by 2018.
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