What innovations are reshaping the pharma services sector?

BPR: What specific technologies do you think are transforming the pharma services market, and how do you expect these technologies to improve drug development efficiency and effectiveness?​

Artificial intelligence and machine learning are technological innovations that are reshaping the pharma services sector, in areas such as early drug development and medical writing in clinical trials. By expediting drug discovery through data-driven insights, these technologies can identify potential drug candidates and predict their efficiency, significantly reducing the time and cost of pre-clinical research. Additionally, data analytics is revolutionising patient stratification for personalised medicine and optimising clinical trial design, ultimately improving decision-making throughout the drug development process.

BPR: Why is the pharma services sector growing faster than other comparable sectors?​

The rapid growth of the pharma services sector is fueled by several key factors. Broadly, it is being driven by higher demand for pharmaceuticals, particularly due to an aging population, increasing life expectancy, and rising prevalence of chronic diseases. Additionally, it has faced tailwinds such as the increasing complexity of drug development and the emergence of new therapeutic modalities like gene and cell therapies, which require specialised expertise not always available in-house. A more stringent regulatory environment also necessitates the engagement of specialists in compliance and quality assurance, further driving outsourcing trends.

Big pharmaceutical companies are focusing on core competencies such as drug development and marketing, leading them to outsource non-core functions like clinical trials and manufacturing. Additionally, the growth of small and mid-sized biotech firms lacking the infrastructure and capacity to research, manufacture, and commercialise drugs fuels demand for outsourcing services to bridge these gaps.

BPR: As drug development becomes more complex and costly, many pharmaceutical companies are increasingly opting to outsource certain services. What types of services have you observed being outsourced more frequently in recent years?​

In recent years, pharmaceutical companies have increasingly outsourced critical functions to manage the complexity and cost of drug development. Clinical trial management and data analytics are among the most outsourced services due to their specialised requirements and global nature. Additionally, there has been a notable trend of increasing outsourcing of manufacturing, driven by big pharma divesting manufacturing capacity, particularly small molecule facilities.

Drug discovery outsourcing penetration is growing at a faster rate compared to early- and late-stage development outsourcing. This trend reflects the industry's shift towards leveraging external expertise for innovative research and early-stage validation.

BPR: Looking ahead, what do you foresee as major upcoming developments in the contract research market? Are there specific segments within this market that you predict will experience notable changes or expansion?​

Looking ahead to 2024 and 2025, the contract research market is poised for significant developments driven by increasing outsourcing in response to the complexity and cost of drug development. Within the contract research organisation space, further consolidation is anticipated, particularly in clinical site management organisations, with major platform assets expected to trade in the next twelve months.

Additionally, the adoption of AI tools is rapidly transforming drug development and medical writing segments within CROs, enhancing efficiency and accuracy. This technological integration is expected to streamline processes and boost productivity across the contract research market and medical writing segments of CRO.”