This article from Outsourcing Pharma states that Big Pharma will increasingly look to outsource to CROs as it tries to reduce R&D expense. In doing so, it will consolidate and form strategic partnerships with a limited set of global CRO players.
The top seven CROs (includes Covance, PPD, Parexel, Charles River, Icon, Kendle and Quintiles) will have captured half the market by 2015 as big pharma, especially Pfizer, enters into these strategic deals. Pfizer will streamline its supplier network into functional service providers (FSP) and niche players. Pfizer terms this new model "performance partnerships" and will likely emerge with a short-list of 5 (or less) strategic vendor relationships.
Analysts say that "Within 5 years, and potentially much sooner, we could see over 80 percent of sponsors engaged in some sort of strategic relationship." In light of this, the CRO industry is expected to split into two groups -- large, global providers working in strategic relationships, and niche providers focused on one or two therapeutic areas.
Posted by Bruce Lehr April 20th 2011.