CROs and CMOs Have Cause to Celebrate

Annual survey shows strong growth for service providers and promises to continue into 2013. This article is part of a special issue on outsourcing.
Aug 01, 2012

The 2012 edition of the PharmSource–Pharmaceutical Technology Outsourcing Survey found a contract services industry that is enjoying better-than-expected business performance in 2012, fueled by increases in R&D spending at all levels of the bio/pharmaceutical industry. However, the survey, administered in June 2012, indicates that industry remains aggressive in seeking new business and is keenly aware of the risks that could change its fortunes.

Figure 1 How will your contract services spending change this year?
Bio/pharma respondents reported strong growth in their spending on contract services, with 62% reporting that spending in 2012 has increased over 2011, including 43% who said that spending has increased by 10% or more this year (see Figure 1). One-quarter of bio/pharma respondents indicated that spending on contract services has been flat for the year, while only 12% said their spending has been down.

Figure 2 What will business be like for your company this year?
Contract service providers clearly have been enjoying the 2012 spending boom. Among CRO and CMO respondents to the survey, 39% reported that business in 2012 will be "extremely good" or "very good," which is double the share of respondents reporting such robust performance in past years' surveys (see Figure 2). Only 5% indicated that business will be "not be very good," which is well below the 20%-plus who gave that answer in each of the previous three years.

Figure 3 Which client segment has been the best performing in your company this year?
All segments of the bio/pharma industry appear to be contributing to the strong performance (see Figure 3). Mid-size and specialty pharma, which has typically been the best performing of the major customer segments, have again been leading the way, with 25% of service provider respondents putting them first. However, the other major segments are close behind, with global and small bio/pharma companies each getting 20% of responses and generic-drug companies getting 18%.