How CRO Model Revamps Life Sciences Operations

Driven by a growing readiness of life sciences companies to outsource a wider range of their tasks, CROs are looking to acquire high-impact service to expand their existing capabilities.

FREMONT, CA: Lifesciences companies are increasingly outsourcing their R&D activities, such as early-stage research programs, to contract research organizations (CROs) as a means to stay competitive, flexible, and profitable against all odds. Economically, there are factors like increasing downward pressure on drug pricing by governments and downturns in income due to the increasing competition.  From the innovation's perspective, there is a boom in life sciences, stimulating the emergence of new biological targets, therapeutic modalities, and even new areas of drug discovery, adding opportunities, complexity, and uncertainty. However, business models of collaboration between life sciences companies and CROs are evolving to meet the growing pharma companies' focus on external innovation and strategic partnerships. Know more here.

Some CROs often have their internal drug discovery activities and target licensing deals with big life sciences companies. For instance, there is a trend of artificial intelligence (AI)-driven startups in the industry, and according to recent data, 9 percent of them have their drug discovery pipelines. 

Whether an organization outsources entirely or keeps some work in-house, specialized outside contracts can manage workflow fluctuation, offer flexibility, and the option to scale rapidly if opportunities arise.

Another evolving trend is CRO researchers' insourcing onto sponsor company sites, particularly where the sponsor has unused laboratory space but does not plan new hires. This model can offer high visibility into the CRO's work, efficient management, capital efficiency, and potentially reduced costs. Another variation of this model is to have embedded sponsors within the CRO.

A significant trend in life sciences research outsourcing is the emergence of new types of marketplaces, which connect sponsors with CROs, academic institutions, and biotech startups through an advanced digital infrastructure. Research marketplaces allow sponsors to search for specific R&D service providers, engage in a transaction, manage projects, structure payment schedules, and automate the whole process of sourcing R&D services. Through these, CROs aim at evolving from commodity service providers to key strategic partners who provide integrated end-to-end solutions in drug discovery and development.