Analyst sees CROs claiming rising prices, more trial work

When you see a private equity group like Carlyle get involved in a $3.9 billion deal to take PPD private, you know some big money analysts see a hefty upside down the line. So Pharmalot's Ed Silverman went looking for some sensible context for the deal, and found it in a recent RW Baird survey on the CRO business.

Outsourcing clinical trials is nothing new, of course. But rising prices are. Some 42% of drugmakers report that prices went up in the second quarter, up from about a third in the first three months of the year.

"The vast majority of internal pharma staff surveyed believe that they are spending the same, or more, per unit of outsourced work today than in the recent past," notes Eric Coldwell, the Baird analyst responsible for crunching the numbers.

Pharmalot also reports that the CROs are looking for a 9% increase in the R&D budget for outsourced work. And total market penetration by CROs is expected to grow from 35% last year to 38% in 2011. All in all, it's the kind of upbeat assessment that gets the attention of the private equity crowd, which has been doing a number of CRO deals in the past year.

- here's the story from Pharmalot