Mumbai, India, 17 August 2012 - A large, easy-to-access, treatment-naive population; high degree of available cost arbitrage of up to 30-50 percent over U.S. and an improved regulatory environment is driving the Indian clinical research organization (CRO) market forward. The market is growing at a rate of 11-13 per cent as the country builds its track record and gains increasing favour as a base for global clinical trials (phase I-IV).
New analysis from Frost & Sullivan (http://www.pharma.frost.com), Strategic Analysis of the Clinical Research Organization Market in India, finds that the CRO market in India earned revenues of $485 million in 2010-11 and estimates this to cross $1.0 billion in 2016.
The participants operating in the Indian segment include multinational CROs that still dominate the nation's market, Indian CROs, multinational pharmaceutical companies, and Indian pharmaceutical companies. While the first three categories of companies are into global trials, Indian pharmaceutical companies usually look at conducting local trials.
"Therapeutic areas in which research can be conducted in India are varied, and this is likely to result in more number of studies in the country," said Frost & Sullivan Research Analyst. "Emerging areas, such as diagnostic research, are also expected to drive the India CRO market."
Market growth is further bolstered by the Indian Government's (the Drug Controller General of India or DCGI) efforts to create a favourable environment for clinical trials. The improved regulatory environment possessing stringent enforcement laws will also bring more credibility to trials in India.
However, increasing competition, quality concerns and lack of quality infrastructure in smaller tier II sites are some factors that impede the growth rate of the CRO market.
"Reliability and consumer confidence in Indian clinical trials data is lacking, greatly impacting the CRO market," elaborated the analyst. "This is the result of a number of small-scale CROs having compromised on the standard of their studies in their bid to compete."
As more established CROs continue to grow, with reliable data and well-established clientele, the impact of this restraint is expected to diminish. The market will also be supported by India's attractiveness as a small base with low costs, high-standard practices, and growing interest from multinationals to include the country as a preferred clinical trials site for their studies.
"Developing a single-window clearance for clinical trials as well as clear guidelines on the types of international/global trials that can be performed on the Indian population will shore up CRO market growth," noted the analyst. "Indian CROs should focus on developing a steep learning curve by collaborating with selected international CROs and merge their talents."
Overall, market participants need to balance regulatory issues, breadth of services and data quality with cost competitiveness, a bigger footprint and innovation to grow their market share.
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