Virtual clinical trials market worth $8B as CROs rush to add decentralized capabilities

Clinical trials are going virtual at a rapid clip after the COVID-19 pandemic, and Medi-Tech Insights says the market is now worth nearly $8 billion.

The virtual trials industry is growing at a rate of more than 10% annually, according to Medi-Tech’s data, a figure that reflects the growing number of CROs announcing new partnerships, acquisitions and product offerings that help clients make clinical studies more accessible.

Remote monitoring, improved patient enrollment, apps to track patient engagement, telemedicine, decentralization and other measures have all helped the pharmaceutical industry keep trials rolling when the pandemic disrupted research on an unprecedented scale. While pharmas suddenly had to shift, CROs had to match the pivot with products and services to ease the transition.

AI technology has also helped synthesize data and speed up clinical trial processes, according to Medi-Tech.

Companies at the top of the virtual clinical trials boom are ICON, Parexel, IQVIA, Covance, Thermo Fisher, LEO Innovation Lab, Huma, Medidata, Oracle and many more. Parexel was bought out by EQT Private Equity and the U.S. giant Goldman Sachs Asset Management for $8.5 billion in July, marking a nice exit for Pamplona Capital, which had owned the CRO for the previous four years.

Thermo Fisher just rolled out a large expansion of its clinical lab space in the Richmond, Virginia, area after the acquisition of PPD in 2021. 

Meanwhile, venture capital interest in CROs has boomed. The industry saw just six deals in 2018, while 18 occurred in 2020. The bulk of that funding came in the third quarter of 2020, when there were a total of 10 deals involving venture capital. 

Medable is one of the biggest earners of VC cash, having brought in $524 million over several rounds since 2020, including a whopping $304 million series D in October 2021.

Venture capital can help CROs toward technological advancements and increasing customer and geographic reach, Medi-Tech said. 

That latter point has seen a flurry of interest from CROs seeking to expand to Europe and other regions to add to their customer bases. Examples include Veristat’s acquisition of SFL earlier this month; with that deal, Massachusetts-based Veristat gained expertise in orphan disease and oncology plus a nice leg up in the EU, U.K. and Swiss healthcare systems. Medable also added to its European offerings with the acquisition of LEO Innovation’s Denmark-Based Omhu in February. 

Nevertheless, the U.S. remains the biggest market for virtual clinical trials, while European life sciences and medical device companies have been slower on the uptake, Medi-Tech noted. But that’s not due to a lack of policy. The Trials@Home initiative in Europe launched in September 2019 to boost the use of digital tools in conducting clinical trials, just before the pandemic upended the world.