Consumer awareness of the quality of goods purchased is good practice in any industry, but in biotech and pharma, it is a regulatory requirement. One of the most common goods we purchase in this industry is a vendor’s services — their time, effort, and resources. Whether it be a lab, CRO, or data management group, the FDA mandates we, as sponsor companies, know the quality of the goods and services we purchase from them.
The clinical CRO market is defined as the combination of Phases 1 through 4 clinical activities, excluding discovery, preclinical, central laboratory, and post-approval/commercialization services. Within the $34 billion to $39 billion CRO market, the clinical CRO market alone is valued at $25 billion as of 2017, with an expected CAGR growth rate of 7 percent until 2020 (Figure 1). Almost 80 percent of the global CRO market revenue comes from the clinical CRO market.
Earlier this year, three members of the U.S. House of Representatives introduced H.R.1234, the Domestic Research Enhancement Act of 2017. The partisan legislation would amend the Internal Revenue Code of 1986, enabling CROs to claim a portion of the Research & Development Tax Credit for qualified research conducted in the United States. Currently, pharmaceutical and biotech (sponsor) companies that outsource clinical research projects only claim 65 percent of the R&D tax credit.