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Are Small Firms Poised to Dominate CRO Market?

Business Editors

LONDON--(BUSINESS WIRE)--March 31, 2003

The number of contracts awarded to small contract research organisations (CROs) in the pharmaceutical industry has increased considerably over the past five years and looks set to continue rising, according to a report published in April's edition of the Good Clinical Practice Journal, a clinical trials magazine. Moreover, a growing number of smaller CROs are bidding for, and winning, higher value contracts - seemingly at the expense of their larger competitors.

Since 1997, more than 50% of all contracts have been won by smaller CROs, firms with an annual revenue of US$180 million or less. Since 1999, the gap between the average value of contracts awarded to big and smaller CROs has narrowed. As pharmaceutical companies outsource more of their operations, there is evidence to suggest smaller firms will command an even greater share of this growing market, says Dr. Suzanne Mattingly, vice president of marketing at Fast Track Systems. Her report draws on Fast Track's CROCAS PBT(R) database, which contains details of about a quarter of all CRO contracts awarded worldwide. She says the data support the results of a survey conducted three years ago by pharmaceutical industry observers CenterWatch, which found that 82% of drug firms planned to use smaller, specialised CROs.

"As the pharmaceutical industry experiences mounting pressure to move more drugs to market faster, its continued and effective use of CROs has become critical to getting compounds out of the lab and into clinical trials," Mattingly says. Smaller CROs are often in a position to offer lower prices, be more efficient, have more contact with their clients, have stricter operating procedures and tend to specialise more than their larger rivals, making them attractive to drug companies.

To manage the changing CRO market, sponsors need up-to-the-minute information on the state of the clinical research sector. "Consequently, industry data on CRO contracts awarded, changes in CRO fees, and outsourcing by therapeutic area are essential for pharmaceutical companies to predict and manage outsourced expenses and to identify costs for competitive bidding," she concludes.

ALSO IN THE REPORT

-- An overall increase in CRO fees of 5.3% between 2000 and 2001

-- Further evidence of the increase in clinical trials in Latin

America, Eastern Europe, South Africa and Australia

-- Clinical trials in certain therapeutic areas, such as

anti-infectives and pulmonary disease, are more likely to be

outsourced

NOTES FOR EDITORS

GCPj is the monthly, subscription magazine of choice for dedicated research professionals. It is published by PJB Publications, the leading publisher of information to the pharmaceutical industry and home of Scrip World Pharmaceutical News. PJB has offices in London, New York and Tokyo. For more information, please visit www.gcpj.com.

Fast Track Systems, a clinical development optimisation company, provides a data-driven systems approach to expedite clinical trial design, set-up and execution. Drawing on the industry's largest database of protocols, disease indications, and performance benchmarks, Fast Track is effecting system-wide change in clinical development with products and services that streamline and improve the trial process. For more information, please visit www.fast-track.com.
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Date:Mar 31, 2003
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