Increasing Adoption Of Outsourced Services To Fuel The Life Sciences BPO Market Growth
The Life Sciences BPO Market enables pharmaceutical and biotech companies to outsource non-core business activities like clinical trials management, medical writing, database management, and finance & accounting services. Outsourcing such functions allows them to focus on core competencies like research and drug development.
The Life Sciences BPO market involves contract service organizations providing outsourced services like clinical trial management, data management, medical writing, regulatory affairs, pharmacovigilance, and other clinical and non-clinical services to life sciences companies on a contract basis. Outsourcing non-core functions allows life sciences companies to concentrate on core research activities while achieving operational efficiencies through cost reductions.
The Life Sciences BPO Market is estimated to be valued at US$ 222.9 Bn in 2023 and is expected to exhibit a CAGR of 14% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
The Life Sciences BPO market is driven by the trend of increasing adoption of outsourced services amongst pharmaceutical and biotech companies. As drug development becomes more complex, costly, and regulated, life sciences companies are increasingly outsourcing non-core functions to specialized BPO providers in order to streamline operations and focus internal resources on core drug research and development activities. This is enabling faster development of innovative new therapeutics to serve unmet medical needs. Specialized BPO providers also bring expertise across different functional areas and therapeutics which helps life sciences companies improve efficiency.
Porter’s Analysis
Threat of new entrants: The life sciences BPO market requires high upfront investments and expertise in conducting clinical trials, regulatory compliance, and data management. This poses a high barrier for new entrants.
Bargaining power of buyers: Large pharmaceutical companies have significant bargaining power over BPO service providers due to their high market share and demand volume.
Bargaining power of suppliers: Service providers have a significant level of bargaining power due to their specialized expertise required to manage complex clinical trials and data analysis processes.
Threat of new substitutes: There are limited product substitution threats as life sciences BPO services are specialized in nature.
Competitive rivalry: The market is moderately competitive with the presence of Accenture, Cognizant, IQVIA, and LabCorp as the major players.
SWOT Analysis
Strengths: Life sciences BPO providers have expertise in conducting clinical trials, regulatory filings, and data management services. Their capabilities across the drug development lifecycle are a key strength.
Weaknesses: BPO service providers often have low control over clinical trial timelines and outcomes which are dependent on pharmaceutical companies. Talent retention is also a challenge due to poaching from clients and competitors.
Opportunities: Growth in pharmaceutical R&D spending, rise of novel drug development modalities like cell and gene therapies, increasing adoption of eClinical solutions present lucrative opportunities.
Threats: Stringent regulatory norms and data privacy laws raise compliance challenges. Outsourcing threats from low-cost destinations like India, China, and Eastern Europe.
Key Takeaways
The global life sciences BPO market is expected to witness high growth, exhibiting a CAGR of 14% over the forecast period, due to increasing R&D investments by pharmaceutical companies and a surge in clinical trial activities. North America currently dominates the market, accounting for over 40% share due to presence of majority pharmaceutical companies and clinical research organizations in the region. The Asia Pacific region is poised to be the fastest-growing market during the forecast period, expanding at a CAGR of around 17%, owing to lower costs and a large patient pool.
Key players operating in the life sciences BPO market are Accenture, Plc., Boehringer Ingelheim GmbH, Charles River Laboratories International, Inc., Cognizant Technology Solutions, Covance, Inc., DSM, Fareva, ICON, Plc, Infosys, Catalent, Inc., Genpact Limited, Health Decisions, Inc., and ProMab Biotechnologies, Inc. Major players are focusing on partnerships, M&As, and enhancement of digital capabilities to gain higher market share.
