Kansas City Collaboration To Help Region Compete in Healthcare Contract Research

The Kansas Bioscience Authority (KBA) has launched a collaborative partnership of more than 90 contract research organizations (CROs) to help the region compete in the pharmaceutical and medical device industries. BioResearch Central will help promote the Greater Kansas City region as a destination for pharmaceutical R&D at a time when drug companies are increasingly looking overseas for their contract research needs. The announcement follows the release of a KBA commissioned study that suggests pharmaceutical contract research is a $90-$105 billion industry in the U.S., much larger than previous estimates.

BioResearch Central will attempt to link the Kansas City region's CROs and related service providers to build a nationally-recognized research network, providing a wide spectrum of services for pharmaceutical and biotechnology companies. The CROs involved in the network provide a wide spectrum of research services, including drug discovery, toxicology, bioanalysis, clinical trials, and regulatory and commercial support. These companies currently generate almost $1 billion in annual revenue and employ more than 9,000 people in the Greater Kansas City region. The new network will help accelerate and improve the product development process by finding the right providers for specific research. It will also facilitate knowledge transfer and connections between the partner organizations.

Learn more about BioResearch Central...

Demand for outsourced research services has risen sharply in recent years as drug and device companies have curtailed their internal R&D spending. Over the past decade, the number of U.S. CROs has quadrupled, according to a 2011 study by the Tufts Center for the Study of Drug Development. More than 3,100 CROs were active in the U.S. at the end of last year. In 2010 for the first time, the number of R&D employees within these organizations surpassed the number of researchers within pharmaceutical companies.

The study commissioned this year by KBA, also conducted by the Tufts center, suggests that the industry is even more important than previously suspected. The $90-$105 billion figure is more than five times larger than many other industry estimates. Previous studies had focused on individual service areas instead of the full scope and variety of CROs. The Tufts study provides data not only by service area, but also on the industry as a whole. It also includes geographic data on the country's top fifteen metros by concentration of CROs.

Read Resizing the Global Contract R&D Services Market...

Despite the rapid growth of contract R&D, U.S. CROs face increasing competition from emerging markets in India, China, Brazil and Russia. A study released last year suggested that the worldwide market for clinical trials by CROs would grow by 50 percent by 2015. Global revenues are expected to top $32.7 billion that year and to exceed $65 billion in 2021, according to the report. Much of this growth, however, would happen overseas, with China experiencing more than 20 percent compound annual growth. At that rate, China would become China the second largest market for pharmaceutical clinical trial services by 2021. In many emerging markets, large, full-service CROs are edging out smaller organizations and signing multi-billion alliances with large pharmaceutical companies. They also often benefit from large, low-cost labor pools, large patient pools for clinical trials and less restrictive regulatory environments.

The growth of these large overseas CROs complicates the task of building a region where U.S. CROs can remain competitive. KBA's effort to create a region-wide network where CROs of all sizes can cooperate to satisfy the needs of research sponsors offers a strategy that might work.