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Contract Research Organizations Reality
There are numerous reasons that can explicate the fact that contract research organizations or CROs have become so popular of late in the conduct of clinical trials. Some of these pertain to basic financial necessities. The prices of materials used in clinical trials and in the pharmaceutical business in general are increasing. According to Forbes (2011), "A survey by RW Baird analyst Eric Coldwell found 42% of this year's drugmakers say prices rose in this year's second quarter, up from one-third in the first quarter." Thus, because the basic materials involved in testing for pharmaceuticals has increased, outsourcing this process has become a much more viable option for those looking to conduct clinical trials.
Additionally, it is critical to note that in certain instances organizations are cutting back on their expenses. Such a statement certainly applies to pivotal aspects of research and development. In fact, there are several companies that have experienced the scenario when their budgets for research and development have "flattened" (Silverman, 2011). As such, outsourcing becomes an attractive possibility for the simple fact that companies do not need to maintain their own facilities for this process. Instead, they can simply leverage those of others ("drugmakers") (Silverman, 2013) when they need to, which means that R&D is not the constant expense that it is when one is performing these activities in-house.
Still, there are some noteworthy drawbacks of utilizing CROs. In doing so, a company is revealing its own formulas and intellectual property to another, quite possibly before it is patented. Thus, there is a higher propensity for increased competition and the loss of potentially sensitive organizational data. Furthermore, companies have to deal with the ramifications of having a third-party aware of its research and product development process, which is not always advantageous. Nonetheless, many companies find this option worthwhile.
References
Silverman, E. (2011). Why contract research organizations are so hot. Forbes. Retrieved from http://www.forbes.com/sites/edsilverman/2011/10/04/why-contract-research-organizations-are-so-hot/
Silverman, E. (2013). What contract research organizations are doing to keep employees. Forbes. Retrieved from http://www.forbes.com/sites/edsilverman/2013/08/19/what-contract-research-organizations-are-doing-to-keep-employees/
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