The Global Life Sciences BPO Market was valued US$ 180.4 billion in 2015 and is projected to reach US$ 505.0 billion by 2024, according to a new report published by Coherent Market Insights.Reducing cost and increasing focus on core strengths is influencing medical device and pharmaceutical companies to outsource their processes to contract manufacturing organizations (CMO) and contract research organizations (CRO).
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Increasing demand for low cost drugs, rising cost pressure from various governments, patent cliffs, and uncertain regulatory conditions are factors contributing to increasing revenue growth of the global life sciences BPO market. Globally, pharmaceutical, and medical device companies are entering into strategic agreements with contract research organizations to leverage their expertise. This is helping them introduce new products at reduced costs and in turn obtain a competitive advantage.
In the current market scenario, outsourcing service is extended to medical coding, medical transcription, and clinical services. CMO and CROs provide products and services at much lower costs. Moreover, their regional regulatory expertise helps pharmaceutical and medical device companies to meet regulatory requirements in various countries.
Demand for life sciences BPO is high in Asia and Latin America due to large patient pool, easy availability of patients for clinical studies at a lower cost, and cost effective CMOs and CRO services. However, rising concerns over U.S. Food and Drug Administration (FDA) inspections in these regions is adversely impacting market growth to a certain extent. CMOs and CROs such as Divis Laboratories Ltd., Accenture pl., and PAREXEL International Corporation are investing to cater to demand for Good Manufacturing Practices (GMP) requirements and regain the trust and share for CMO and CRO market.
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Key takeaways of the market:
Constant endeavor for achieving high-quality results at low cost is driving demand for outsourcing in the global healthcare industry. This trend is expected to propel the global life science BPO market at a compound annual growth rate (CAGR) of 12.2% during the forecast period.
Pharmaceuticals outsourcing segment led the global life sciences BPO market with an estimated value of US$ 119.6 billion in 2015. Larger number of players are involved in contract manufacturing of pharmaceuticals and biotech products as compared to that of medical devices. In terms of medical devices, a contract manufacturer turns out to be the long-term manufacturer for that particular device. Pharmaceutical companies on the other hand, have cost-based contracts with CMO, as shifting to other vendors (CMOs) is easy due to presence of large number of contract manufacturers worldwide.
In terms of end users, healthcare providers dominate the market and accounted for a share of 89.1% in 2015. Healthcare providers which include manufacturers, and research organizations are using these services in order to streamline their process, and focus on core business.
Currently, market players such as Accenture plc. Cognizant Technology Solutions, Catalent, Inc., Covance, Inc., Boehringer Ingelheim GmbH and Genpact Limited are offering a plethora of service as a one-stop solution to healthcare providers to outsource their processes.