The U.S. Economy and its Effect on the Clinical Research Industry
By Lisa Mazurka, President and Founder, Clinical Research
Consulting, Inc.
Abstract
The U.S. economy is the current hot topic in the news today. Large
corporate layoffs, mergers, acquisitions and bankruptcy are all
areas of concern amongst Americans.
How has the clinical research industry been effected by the state of
the U.S. economy? Is this ever growing field experiencing the same
difficulties as in other industries?
This article will discuss the current state of the U.S. economy, the
field of clinical research and the impact it has and may have in the
future.
About the Author:
Lisa Mazurka is Founder and President of Clinical Research
Consulting, Inc., a full service clinical monitoring, project
management, training, and educational service organization committed
to raising standards within the pharmaceutical and biotechnology
industries. Lisa is an avid clinical educator and has
delivered hundreds of educational programs for hospitals, academia
and biotech start-ups to leading pharmaceutical companies. She
has also taught for the Boston University School of Medicine and The
Massachusetts Biotechnology Council.
Americans are concerned about the current state of the U.S. economy,
and rightly so. Every day, there are announcements of large
corporate layoffs, bank mergers and acquisitions, bankruptcy and
home foreclosures.
The current state of the U.S. economy has not left the clinical
research industry immune. Large pharmaceutical companies,
feeling the pressure of the declining financial and stock markets,
are pursuing mergers and acquisitions. Pfizer’s acquisition of Wyeth
is considered one of the largest acquisitions in the clinical
research industry to date and has created much discussion amongst
clinical research professionals. Will other large pharmaceutical
organizations follow suit? What does this mean to the respective
individual organizations and its employee’s? Will the merger create
layoffs as the two organizations come together and restructure?
The clinical research industry has in fact been experiencing layoffs
as in other industries. Recent numbers of announced layoffs include
AstraZeneca at 15,000, Merck and Co. at 8,400 and Schering Plough at
5,500.¹
Although mergers, acquisitions and layoffs in the pharmaceutical
industry may appear to spell trouble for its industry professionals,
interestingly, other areas in clinical research are thriving.
Clinical Research Organizations (CROs) have seen consistent growth
in revenue year after year. This growth continues despite the
decline in our economy and specific concerns regarding
mergers/acquisitions and layoffs within the larger pharmaceutical
organizations. The Tufts Center for the Study of Drug Development
predicts this market will continue expanding 16% per year for the
next five years.2
One may not be surprised by the current statistics and current
growth projections for CROs; especially given the fact that we are
experiencing mergers/acquisitions and layoffs in some of the larger
pharmaceutical organizations.
Who will continue to perform the work and tasks at hand at those
organizations? If the research continues then the work needs to
continue. The solution, CROs.
Clinical Research Organizations (CROs) are organizations which
provide support to the pharmaceutical and biotechnology industry in
order to aid in the drug and medical device research and development
process. CROs assume one or more obligations of the Sponsor and
these obligations are outlined in a transfer of obligations document
mandated by the FDA. CROs are an extension of the clinical research
industry performing various clinical research duties which an
organization may not necessarily have the infrastructure to perform
or may lack the number of internal staff needed to complete such
duties.
It is not surprising that our industry is seeing CRO growth
especially during the current state of our economy. With employee
layoffs and downsizing as a result of mergers and acquisitions, the
respective pharmaceutical/biotech organizations are seeking
outsourcing as a solution. Clinical Research Consulting, Inc. (CRCI)
has seen an increase in requests for proposals (RFPs) since late
2008 and the start of 2009. “We have definitely seen an increase in
outsourcing needs during this timeframe” states Lisa Mazurka,
President of CRCI. “Our request for proposals has doubled when
compared to the same time frame last year. Organizations that are
downsizing are looking to us to fill in the gaps.”
Even new types of niche CROs are emerging and growing during these
economic times. Inclinix, based in North Carolina is an enrollment
CRO, helping Sponsors of pharmaceutical and biotechnology compounds
identify potential subjects and meet enrollment needs. Instead of
downsizing, Inclinix has recently increased its staff of Regional
Recruitment Managers (RRMs) 200% from 25 to 75 individuals. 3
CROs have been instrumental in the clinical research industry and to
pharmaceutical/biotech organizations as an alternative supplemental
support for services in conducting aspects of clinical research
development. Recent layoffs in major pharmaceutical organizations
have led to an increase in the need for such services from CROs. It
will be interesting to see if the growth of CROs continues to
increase beyond the current projections given the state of our
economy and need for additional support for various industry
organizations.
References
1. S. Gambrill, “Pharma
Consolidation Slows CRO Market in Short Term” Figure Provided by
Yahoo Finance, CenterWatch, Volume 16 Issue 3 March 2009.
2. Tufts Center for
the Study of Drug Development. Outlook 2007. (Boston,
MA: Tufts CSDD, 2007).
3. K. Nelen,
“Pathways to Patients”, Applied Clinical Trials, Volume 17, Number
1, January 2009.
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