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.