GLOBAL PHARMACEUTICAL CONTRACT SALES OUTSOURCING (CSO) MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The global pharmaceutical contract sales outsourcing (CSO) market size is expected to reach US$ 15,346.7 Mn by 2030, from US$ 8,599.2 Mn in 2023, exhibiting a compound annual growth rate (CAGR) of 8.6% during the forecast period.

Pharmaceutical CSO involves contracting out a pharmaceutical company's sales and marketing activities to a third-party vendor. There are primarily two types of CSO models used - the contract sales force model and the full-service CSO model. In the contract sales force model, the vendor provides trained sales representatives and managers but the client pharmaceutical company maintains control over business strategies, compliance, and marketing activities. In the full-service CSO model, the vendor takes ownership of the entire sales force including business functions to drive results.

Both CSO models provide advantages to pharmaceutical companies. It allows them to supplement their existing sales force in a flexible and cost-effective manner to promote new product launches or grow sales in select geographic areas. CSOs also have expertise in sales operations, compliance, and leverage economies of scale to control costs. However, CSO models also have disadvantages. Pharmaceutical companies may lose control over field activities and face challenges integrating external representatives with internal teams. There are also risks of overdependence on CSO partners and losing focus on long-term strategies. Data privacy and sharing trade-offs must also be considered carefully. Overall, CSOs can optimize sales activities but requires the management of potential loss of control and compliance issues.   

Global Pharmaceutical Contract Sales Outsourcing (CSO) Market- Regional Insights

• North America is expected to be the largest market for Pharmaceutical Contract Sales Outsourcing (CSO) during the forecast period, accounting for over 35.7% of the market share in 2023. North American region has emerged as the most prominent market for pharmaceutical CSO over the past decade. This dominance can be attributed to several factors. Being the largest pharmaceutical market globally with a high penetration of specialty medicines, North America presents a massive commercial opportunity for drug manufacturers. As development cycles shorten and pipelines expand rapidly, outsourcing non-core functions such as sales has become increasingly common among biopharma companies based in the U.S. and Canada. There is also a thriving ecosystem of CSO vendors with significant regional presence and networks to efficiently access prescribers.
• Asia Pacific is expected to be the second-largest market for Pharmaceutical Contract Sales Outsourcing (CSO), accounting for over 25.2% of the market share in 2023. The Asia Pacific region stands out as the fastest growing market for pharmaceutical CSO globally. Rapid economic expansion has significantly improved the affordability and accessibility of medications in major emerging countries. At the same time, an aging population and growing disease burden points to higher healthcare expenditures across Asia Pacific in the years to come. International pharmaceutical firms are eager to capitalize on these evolving dynamics by carving out market share early through outsourced commercial capabilities.
• Europe is expected to be the fastest-growing market for Pharmaceutical Contract Sales Outsourcing (CSO), with a share of 19% during the forecast period. The growth of the market in this region is attributed to the increasing numerous biopharma companies in Europe rely on contract sales organizations to conduct these promotional activities due to rising costs and the important role of personal engagement in influencing prescription decisions, especially for specialty and innovative drugs.

Figure 1. Global Pharmaceutical Contract Sales Outsourcing (CSO) Market Share (%), By Region, 2023

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Analyst’s Views: The pharmaceutical Contract Sales Outsourcing (CSO) Market is poised to grow steadily driven by increasing cost pressures on pharmaceutical companies to streamline sales forces. Outsourcing non-core sales activities allows drug makers to refocus on new product development and marketing of key brands. This cost-efficiency is prompting more pharmaceutical firms to engage CSO partners for promotional activities in select therapeutic segments and geographical markets.

North America currently dominates the market and is expected to continue its leadership position. However, Asia Pacific is likely to emerge as the fastest growing region over the next five years. Increasing generic penetration, rising healthcare expenditure, and growing focus of pharmaceutical companies in emerging Asia Pacific countries will boost outsourcing in this region.

Global Pharmaceutical Contract Sales Outsourcing (CSO) Market- Drivers

• Improved coverage of targeted physicians and geographies: Pharmaceutical Contract Sales Outsourcing (CSO) services allow pharmaceutical companies to cost-effectively expand their sales coverage to target more physicians and geographies. By outsourcing non-core sales functions, pharmaceutical companies can gain access to specialists who focus on optimally engaging with healthcare practitioners. This improves the reach of vital information regarding new drugs and therapies to providers across diverse regions.

CSO providers employ scientific experts proficient in multiple medical specialties and geographically dispersed teams. This enables pharmaceutical firms to conduct more nuanced physician targeting and custom-tailor their commercial strategies based on regional healthcare needs and prescriber preferences. For example, scientists from CSO firms can educate cardiologists in smaller towns about the latest heart failure drugs through virtual detailing. This supplemental coverage amplifies the pharmaceutical industry's ability to raise disease awareness and impact treatment outcomes on a broader population level.

• Eliminate fixed cost of internal sales force: Pharmaceutical companies are increasingly outsourcing their Salesforce operations to specialty contract sales organizations as it helps them eliminate the fixed costs associated with maintaining an in-house sales team. Having your own dedicated Salesforce requires significant investments in their hiring, training and management. Contract sales organizations are able to offer the flexibility of an on-demand Salesforce without the long term commitments. This allows drug manufacturers to scale up or down their sales coverage quickly based on the demand for their products.

CSO partners can manage the sales operations more efficiently due to economies of scale and their specialized expertise in various therapeutic areas. They work on narrow commissions based on performance which optimizes the cost for pharmaceutical firms. This variable cost structure of CSOs has become very appealing especially during uncertain market conditions in recent times. For example, according to data from World Health Organization (WHO), during the COVID-19 pandemic years of 2020-21, pharmaceutical companies faced disruptions in their new product launches and slowed addition of new reps due to budget cuts and shift in focus to pandemic related treatments. Outsourcing to CSOs enabled them to right size their Salesforce as required without hampering the promotion of other vital drugs and vaccines.

Global Pharmaceutical Contract Sales Outsourcing (CSO) Market- Opportunities

• Growth in specialty drug markets: The growth in specialty drug categories such as oncology, immunology and cell and gene therapy presents a huge opportunity for the global pharmaceutical contract sales (CSO) outsourcing market. Specialty drugs are complex medicines that treat small patient populations with chronic and often life-threatening illnesses. Their development requires specialized expertise and marketing approaches. The IDx Healthcare Report 2021 estimates that specialty drug spending is expected to grow from US$ 500-US$ 600 billion currently to US$1 trillion by 2030 globally. As specialty drug pipelines continue to expand with new breakthrough therapies for conditions like certain cancers and rare diseases, pharmaceutical companies will need to scale up their specialty commercialization quickly without adding long term operational costs. CSO players with therapeutically aligned specialty teams and strong networks of KOLs/specialists can help drug makers launch these complex medicines efficiently and maximize patient reach.
• Adoption of digital technologies in pharmaceutical marketing: The adoption of digital technologies in pharmaceutical marketing presents a significant opportunity for growth in the pharmaceutical contract sales outsourcing market. As the healthcare industry continues to transition towards more virtual and remote models of care, pharmaceutical companies must adapt their sales and marketing strategies. Leveraging digital platforms will be crucial for contract sales organizations to continue providing value and supporting pharmaceutical customers' brand messaging and promotion to healthcare professionals.

Companies are already increasingly utilizing multichannel digital approaches like telemedicine, mobile apps, online advertising and medical educational websites to target providers. Contract sales organizations that can integrate these technologies into their service offerings will be well-positioned to take on expanded roles in deploying multimedia detailing and virtual sampling programs. They may provide video/teleconference sales presentations, engage physicians through online communities and facilitate e-detailing through portals or electronic medical records systems. This allows the sales force to continue raising drug awareness despite changes in healthcare access and delivery due to factors like social distancing requirements.

Global Pharmaceutical Contract Sales Outsourcing (CSO) Market- Trends

• Increasing uptake of outsourcing non-core functions: The increasing trend of outsourcing non-core functions by pharmaceutical companies is positively impacting the contract sales outsourcing market. Many large pharmaceutical firms are choosing to focus only on drug discovery and product development related activities, and outsourcing other non-critical sales and marketing operations to specialized CSO providers. This allows the core companies to optimize costs and divert resources towards R&D.

CSO companies are benefitting immensely from this strategy. They can leverage their expertise gained over decades of experience in effectively engaging with doctors and healthcare professionals. Specialized sales teams at CSO firms ensure brand messages are consistently communicated to target audiences. They also help evaluate market feedback to pharmaceutical companies on treatment patterns and prescribing behaviors. This two-way communication enhances the customer understanding of drug manufacturers.

• Rise in demand for customized and value-added services: The demand for customized and value-added services has significantly impacted the pharmaceutical contract sales outsourcing (CSO) market in recent years. Pharmaceutical companies are increasingly looking for CSO partners that can offer bespoke solutions tailored to their specific therapeutic areas, customer segments, and go-to-market strategies. They want partners that can help enhance customer engagement through tailored messaging and multichannel outreach programs. Partners are expected to leverage analytics and real-world data to generate actionable insights for making field operations efficient.

Global Pharmaceutical Contract Sales Outsourcing (CSO) Market - Restraints

• Risk of inconsistency in quality of sales operations: The risk of inconsistency in quality of sales operations can significantly restrain the growth of the Pharmaceutical Contract Sales Outsourcing (CSO) market. When pharmaceutical companies outsource their sales operations to contract sales organizations, they lose direct control over how the sales force is executing the sales strategies and engaging with healthcare providers. Any inconsistencies in the quality of sales operations like lack of adherence to sales methodologies, improper messaging, inadequate training of sales representatives, etc. can seriously hamper the company's business goals. It can negatively impact the company's image and reputation among healthcare providers as well as lead to loss of market share if the inconsistency issues are widespread and frequent.
• Data privacy and security concerns: Data privacy and security concerns are indeed major challenges restraining the growth of the Pharmaceutical Contract Sales Outsourcing (CSO) market. As CSO firms handle sensitive patient data and work with clients to promote drug prescriptions, issues of data breaches, and leaks can severely damage trust in the industry.

For the pharmaceutical industry, patient privacy is paramount. CSO companies often collect and store information like medical records, insurance details, prescriber habits, etc. to help target their promotion and sales strategies. However, this sensitive data needs robust safeguarding, as any leaks can not only harm patients but also attract hefty penalties under laws like the Health Insurance Portability and Accountability Act (HIPAA) in the U.S. According to a 2020 report by the Department of Health and Human Services, healthcare data breaches increased by 52% from 2019. Such incidents understandably raise concerns among pharma companies over engaging CSO partners.

Figure 2. Global Pharmaceutical Contract Sales Outsourcing (CSO) Market Share (%), By Type, 2023

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Global Pharmaceutical Contract Sales Outsourcing (CSO) Market- Recent Developments

Service Launch

• On June 6, 2023, Aktana a software company launched a new platform named Contextual Intelligence 360 for Pharma Product Launch. This improves the product launch success for life sciences companies facing looming patent cliff and smaller pipeline. Contextual Intelligence 360 for product launch reduces time to market and boosts sales for new drug products. This service launch by Aktana enhances product launch services for pharmaceutical companies.
• On October 2, 2023, Trinity a lifescience company introduced Launch Accelerator 2.0 to provide smart, efficient launch planning with customized, tech-enabled support. It is an easy-to-use cloud-based project management tool that leverages recent “real world” launches to guide cross-functional Global Launch and Project Management Office (PMO) teams. It acts as a key development for cloud-based product launches.
• In June 2022, EVERSANA a lifescience company launched EVERSANA INTOUCH to serve the life sciences industry. It provides life sciences marketing to accelerate brand performance through insights and seamless connectivity to EVERSANA’s integrated commercialization solutions. The EVERSANA INTOUCH acts as a key development to drive the commercialization services to pharmaceutical companies.

Acquisitions and Collaborations

• On October 11, 2023, EVERSANA acquired Healthware Group, a full-service agency and innovation consultancy. This acquisition expanded EVERSANA’s European operations and worldwide capabilities to help pharmaceutical, medical device, and emerging biotech companies globally to launch products, expand market access, or solve unique geographic and market-specific challenges. This acquisition drives the market due to increasing capabilities such as launch of products and expand market access.
• On September 13, 2023, Deloitte a consulting firm collaborated with Salesforce, a software company, to help pharmaceutical companies bring innovative therapies to patients faster. This collaboration enhances next generation of innovations that enable the rapid scientific and technological progress in the BioPharma industry.
• On November 1, 2023, Aktana acquired Tact.ai’s field engagement and conversational Artificial intelligence (AI) This acquisition extended Aktana’s leadership in field intelligence by delivering several new capabilities frequently requested by commercial and medical leaders overseeing omnichannel programs. Tact.ai is human-friendly technology that connects life science companies and customers to improve real-time CRM and content syncing.

Top Companies in the Global Pharmaceutical Contract Sales Outsourcing (CSO) Market

• IQVIA Inc.
• Syneos Health Inc.
• Parexel International Corporation
• PPD
• ICON Plc
• Publicis Touchpoint Solutions, Inc.
• PRA Health Sciences, Inc.
• The Medical Affairs Company (TMAC)
• Ashfield Healthcare Communications Group
• GTS Solutions

Definition: The Pharmaceutical Contract Sales Outsourcing (CSO) market refers to the practice of pharmaceutical companies outsourcing their sales and marketing functions of specialized service providers. These services offer a range of services including Salesforce deployment, medical communication, market access, and promotional activities to help pharmaceutical companies promote and distribute their products effectively.