PHARMACOVIGILANCE MARKET ANALYSIS
The global pharmacovigilance market is estimated to be valued at USD 7.41 Bn in 2024 and is expected to reach USD 12.80 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 8.1% from 2024 to 2031.
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Increased outsourcing of pharmacovigilance services by pharmaceutical companies, growth in clinical trials, rising drug safety concerns, and increased adverse events in reporting are some the key factors driving the market growth. With increasing pipeline drugs, it has become essential for manufacturers to closely monitor drug safety profiles in the post marketing phase through PV activities. Moreover, the development of new biological entities compared to traditional small molecule drugs has further prompted drug safety surveillance. Growing pressure from regulatory authorities on pharmaceutical players to minimize drug related risks are further expected to contribute to the market expansion over the coming years.
The rising adoption of pharmacovigilance services by pharmaceutical companies
The adoption of pharmacovigilance services by pharmaceutical companies is growing significantly due to stringent regulations regarding drug safety. Regulatory bodies like FDA and EMA are enforcing strict norms to monitor and ensure safety of drugs post marketing. This is driving pharmaceutical companies to outsource pharmacovigilance activities to specialized Clinical Research Organizations (CROs) who have expertise and infrastructure to carry out the services effectively. Outsourcing pharmacovigilance allows drug manufacturers to focus on their core competencies of drug research and development while leaving the safety monitoring activities to experienced CRO partners. This provides pharmaceutical companies access to advanced technologies, skilled workforce and a unified global approach towards safety reporting. CROs manage large medical databases, safety reporting tools and AI/ML technologies to identifying drug risks early-on. For example, CROs like IQVIA, Parexel, and Syneos Health regularly analyze Real World data from millions of patient records to pick up subtle adverse events that may have been missed in clinical trials. For instance, in September 2021, IQVIA initiated a significant partnership with NRx Pharmaceuticals to offer pharmacovigilance services and medical information in anticipation of potential regulatory measures. Additionally, a study featured in Frontiers in Drug Safety and Regulation in February 2022 underscored the rising importance of eco-pharmacovigilance in mitigating pharmaceutical pollutants' environmental impact. This trend highlights a growing market demand for pharmacovigilance services aimed at minimizing environmental pollution caused by pharmaceutical residues.
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Increasing Stringency of Regulatory Requirements
The increasing stringency of regulatory requirements across various countries is expected to drive significant growth in the global pharmacovigilance market. With new drugs entering the market at an unprecedented rate and increasing complexity of drug safety profiles, regulatory authorities have instituted more rigorous legislation and safety standards. Pharmaceutical companies are now mandated to conduct comprehensive safety profiling of drugs right from the early stages of development along with continual monitoring even post marketing. Compliance with regulatory norms has become absolutely critical for continued drug approvals and market access. The healthcare industry has also undergone intense scrutiny in the aftermath of several high-profile drug safety issues and failures. As a result, governments are now urging greater transparency and accountability from life sciences organizations in mitigating risks and ensuring patient welfare. This has prompted drug manufacturers to strengthen in-house medical surveillance and bolster outsourcing of pharmacovigilance functions to specialized service providers. The growing regulatory oversight coupled with higher compliance workload is likely to be a key driver propelling the demand for sophisticated pharmacovigilance solutions and contract research in the coming years.
Key Takeaways from Analyst:
The global pharmacovigilance market is poised to experience significant growth over the forecast period driven by the increasing need for the safety monitoring of drugs post marketing approval. Stringent regulatory requirements for pharmacovigilance across major countries are also propelling the demand for pharmacovigilance services. North America currently dominates the market owing to stringent regulatory mandates and presence of leading outsourcing companies. However, Asia Pacific is expected to grow at the fastest pace supported by increasing generic drug manufacturing in countries like China and India.
Outsourcing of pharmacovigilance activities to specialty service providers is becoming a global trend among pharmaceutical companies aiming to optimize costs and focus on their core operations. On the other hand, lack of skilled workforce and competing demands can hamper the market growth to some extent. Emergence of novel drugs like biologics and cell and gene therapies also presents significant opportunities with respect to novel safety monitoring mechanisms. Adoption of advanced technologies like artificial intelligence and Blockchain for signal detection is likely to revolutionize pharmacovigilance practices going forward. Such disruptions will make the safety monitoring more proactive, precise and cost-effective.
Market Challenge – High setup costs for PV software
The high upfront costs associated with implementing pharmacovigilance software is posing a major challenge for the growth of the global pharmacovigilance market. Setting up robust PV software requires significant investments in purchasing licensed software, customized configuration and integration with other IT systems, extensive validation and testing, and prolonged training of teams on using the new platform effectively. This leads to substantial capital expenditure that may not be feasible for many smaller to mid-sized companies and startups with limited budgets. Additionally, a major component of the high setup costs stems from hiring qualified professionals to manage the software implementation project. Leading PV software providers demand experienced consultants, validators, and project managers to oversee the various stages of deployment, ensuring compliance with regulatory guidelines and optimizing functionality. However, the shortage of skilled labor in this niche domain has driven consultation charges through the roof in recent times. According to data from the California Employment Development Department, average salaries of pharmacovigilance specialists in the U.S. grew by over 12% during 2020-2021 due to high demand. This further exacerbates the costs burden on companies.
Market Opportunity – Emerging markets in Asia Pacific and Latin America
The emerging markets in Asia Pacific and Latin America present a huge growth opportunity for the global pharmacovigilance market. These regions are experiencing rapid economic development which has lifted billions of people out of poverty and expanded the middle-class consumer base with increased spending power. As disposable incomes rise, healthcare systems are also undergoing modernization with greater investment. This has resulted in larger patient populations gaining access to advanced medications for various chronic and life-threatening diseases. At the same time, the growth of the pharmaceutical industry has exploded in these regions to cater to the demands of their huge populations. Many large multinational drug manufacturers have set up manufacturing and R&D facilities within Asia Pacific and Latin America in recent years to reduce costs and be closer to their customer base. As drug development rises sharply, the need for robust pharmacovigilance practices has become paramount to ensure patient safety standards are maintained. Both public and private healthcare organizations are recognizing the importance of pharmacovigilance and are dedicating more resources towards establishing nationwide surveillance systems.
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Insights By Clinical Trial Phases: Stringent Regulatory Requirements Drive Growth in Clinical Trial Phase III
The clinical trial phase III segment is expected to contribute 40.2% share of the global pharmacovigilance market in 2024 to owing to stringent regulatory requirements. Phase III trials involve several hundred to thousands of human participants and are intended to confirm the overall risk-benefit relationship of a drug and provide an adequate basis for labeling. Regulatory authorities such as the USFDA and EMA have implemented extensive regulations for phase III trials to ensure drug safety before market approval. Sponsors are required to develop comprehensive risk management plans to monitor adverse events throughout the trial period. This involves maintaining robust pharmacovigilance systems to detect, assess, and prevent drug safety issues from harming participants. Additionally, new safety data from all phase III studies must be reported to regulators on an ongoing basis. The large sample sizes involved in phase III mean even rare adverse reactions have a higher chance of being identified. Thorough long-term monitoring is also critical since most side effects may take years to manifest. Therefore, sponsors invest heavily in pharmacovigilance capabilities like medical review, risk management, and signal detection to fulfill regulatory obligations. Non-compliance can delay or jeopardize new drug approvals, creating major financial implications. To comply with safety reporting timelines, sponsors often outsource phase III pharmacovigilance activities to specialist clinical research organizations (CROs). CROs provide dedicated teams of medical reviewers, drug safety experts, and technology platforms to meticulously collect, interpret and relay adverse event data. Their expertise and standardized processes help accelerate regulatory submissions.
Insights By Type of Method: Shift Towards Electronic Reporting Drives Spontaneous Reporting Segment
Within pharmacovigilance service types, the spontaneous reporting segment holds the largest market share. This segment is expected to account for 35.21% of the market share in 2024 due to its wide acceptance. Traditionally, spontaneous reporting involved collecting adverse event reports using paper-based forms submitted voluntarily by healthcare professionals and consumers. However, regulatory agencies are now pushing for electronic reporting standards to modernize pharmacovigilance practices. Mandates like E2B and ICH E2B(R3) specify structured format requirements and technical specifications for electronic transmission of individual case safety reports (ICSRs). Compliance with these standards enables centralized interoperable databases and advanced data analytics capabilities at the global level. Pharmaceutical firms recognize electronic reporting improves the quality, consistency and accessibility of safety data versus older paper-based methods. Integrating ICSR intake facilities into existing clinical trial or EHR systems streamlines reporting workflows for sites, hospitals and physicians. It avoids manual re-entry and transcription errors. Several software vendors offer specialized adverse event reporting portals and mobile applications tailored for electronic ICSR submissions. These solutions facilitate real-time upload and validation of individual case reports directly from any device. Automated safety alerts can then be configured for regulators, risk managers, and medical experts. With both regulators and sponsors acknowledging its long-term benefits, electronic reporting adoption within spontaneous reporting systems is catalyzing swift growth. Meanwhile integration with EHRs ensures spontaneous reporting maintains relevance despite emergence of new signal detection technologies. This secures its continuous dominance as the major pharmacovigilance service type.
Insights By Type of Service Provider: In-House Segment Commands Highest Share from Cost Control Benefits
The in-house segment has the largest share of the pharmacovigilance market with 60.20% in 2024 owing to tangible cost-control advantages over outsourcing. In-house teams manage drug safety operations using a sponsor's own resources and facilities without involving third parties. Retaining pharmacovigilance capabilities internally offers direct oversight of processes to ensure strategic business priorities are addressed. Sponsors value expert safety operations integrated with their broader clinical, regulatory and medical affairs divisions for smoother decision making. In-house resourcing also maintains data security and confidentiality versus the risk of information leaks when using multiple external partners. Cost-wise, setting up in-house pharmacovigilance as a centralized shared-service model means fixed overhead expenses are distributed across a sponsor's entire drug portfolio. This facilitates economies of scale difficult to match through outsourcing numerous small, project-based contracts. When supplemented by flexible resourcing models like fractional hires or cloud-based technology platforms, in-house functions gain scalability advantages too. Resources can be scaled up or down quickly as a product moves through its lifecycle without contractual commitments.
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North America has established itself as the dominant region in the global pharmacovigilance market. The region is expected to account for 40.2% of the market share in 2024. The region is home to some of the largest pharmaceutical companies in the world as well as many contract research organizations (CROs) specializing in pharmacovigilance services. Stringent regulatory requirements for drug safety monitoring imposed by regulatory bodies such as the FDA have driven significant investments by pharmaceutical and biotech firms in building robust pharmacovigilance systems. Many companies also outsource parts of their pharmacovigilance operations to well-established CROs based in the U.S. and Canada to ensure compliance and leverage local expertise. In addition, North America attracts high-skilled pharmacovigilance professionals due to comparatively higher wages. These factors have enabled North American firms to be pioneers in developing innovative pharmacovigilance technologies and solutions.
The Asia Pacific region has emerged as the fastest growing market for pharmacovigilance industry globally. Countries like India, China, South Korea, and Japan have seen increased adoption of advanced pharmacovigilance practices in recent years. This can be attributed to rising generics production, expanding clinical trials by multinational players and growing expertise of local CROs. India in particular has developed into a global sourcing hub for pharmacovigilance services due to availability of low-cost yet skilled workforce. Several large pharmaceutical companies have established regional pharmacovigilance centers or partnered with Indian CROs to consolidate post-marketing safety operations. Simultaneously, drug regulators in Asia Pacific have also been strengthening regulations relating to pharmacovigilance and promoting safety best practices.
Pharmacovigilance Market Report Coverage
| Report Coverage | Details | ||
|---|---|---|---|
| Base Year: | 2023 | Market Size in 2024: | US$ 7.41 Bn |
| Historical Data for: | 2019 To 2023 | Forecast Period: | 2024 To 2031 |
| Forecast Period 2024 to 2031 CAGR: | 8.1% | 2031 Value Projection: | US$ 12.80 Bn |
| Geographies covered: |
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| Companies covered: |
Accenture, Cognizant Technology Solutions, Laboratory Corporation of America Holdings (LabCorp), IBM Corporation, QuintilesIMS (IQVIA), ICON plc, Capgemini, ITClinical, TAKE Solutions Ltd, BioClinica, PAREXEL International Corporation, Wipro Ltd, FMD K&L, Linical Accelovance, United BioSource Corporation (UBC), PRA Health Sciences, ArisGlobal, and Ennov Solutions Inc |
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*Definition: The global pharmacovigilance market refers to the process of detection, assessment, understanding, and prevention of adverse effects associated with drugs and medical products. It involves monitoring the effects of medical drugs after they have been approved for marketing, especially looking into adverse effects and documenting information about hazards. The global pharmacovigilance market generally consists of drug manufacturers, contract service providers, regulatory authorities like FDA that monitor the safety of marketed drugs and medical devices. Timely identification and management of risks related to drug safety helps minimize health issues and protects patients.
Pharmacovigilance Market Report Snapshots
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