Global life sciences BPO market growth is expected to be driven by rising outsourcing and increasing R&D expenditure
Global life sciences BPO market is estimated to be valued at USD 408.1 Bn in 2024, exhibiting a CAGR of 13.2% over the forecast period 2024-2031. Growing need to streamline business processes and focus on core competencies propel pharmaceutical and biotech companies to rely more on outsourcing. Furthermore, rising research and development expenditure to develop new biologics and specialty drugs also boosts demand for third-party service providers.
Market Dynamics:
Rising outsourcing can drive the life sciences BPO market growth. Pharmaceutical companies are significantly outsourcing non-core operational activities like regulatory affairs, sales and marketing support, and supply chain management to lower costs and improve efficiency. Increasing research and development expenditure by biopharmaceutical players can drive the market growth. There has been increase in spending on R&D as pharmaceutical firms focus on developing specialty drug therapies and precision medicines. This has increased the workload at various stages of clinical trials and drug development, boosting adoption of third-party service providers.
Increasing demand for outsourcing various non-core functions
Global life sciences BPO market growth is driven by increasing demand from life sciences companies to outsource various non-core functions like administration, finance & accounting, regulatory affairs and clinical trials. Outsourcing such non-core operations helps life sciences companies focus their resources on core research and development activities. It also provides cost savings through operational efficiencies achieved by BPO service providers due to their specialized expertise and economies of scale. Many large and medium pharmaceutical companies are outsourcing more work to CROs, CMOs and other BPO players to streamline their operations.
Rising pressure to reduce costs and improve profit margins
Rising pressure on life sciences companies to reduce costs and improve profit margins can drive the market growth. The industry faces many challenges like patent cliffs, regulatory requirements, rising R&D costs and pricing pressures. Outsourcing to BPO firms provides an effective way for life sciences companies to optimize costs and boost margins. Service providers leverage technologies, shared services centres and expertise to deliver services at lower unit costs. Functions like accounting, marketing, manufacturing and others that do not require in-house expertise are being outsourced. This helps life sciences companies to significantly lower operating expenses.
Stringent regulatory requirements
Presence of stringent regulatory requirements that life sciences companies must comply can hamper the market growth. Regulations surrounding drug approvals, clinical trials, manufacturing quality standards and others involve heavy documentation and compliance work. Any non-compliance can attract huge penalties and reputation damage. While BPOs help with regulatory functions, their work is continuously monitored by sponsors. Transitioning work also requires proper knowledge transfer. Moreover, regulatory changes force life sciences firms and BPOs to frequently modify standard operating procedures.
Concerns around data privacy and IP protection
Concerns around data privacy, confidentiality and intellectual property protection, when work is outsourced, can hamper the market growth. Life sciences companies deal with highly sensitive data related to drugs, therapies, clinical processes and patients. Any security breach can be detrimental. While BPOs take required measures, clients remain cautious about outsourcing certain critical functions. Transitioning of work also requires BPOs to guarantee protection of life sciences sponsors’ IP and data. Addressing these concerns fully requires time and continued investments, thus, hampering adoption of BPO services.
Increased scope for clinical trial solutions
Increased scope for providing complete clinical trial solutions can offer growth opportunities. Clinical trials have become highly complex involving large patient pools, different geographies and new protocols. This has boosted demand for full-service clinical trial BPO providers who can manage every aspect of trials from site identification and patient recruitment to lab sample testing and reporting. This is an area where BPOs can take more end-to-end responsibility and help life sciences companies optimize costs and speed of trials, presenting a lucrative opportunity.
Rise of specialized BPO niche players
Emergence of more specialized niche BPO providers focusing on individual functions can offer growth opportunities. While large BPOs offer diverse services, niche players have deeper expertise in select domains like regulatory submissions, statistical analysis, medical writing, pharmacovigilance, and others. These ensure highest quality and turnaround times. This allows life sciences sponsors to engage best-in-class partners for different activities. It also spurs competition leading to more innovation and affordable offerings.
Link: https://www.coherentmarketinsights.com/market-insight/life-sciences-bpo-market-24
Key Developments:
- In February 2024, Accenture's, a multinational professional services company, life sciences division had grown because to its acquisition of ConcentricLife, a well-known healthcare marketing firm, in late 2023. Accenture Song, the biggest digital agency globally, has integrated 270 specialists from ConcentricLife through a tuck-in acquisition. Accenture will now be able to provide full life sciences commercial services, from strategy and execution to operations. With a competitive market driven by complex regulations and increasing disease prevalence, its strategic expansion strives to address the changing needs of patients and healthcare professionals.
- In December 2021, IQVIA, a global leader in advanced analytics, technology solutions, and clinical research services for the life sciences industry, had been recognized as a Leader in the Worldwide Life Science Sales and Marketing Business Process Outsourcing (BPO) Pharma space by International Data Corporation (IDC). This designation reflects IQVIA's commitment to providing real-world solutions and enabling pharmaceutical companies to achieve improved outcomes, growth, and productivity through its BPO offerings.
Key Players: Accenture, Plc, Boehringer Ingelheim GmbH, Cognizant Technology Solutions, Infosys, Genpact Limited, ProMab Biotechnologies, Inc, Charles River Laboratories International, Inc, Catalent, Inc., Covance, Inc., Fareva, ICON, Plc, DSM, Health Decisions, Inc., IQVIA, Laboratory Corporation of America Holdings, Syneos Health, Inc., Parexel International Corporation, PRA Health Sciences
