Global regulatory affairs outsourcing market is estimated to witness high growth, owing to increasing compliance regulations and cost optimization requirements
Global regulatory affairs outsourcing market is estimated to be valued at USD 8.41 Bn in 2024, exhibiting a CAGR of 10.7% over the forecast period 2024-2031. Due to stringent safety regulations and approval process in the pharmaceutical industry, there has been huge demand for regulatory outsourcing services.
Market Dynamics:
With increasing globalization of clinical trials and product registrations, complying with complex and varying regulatory requirements across countries has become challenging for pharmaceutical companies. Outsourcing regulatory functions help companies to focus resources on core competencies while ensuring compliance. Failing to comply can result in heavy penalties, delays in approvals or product recalls. Regulatory outsourcing helps mitigate compliance risks in a cost-effective manner. Subject matter experts who regularly interact with regulatory authorities help navigate the approval process smoothly. This is especially critical for biosimilar and specialized/orphan drugs with a narrow target patient population and regulations.
Increasing Stringency of Regulations
Regulations surrounding the life sciences industry have become increasingly complex over the past decade. Stringent guidelines from the U.S. FDA and EMA require extensive documentation and clinical data. Meeting all compliance needs internally is challenging for most companies due to high costs and lack of specialized expertise. Outsourcing regulatory functions allows organizations to leverage external regulatory specialists who stay up-to-date with latest guidelines. This enhances compliance capability and speeds up product approval processes.
Focus on Core Competencies
The life sciences industry is facing constant pressure to innovate and bring new products to market faster. However, managing regulatory compliance internally is not the core competence of most pharmaceutical and medical device companies. It is a non-revenue generating activity that requires significant investments. Outsourcing to specialists enables companies to focus their internal resources only on areas of strategic importance like R&D, sales and marketing. This improves productivity and accelerates the development of new treatments.
Confidentiality and Data Security Concerns
When sensitive information like clinical trial data, intellectual property and trade secrets are shared with external vendors, there are inherent risks of data breaches or leaks. Regulatory documents often contain commercially important information that companies want to protect closely. Ensuring complete security and privacy of outsourced functions is challenging. Stringent quality controls and contract clauses are required to address these concerns and gain customer trust.
Loss of Control
By outsourcing regulatory activities, life sciences firms lose direct oversight and control over critical compliance processes. Dependence on third party vendors for core operations like obtaining approvals can be seen as a disadvantage. Outsourcing relationships require robust governance mechanisms and service level agreements to mitigate the risks of delays, poor quality or non-performance by vendors. Close collaboration and transparency is important to retain a certain level of control even while outsourcing.
Access to Specialized Skillsets
Regulatory affairs is a highly specialized domain requiring deep technical expertise and experience across various global markets and therapeutic categories. Outsourcing provides access to wider talent pools and specialist capabilities that may not be available or affordable to build in-house. Subject matter experts help streamline processes, reduce compliance issues and navigate increasingly complex regulations more effectively.
Flexible Resourcing Model
Outsourcing regulatory functions on a project basis provides flexibility to scale resources up or down depending on the changing volume and nature of work. This hybrid insourcing-outsourcing model suits life sciences firms with fluctuating/seasonal compliance needs. It avoids building large permanent regulatory teams and the associated costs. Outsourcing partners offer an adaptable, pay-as-you-go resourcing approach to manage demand fluctuations. While regulatory outsourcing presents some challenges around oversight and security, the advantages of leveraging external expertise, focusing on core areas and gaining flexible capacity far outweigh these restraints. It is becoming an essential strategy for life sciences companies to navigate evolving regulations and accelerate product development.
Link: https://www.coherentmarketinsights.com/market-insight/regulatory-affairs-outsourcing-market-2751
Key Developments
- In January 2023, AmerisourceBergen Corporation, a drug wholesale company and a contract research organization, acquired PharmaLex Holding GmbH, a leading service provider in the life sciences industry that has expertise in regulatory affairs. This acquisition marked a substantial expansion of AmerisourceBergen's service offerings within a critical market.
- In April 2022, VCLS partnered with EC Innovations, a China-based company specializing in global translation services. With a strong background in translating highly regulated life sciences and medical content, this partnership significantly enhanced VCLS's capabilities and operational strengths.
- In August 2021, ProPharma Group, a regulatory sciences consulting firm, acquired iSafety Systems, a provider of end-to-end pharmacovigilance and safety services based in India. This acquisition is anticipated to enhance ProPharma Group's global leadership in regulatory and compliance consulting, pharmacovigilance, clinical research services, and medical information.
- In February 2021, ICON plc, a clinical research organization company mcompleted the acquisition of PRA Health Sciences, Inc. in a transaction valued at around USD 12 billion, paid in cash and stock. This acquisition significantly bolstered ICON's capabilities in medical affairs services.
Key Players: Accell Clinical Research, LLC, Genpact, CRITERIUM, INC., PRA Health Sciences, Promedica International, WuXiAppTec, Medpace, PPD Inc., Charles River Laboratories, ICON plc, Covance, Parexel International Corporation, Freyr, Navitas Clinical Research, Inc., Medelis, Inc., Sciformix, Tech Tammina, Acorn Regulatory Consultancy Services Ltd., BIOMAPAS, REGULATORY PROFESSIONALS, CompareNetworks, Inc.
