Bright Future for CROs: Why Offshore Lab Research is Booming
By Federico L. O’Conor, founder, ICCL Inteligencia de Mercados.
Contract Research Organizations (CRO) in Latin America are key strategic partners to many pharmaceutical and biotech companies from North America and Europe. CRO’s allows these firms to concentrate efforts in their core skills, mostly related to manufacturing, marketing and sales. In the continuous race to optimize resources, cost reduction generally results the very first variable to be adjusted. Areas such as legal affairs and logistics have been pioneers when their specific duties have been outsourced into the hands of organizations more specialized in those key activities.
Beginning fifteen years ago, healthcare enterprises began using outsourcing providers to assist in areas like Regulatory Submissions, Patient Recruitment, Project Management and Clinical Monitoring. In recent years, Latin America has become an increasingly attractive destination.
First reports of CRO’s presence in countries such as Argentina and Brazil date from the mid 1990’s. Small local companies started by offering services to small pharma labs without large or proper R&D facilities, aiming to optimize resources during the always difficult and costly period of pre-market product development. Over the course of time, mergers and acquisitions began to create larger CRO operators.
There are still remaining local companies, like Siplas of Colombia, and most recently Thywill of Argentina (acquired last year by PSI), founded in 2003. Venezuela has its “Centro Profesional de Investigación Clínica (CPIC)” offering a vast range of associated services. Mmatiss, originally from Mexico and founded in 1996, expanded its operations across the region, competing with major multinational CRO’s like Quintiles, Parexel and PPD that have expanded their businesses into Latin America in recent years.
CRO’s planning to expand their operations in Latin America will continue to find increasing pools of research talent. The presence of high level graduates becomes an essential issue when investment is planned. In the past, top Latin American universities have struggled to deploy graduates into the private sector. CRO’s have become a primary channel for these knowledge workers.
Due to the significant difference between actual general value of Latin American currencies against the US dollar, these high qualified professionals operating from countries like Argentina, Colombia or Brazil become a cost – effective solution for sponsoring companies as they are paid in the local, devaluated, currencies.
A third element to be considered is the fact that there also exist many public hospitals eager to collaborate in clinical trials. Apart from the facilities their selves, physicians, nurses and other members of staff generate a rich environment to develop these tasks in mutual collaboration with CRO’s.
Federico L. O’Conor founded the Consultancy Firm ICCL Inteligencia de Mercados in 1997. Previously, he was a market research analyst for Healthcare at Frost & Sullivan.