Year: 2019 and 2027
Market size: $46.8 billion and $69.8 billion, respectively
Clinical trials are carefully designed studies that test the benefits and risks of new medical treatments and devices. Each clinical trial is led by a principal investigator, usually a doctor, along with a team of nurses and researchers. In the United States, once scientists have completed laboratory research and pre-clinical testing and achieved a successful result—work that can involve years of experiments on animal and human cells—the pharmaceutical or device company submits its data to the Food and Drug Administration (FDA) for approval to begin testing on human volunteers.
Before an investigational medication1 can be sold to the public, it must successfully pass through 3 clinical trial phases. Phase I trials last several months and involve small numbers of volunteers, 20 to 100. This study determines the effects of the drug on humans and the side effects as dosages are increased. About 70% of experimental drugs pass this phase of clinical trials.
Phase II trials typically last several months to two years. They test the efficacy of a drug. Several hundred volunteers participate in randomized trials where one group receives the experimental drug and another either receives a standard treatment or a placebo. Often neither the patient nor the researchers know who is receiving the experimental drug. This allows investigators to compare information about relative safety and effectiveness. About 33% of experimental drugs pass these first two phases.
Phase III trials are also randomized, blind studies but involve several hundred to several thousand patients. This stage can last several years and provides the pharmaceutical company and the FDA a more complete picture of the drug’s effectiveness, benefits, and adverse reactions. Between 70% and 90% of drugs that enter Phase III successfully complete this level of testing. Phase III trials garnered a 53% revenue share in 2019, followed by Phase II with a 19.8% share. Phase III trials are the most expensive because they involve a large number of patients and a long treatment period.
After a successful Phase III completion, the pharmaceutical company can request FDA approval to market the product. According to PhRMA, less than 12% of drugs that enter Phase I trials go on to be approved by the FDA. Over the past decade, the average research and development cost to bring a new FDA-approved medication to market was $2.6 billion, the development process taking an average of 10-15 years.
With COVID-19 affecting the lives and livelihoods of millions of people around the world and causing hundreds of thousands of deaths, currently more than 150,000 in the United States alone, President Donald Trump announced Operation Warp Speed on May 15, 2020. This is a public-private initiative to “accelerate the development, manufacturing, and distribution of COVID-19 vaccines, therapeutics, and diagnostics.” One of its goals is to “have substantial quantities of a safe and effective vaccine available for Americans by January 2021,” a mere 7 months in the future, although researchers had been working on a vaccine since January 2020. As of July 30, 2020, there were 42 potential vaccines in various stages of development around the world according to the Regulatory Affairs Professionals Society COVID-19 Vaccine Tracker.2 Earlier in 2020, the World Health Organization announced an international clinical trial launch, called Solidarity, to find effective treatments for this virus. In May 2020, as a part of Solidarity, it announced an international alliance for simultaneously developing a number of vaccines for COVID-19. In addition, regulatory agencies across the globe issued guidelines related to conducting clinical trials during the COVID-19 pandemic, restricting face-to-face interactions and supporting the incorporation of virtual services, including performing decentralized clinical trials in which many trial functions are done remotely and researchers rely on help from the patients, their family members, and other caregivers instead of healthcare professionals.
Today’s market size shows the revenues for clinical trials worldwide in 2019 and projected for 2027. Funding for clinical trials comes from government agencies such as the National Institutes of Health and the Department of Defense in the United States, pharmaceutical and biotechnology companies, medical institutes, and foundations. Predicted revenue growth during this time period will be due to many factors: the increasing prevalence of chronic diseases, the rising number of biologics, the need for personalized medicines and orphan drugs, as well as increasing demand for clinical trials in developing countries. The globalization of clinical trials, increased use of technology to meet stringent regulations, and increased use of contract research organizations by pharmaceutical companies to organize and conduct clinical trials are additional factors contributing to future growth. In 2019, oncology clinical trials accounted for the largest share of revenue, 23.2%, followed by trials for drugs to treat central nervous system conditions, autoimmune diseases/inflammation, and diabetes. As of August 4, 2020, there were more than 347,000 studies registered at ClinicalTrials.gov, located in all 50 states and 216 countries. Recruiting studies totaled 52,249.
The coronavirus pandemic has disrupted clinical trials for a variety of disease treatments. The number of patients enrolled in clinical trials in March 2020 dropped 65% worldwide from a year earlier. Some studies have halted altogether as medical center resources are diverted to treating patients with COVID-19 and biotechnology firms divert resources to develop therapeutics and vaccines to treat and prevent the spread of the virus.
As of May 2020, interventional design studies accounted for 79% of all registered studies, the majority being for drugs and biologics. Expanded access trials, also known as compassionate use trials, are predicted to grow at the fastest rate, a compound annual growth rate (CAGR) of 5.2%, through 2027. These trials are a way for patients with serious diseases to obtain treatment outside of clinical trials when other treatments prove ineffectual. For example, many oncology drugs considered as a part of expanded access trials are administered to patients before getting FDA approval. As of May 2020, there were 20 therapeutics for COVID-19 in Phase II and Phase III expanded access trials.
North America accounted for 51.2% of the market in 2019 and is expected to maintain its majority share due to increasing research and development and adoption of new technologies. The Asia-Pacific region is expected to grow the fastest, at a CAGR of 6.1%. A growing number of biotechnology firms are seeking to recruit patients for their COVID-19 trials in this region due to its large patient pool and fast-track trial procedures.
Some major companies in the clinical trial market include ICON Plc, Wuxi AppTec, PRA Health Sciences, SGS SA, Syneos Health, Eli Lilly and Company, Novo Nordisk A/S, Pfizer, Clinipace, IQVIA, PAREXEL International Corp., Pharmaceutical Product Development LLC, and Charles River Laboratory.
1 We concentrate on investigational medications in the text, but the market size figures include revenue for all types of clinical trials: drug, biologic, behavioral, clinical procedure, and device studies.
2 According to a June 16, 2020 U.S. Department of Health & Human Services press release, there are more than 100 COVID-19 vaccines in development.
Sources: “Clinical Trials Market Size, Share & Trends Analysis Report by Phase (Phase I, Phase II, Phase III, Phase IV), by Study Design (Interventional, Observational, Expanded Access), by Indication, and Segment Forecasts, 2020 – 2027,” Grand View Research Report Summary, May 2020 available online here; “Clinical Trials Market Size Worth $69.8 Billion by 2027 | CAGR: 5.1%: Grand View Research, Inc.,” CISION PR Newswire, February 18, 2020 available online here; “What is Clinical Research?” WCG CenterWatch available online here; “Clinical Trials,” PhRMA available online here; “Trends, Charts, and Maps,” ClinicalTrials.gov, National Institutes of Health, U.S. National Library of Medicine, August 4, 2020 available online here; “The Impact of Industry Sponsored Clinical Trials,” PhRMA available online here; Jeff Craven, “COVID-19 Vaccine Tracker,” Regulatory Focus, Regulatory Affairs Professionals Society, July 30, 2020 available online here; “Trump Administration Announces Framework and Leadership for ‘Operation Warp Speed,'” U.S. Department of Health & Human Services Press Release, May 15, 2020 available online here; “Fact Sheet: Explaining Operation Warp Speed,” U.S. Department of Health & Human Services Press Release, June 16, 2020 available online here; Bryan Hill, Pratik Maroo, Venu Mallarapu, and Vidya Viswanathan, “Reinventing Clinical Trials for a Stay-at-Home World,” Perspectives, June 22, 2020 available online here; Ben Fidler, “A Guide to Clinical Trials Disrupted by the Coronavirus Pandemic,” BioPharma Dive, May 15, 2020 available online here.
Image source: Belova59, “laboratory-medical-medicine-hand-3827745,” Pixabay, November 15, 2018 available online here.