A contract research organization (CRO) is an organization that specializes in clinical-trial services, which allows for reduced cost of hiring and maintaining a staff for clinical trial services (Mirowski & Van Horn, 2005). Much like other companies which specialize in specific functions that help businesses such as call centers or benefits management, CROs reduce the cost but also increase a company’s efficiency in areas of drug development.
Drug companies are able to focus their resources on drug development and not take on the cost of trials which can be tremendously expensive and inefficient when managers are not qualified to manage these trials. The CRO also provides the benefit of being able to work the complete trial phase and dealing with FDA/EMA marketing approval (Mirowski & Van Horn, 2005). As well, the CRO is capable of handling foundations, research institutions, and universities, in addition to governmental organizations.
There are some disadvantages to using CROs. The largest disadvantage is a loss of control of the clinical trial. The use of a CRO means that the CRO will perform the trial, and this places a large amount of faith in the company performing it and if mistakes are made this can cost the drug company large amounts of money (Mirowski & Van Horn, 2005). There is also an issue CROs existing in a fragmented industry. There are approximately 10 firms controlling over 50% of the market (Brennan, 2013). This creates a problem in which CROs are constantly be acquired or going out of business (Brennan, 2013). It is possible for a firm to hire a CRO and have the issue of the firm being bought by a rival while in a clinical trial.
Brennan, Z. (2013, June 20). CRO Industry Could See More Consolidation, Experts Say. Retrieved from Outsourcing Pharma: http://www.outsourcing-pharma.com/Clinical-Development/CRO-Industry-Could-See-More-Consolidation-Experts-Say
Mirowski, P., & Van Horn, R. (2005). The contract research organization and the commercialization of scientific research. Social studies of science , 35 (4), 503–48.