Outsourcing

Firms outsourcing clinical research for a number of different reasons. The theory of comparative advantage underlies CRO, as firms in other countries might be able to do the research more effectively, or more efficiently. Often, CRO done in order to save money, as is particularly the case with India. In other instances, the outsourcing is done to firms that have developed particular specialties in research (Piachaud, 2002).

In India, firms are competing for jobs doing clinical research, and that competition has driven down costs. This is important for the industry, because the cost of new drug approval has reached over $1 billion, in part because of the high costs associated with clinical research. So greater competition in research, and using lower-cost labor, has helped companies contain that cost (Jayaraman, 2004). Different payers also make it easier to recruit people for trials in some countries, thus lowering the time spent...
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