Large CROs garner 57% of the post-marketing studies currently being outsourced, while another 25% of that work is awarded to the few firms that specialize in safety. The remaining 19%? That’s scattered among numerous mid-sized CROs.

That’s according to a new report by drug development-focused market research firm Industry Standard Research (ISR) that included responses from 68 sponsors that either conduct or outsource post-marketing safety studies.

“Sponsors show a real preference for using those large service providers, but in close second place is that specialty community, and what gets lost are the mid-sized CROs,” said ISR CEO Kevin Olson. “They don’t have the brand cache or the built-in confidence associated with their brands that the big five CROs do, and they also don’t have the strength that comes from specialty providers.”

The survey showed the leader in providing post-marketing services was Quintiles.

“Nobody gets fired for hiring IBM,” said Olson. “I think that’s what’s going on here.”

Neal McCarthy, managing director for investment banking firm Fairmount Partners, said the FDA has been requesting post-marketing studies for years but did not have clear regulatory authority to require them until 2007, when the Prescription Drug User Fee Act (PDUFA) IV was signed into law. Now, about half of all drug approvals include post-marketing surveillance requirements.

When choosing who to award post-marketing safety work, McCarthy said sponsors seem to go with the CRO used for earlier phases.

“Safety studies are generally purchased by the same people who purchase CRO work,” he said. “For large companies using large CROs, they would remember those names for post-marketing safety work.”

But Olson said that doesn’t happen as often as CROs would like. “The service provider community always wants that to happen, but they struggle mightily to cross-sell phase-to-phase,” he said. “To be honest, it’s just a matter of different decision makers handling outsourcing within a company for different phases.”

While phase I through III trials have been outsourced for two decades, sponsors have been outsourcing post-marketing safety studies for only a few years. Anxious about the importance of safety, many still do their post-marketing work in-house, and those who outsource it are very conservative about who they choose, said Olson.

“The hypothesis is that the phase III trials are big and everybody can credibly do them, but there are skills and expertise that are unique to post-marketing safety,” said Olson. “That takes the specialty providers up a notch.”

The survey, titled “Post-marketing Safety Market Dynamic,” is ISR’s first to zero in on who in the CRO community is winning the post-marketing work, but Olson said it won’t be the last. He plans to revisit the topic in 12 to 18 months to track changes. Sponsors were paid a stipend for their participation.

Suz Redfearn