Lilly outpacing the industry in accelerating its clinical research outsourcing

The CRO market was recently estimated at $16.3B for 2006 by Turner Investment Partners with 12.6% compounded annual growth through 2011.  Significant growth drivers are the focus on cost control and emphasis of internal efforts on developing the drug pipeline.This week, Eli Lilly announced three deals with Covance, Quintiles, and i3 that easily could more than double their current level of outsourcing.

• The biggest of these three deals by far is the 10-year, $1.6B deal with Covance selling them their Greenfield Indiana facility for $50M and assuming 260 Lilly employees.  According to Forbes, the Covance CEO says they already do "about $70 million in work annually for Lilly. The new contract will lock that in and add $90 million annually."
• U.S. clinical-trial monitoring work will be transferred to Quintiles, another large CRO.
• Data management will be transferred to i3, a CRO subsidiary of United Healthcare.

A few years ago, the Wyeth made a big splash in the industry when they announced large deals with Accenture for clinical data management and RPS for field monitoring.  The 10-year Accenture deal included 175 Wyeth employees.Look for other big outsourcing announcements like this, not to mention all the offshore activities being established by big pharma.