Combined sales of Korean contract research organizations surpassed those of foreign CROs for the first time in 2020, industry data showed.

The robust sales growth of local CROs is attributed to Korean drugmakers and biotech firms’ aggressive drive for new drug development. However, to enhance their growth momentum, experts said the government should improve legal and institutional systems for the CRO industry.

According to Korea National Enterprise for Clinical Trials’ (KoNECT) 2021 survey on Korean CROs, the total revenues of local CROs recorded 284.4 billion won ($237.8 million) in 2020, surpassing that of foreign CROs at 269.8 billion won.

It is the first time that Korean CROs outperformed foreign peers in sales.

In 2014, total sales of local CROs were 102.3 billion won, only about 53.3 percent of those by foreign CROs (191.7 billion won). However, domestic CROs’ sales exceeded those of foreign peers in six years.

The survey showed that the Korean CRO market achieved an annual growth rate of 11.1 percent, from 294.1 billion won in 2014 to 554.2 billion won in 2020.

In 2020, revenues of Korean CROs surged 10.1 percent year-on-year. The pharmaceutical industry’s efforts to develop Covid-19 treatments and vaccines seemed to have positively affected the sales of local CROs, observers said.

However, Korean drugmakers were more satisfied with foreign CROs than local ones. The survey gave 60 points to foreign CROs in terms of satisfaction level and 59.4 to local CROs.

KoNECT said the government needs to revise the institutional system to help Korean CROs grow.

For example, the Korean Standard Industry Classification does not classify CRO as a separate industry, making it difficult to identify CRO statistics such as the number of companies and employees, KoNECT noted.

“CROs are growing even in a poor institutional environment. However, if the country’s systematic management does not support their efforts, their growth will hit a limit inevitably,” KoNECT President Bae Byoung-jun said.

He urged Statistics Korea to establish a CRO industry section in the Korean Standard Industry Classification to identify the CRO industry status and thoroughly lay the foundation for policymaking.