The CRO landscape that mid-market biotechs operate in has consolidated meaningfully over the last three years. The operating implications are now becoming visible in the studies running today.
CRO consolidation has shifted the negotiating dynamic, service quality variability, and optionality of the mid-market biotech-CRO relationship — and biotechs that have not adjusted their CRO strategy are quietly accepting worse outcomes.
What Consolidation Has Produced
The CRO market is more concentrated than at any point in the last fifteen years. The largest CROs are larger, the mid-tier CROs are being acquired, and the specialist CROs are increasingly part of platform groups. For mid-market biotechs, this produces three specific dynamics.
First, less negotiating leverage — particularly for biotechs whose programmes are not large enough to be strategic for the largest CROs. Second, more variable service quality — large CRO platforms vary internally in delivery quality, and the project team a biotech actually gets matters more than the platform brand. Third, less optionality — switching CROs mid-programme has become harder and more expensive.
What Mid-Market Biotechs Need to Do Differently
The CRO selection process has to become more sophisticated. Choosing the CRO platform is less consequential than choosing the project team within it — and most biotechs are not yet running selection that way. Reference checking has to focus on the specific team and recent experience, not the platform's general reputation.
Contract structures need to include service-level protections that bite. Switching costs need to be modelled into the original selection decision. And alternative CRO relationships should be maintained even when not active, to preserve optionality. Mid-market biotechs that approach CRO relationships this way are getting consistently better outcomes than those treating CRO selection as a procurement exercise.
Three Operating Moves
For biotech CEOs and heads of clinical operations, three moves matter most. First, run CRO selection at the project-team level, with structured reference checking on the team you will actually get. Second, structure contracts with service-level commitments that have teeth — not just SLA language but commercial consequences.
Third, build and maintain relationships with at least two CRO partners actively, even when only one is engaged on the active programme. The cost of doing this is modest. The optionality it preserves is substantial.
What to do next
- Select CROs at project-team level, not platform level
- Structure contracts with commercially meaningful service-level commitments
- Maintain active relationships with at least two CRO partners
- Model switching cost into the original selection decision, not the renewal
Grant & Graham helps biotech CEOs, COOs, and heads of clinical operations address exactly this kind of challenge. Our operating-model advisory and senior leadership for biotech scale-ups is built for organisations facing a CRO relationship that is producing variable service quality without clear remedies. Email Andrew Collins or visit grant-graham.co.uk to discuss.
