Contract Research Organizations (CROs) sit at a pivotal moment in their evolution. Economic constraints, regulatory shifts, and technological advancements are forcing them to rethink their value proposition. On a recent LinkedIn Live, Greg Licholai, Chief Medical and Innovation Officer at ICON, and Derk Arts, CEO of Castor, tackled a pressing question: Do CROs need to reinvent themselves in 2025?
The Macroeconomic and Regulatory Pressures Shaping CROs
The conversation kicked off with a broad look at the forces reshaping drug development. Pharma companies are feeling the pressure—rising R&D costs, shifting reimbursement structures, and increasing competition mean that every dollar spent on clinical trials must count.
“There’s a lot happening at a macro level globally,” Arts noted. “The ability of society to reimburse ever-expanding and expensive healthcare is under scrutiny.”
Licholai echoed this sentiment, emphasizing how financial and regulatory pressures, such as the Inflation Reduction Act, are influencing drug development. “Pricing for drugs is shifting, and that directly impacts the therapeutic areas that get investment,” he explained.
A key takeaway? The current system isn’t just going through another cyclical adjustment—it may be facing a more systemic transformation. CROs must anticipate these shifts and rethink their positioning within the industry.
FSP vs. FSO: The Never-Ending Debate
One of the most debated topics in CRO strategy is the pendulum swing between Functional Service Provision (FSP) and Full-Service Outsourcing (FSO).
“This shift is cyclical,” Arts observed. “At any given time, we see pharma centralizing or decentralizing control over clinical trials. It’s driven by leadership changes, economic factors, and perceived control over costs.”
Licholai agreed but highlighted that the economics of outsourcing models are largely a wash. “If you go to the extremes—zero outsourcing or 100% outsourcing—the costs are pretty much the same. The real reasons to outsource are about efficiency, scalability, and expertise.”
In other words, there’s no silver bullet. Whether CROs succeed under an FSP or FSO model depends more on execution than on the model itself.
The Rise of Site Networks and RWE
The industry is also witnessing the rapid consolidation of clinical trial sites. Large site networks are streamlining operations, making patient recruitment and data collection more efficient. But does this pose a threat to CROs?
“Well-run site networks can be a tremendous asset,” Licholai noted. “The real challenge in clinical research is patient recruitment. Anything that helps investigators conduct trials more efficiently is a net positive.”
At the same time, real-world evidence (RWE) is gaining traction. With smaller Phase 2/3 trials and larger real-world studies post-approval, RWE could change the fundamental structure of clinical trials.
“We’re seeing a shift where real-world trials could be incorporated earlier,” Arts suggested. “This could make trials cheaper and allow for more diverse patient populations.”
However, both agreed that regulatory bodies remain cautious. “The concern is that adding real-world data too early could slow down approvals due to increased variability,” Licholai pointed out. “But as RWE becomes more accepted, it could significantly reduce the cost of drug development.”
The AI Factor: Hype or Reality for CROs?
AI is one of the most talked-about trends in clinical trials, but what does it really mean for CROs?
“I’m a huge believer in AI, but also a realist,” Arts stated. “Right now, we’re in the early phases. The FDA’s guidance only covers model development, not practical applications in clinical trials.”
Licholai expanded on this, suggesting that AI’s most immediate impact will be in automating routine tasks, such as medical writing, site selection, and patient matching. However, the idea of AI-driven Clinical Research Associates (CRAs) remains a distant prospect.
“The workloads in clinical operations are enormous,” Arts pointed out. “Burnout among site coordinators and CRAs is high. If AI can help with monitoring and compliance, that’s where the industry could see real benefits.”
Another major question is data ownership. As AI models require vast datasets to be effective, sponsors may want more control over the metadata generated by CROs.
“This ties back to the FSP vs. FSO debate,” Arts noted. “If sponsors want deeper insights from AI, they might push for more control over data collection and analysis.”
The Road Ahead for CROs
So, do CROs need to reinvent themselves? The consensus is that evolution—not revolution—is the path forward.
“The fundamentals of clinical research aren’t changing overnight,” Licholai said. “But CROs that embrace technology, build stronger site partnerships, and adapt to new trial models will be in the best position.”
Arts agreed, but with a note of caution: “CROs can’t afford to be complacent. The biggest risk is sticking too rigidly to legacy processes while the industry moves on.”
Ultimately, the discussion made it clear that the future of CROs depends on their ability to be proactive rather than reactive. Whether through site network partnerships, AI adoption, or new outsourcing models, those who take strategic risks will be the ones defining clinical research in 2025 and beyond.
Did you miss the live conversation? Watch the full conversation on LinkedIn Live. What do you think—are CROs evolving fast enough, or do they need a complete reinvention?
Share your thoughts in the comments on LinkedIn.