Functional Service Providers (FSP) Market Research Report—Global Forecast till 2030

Functional Service Providers Market Research Report Information By Type (Clinical monitoring, Medical Writing, Data management, Pharmacovigilance, Biostatistics, Programming, and Others), By Stage (Clinical Development and Post Approval), By Application (Biopharma Companies, Biotech Companies, Medical Devices Companies and Research centers and Academic Institutes) and Region (North America, Europe, Asia-Pacific, and Rest of the World)—Forecast till 2030

ID: MRFR/HC/9296-HCR | | Region: Global | 141 Pages         

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Global Functional Service Providers Market Overview


Functional Service Providers market size was valued at USD 13.48 billion in 2021. The functional service providers market industry is projected to grow from USD 14.49 Billion in 2022 to USD 25.82 billion by 2030, exhibiting a compound annual growth rate (CAGR) of 7.49% during the forecast period (2022 - 2030). The increasing R&D investments, rising number of clinical trials, and rise in FSP outsourcing in drug development are factors driving the market growth.
Functional Service Providers Market Overview
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review


Functional Service Providers Market Trends



  • Rise in FSP outsourcing in drug development to boost the market growth


Drug development is the process of bringing a new pharmaceutical drug to the market with the approval of appropriate regulatory authorities. It is an expensive process and a long and high-risk business, which could take nearly 10–15 years and is associated with a high attrition rate. Pharmaceutical companies are under intense pressure from their shareholders to improve efficiency and productivity while also managing costs.


Furthermore, FSPs enables companies to engage discrete expert services, including medical writing, biostatistics, or clinical monitoring, when and where they need them. These providers help companies’ lower development costs by reducing redundant activities. FSPs offer companies access to the expertise and skills a company may not have in-house. However, they help accelerate drug development timelines and reduce overall costs to increase returns on investments. Hence, the rise in FSP outsourcing in drug development is expected to drive the growth of the  functional service providers’ market revenue during the forecast .


Figure 1: Ratio of Clinical Services Outsourced Vs. In-house Ratio (2017)
Ratio of Clinical Services Outsourced Vs. In-house Ratio
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review


Sponsors have increased the outsourcing of clinical development services to vendors, overcoming obstacles along the way, with more drivers than restrictions. Only 38 to 40% of clinical development services are typically performed internally, with outsourcing accounting for the other 64 percent. Additionally, through strategic alliances and functional outsourcing, more than 60% of sponsors have expanded the amount of in-house tasks they outsource. The functional service provider (FSP) model is chosen for regulatory services, staffing, and clinical IT, whereas the strategic partnership approach is highly adopted for clinical data management, biostatistics, Phase 1 through 4 trials, clinical trial supplies, and central labs. Both models were employed by the majority of sponsors, but one was more frequently adopted than the other.


Functional Service Providers Market Segment Insights


Functional Service Providers Type Insights


The functional service providers market segmentation, based on type, includes clinical monitoring, medical writing, data management, pharmacovigilance, biostatistics, programming, and others. The clinical monitoring segment held the majority share in 2021 contributing to around ~8.29% with respect to the functional service providers market revenue. This is primarily owing to the rising number of clinical trials. In addition, advanced technological solutions will also continuously review & analyze data and provide insights that detect and minimize risks across sites, patients, and the study itself. Moreover, companies such as Parexel (US) and IQVIA (US) are offering clinical monitoring services. Furthermore, the increase in the number of research-based activities by biopharmaceutical and pharmaceutical companies across the globe is fueling the growth of the market.


October 2021: Rho Inc. (US) partnered with Medidata (US), a Dassault Systèmes company to enhance its clinical trial platform. This strategic partnership aims to offer rapid reporting of cross domain and cross-study data in decentralized trials


Functional Service Providers Stage Insights


The functional service providers market segmentation, based on stage, includes clinical development and post-approval. The clinical development segment dominated the market in 2021 and is projected to be the faster-growing segment during the forecast period, 2022-2030. This is because they are responsible for gathering information on a product's efficacy and providing information on its safety. FSPs help biotechnology & biopharmaceutical companies at the clinical development stage to provide effective drug development methods and techniques for developing innovative new medicines. Hence, biotechnology & biopharmaceutical companies sponsor outsourcing clinical development processes to functional service providers to gain flexibility, speed the drug development process, and availability of expertise teams, technology, and clinical study protocols. Hence, the rising number of clinical trials positively impacts market growth.


Functional Service Providers Application Insights


The functional service providers market data has been bifurcated into biopharma companies, biotech companies, medical devices companies, and research centers and academic institutes. The biopharma companies segment dominated the market in 2021 and is projected to be the fastest-growing segment during the forecast period, 2022-2030. Furthermore, the growth of the biopharmaceutical companies’ segment in the market is mainly due to the rapidly expanding biopharmaceutical industry and the growing use of FSPs to perform the full range of clinical trial activities. According to Applied Clinical Trials Research, the use of FSP by biopharma businesses is increasing at a rate of more than 13% each year. For Instance, according to the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA), the research-based biopharmaceutical industry spends USD 179 billion on R&D per year, and 23 of the 50 leading  R&D firms were biopharmaceutical companies in 2018. Hence, rising R&D investments in the biopharmaceutical industry are likely to be the key factor driving the growth of this segment in the  market.


August 2020: Parexel International Corporation (US) extended its long-term partnership with Pfizer (US) and has signed master service agreement. Under the agreement, the company is liable to offer clinical development services and functional service provider model for therapeutic applications.


Figure 2:  Functional Service Providers Market, By Application, 2021 & 2030 (USD Billion)
Functional Service Providers Market, By Application, 2021 & 2030
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review


Functional Service Providers Regional Insights


By Region, the study segments the market into North America, Europe, Asia-Pacific, and the Rest of the World. The North America functional service providers market accounted for USD 5.69 billion in 2021 and is expected to exhibit a 5.06% CAGR during the study period. This is attributed to the developed healthcare infrastructure, a high number of clinical trials, and the presence of major key players in the region.


Further, the major countries studied are the U.S., Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.


Figure 3:  FUNCTIONAL SERVICE PROVIDERS MARKET SHARE BY REGION 2021 (%)
FUNCTIONAL SERVICE PROVIDERS MARKET SHARE BY REGION 2021
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review


functional service providers market accounts for the second-largest market share due to the stringency of regulatory bodies such as the European Medicines Agency (EMA), there is a high demand for FSP services to provide expertise for higher chances of product approval in the region. Further, the Germany functional service providers market held the fourth place for the market share, and the UK Functional service providers market was the fastest-growing market, and which is in fifth place in the European region.


The Asia-Pacific functional service providers market is expected to grow at a CAGR of 19.97% from 2022 to 2030. This is due to various factors such as a high patient population, reduced costs of conducting trials, and favorable regulatory policies. Moreover, China functional service providers market held the largest market share, and the China functional service providers market was the fastest-growing market in the Asia-Pacific region. Furthermore, Africa Functional service providers market was also the fastest-growing market, which provides growth opportunities in the region. For instance, in April 2021, the largest clinical trial in Africa for novel COVID-19 treatment called ANTICOV clinical trial was initiated across 13 African countries for a combinational therapy of ciclesonide and nitazoxanide. Moreover, government initiatives to develop regional healthcare infrastructure and capabilities are expected to provide growth for the regional market in the future


For instance, The R&D expenditure of China is growing at a significant rate and is expected to surpass the US R&D spending by 2025 to become the  leader in functional service providers market. China is currently the second-highest spender in R&D, after the US. Moreover, countries in the APAC region have well-established pharmaceutical markets compared to those ly. For instance, according to IQVIA (US), in 2020, China and Japan held the second and third spots, respectively, in the top 10 pharmaceutical markets rankings. This, in turn, provides growth opportunities for the APAC functional service provider’s market.


The Rest of the World comprises the Middle East, Africa, and Latin America. The rest of the world region is witnessing restricted growth due to inadequate healthcare infrastructure and the presence of poor economies. However, countries in the Middle East are the key contributors to the growth of the overall regional market. For instance, Israel, a Middle Eastern country, was the highest spending country for R&D ly (by the percentage of GDP) in 2019, with an R&D expenditure of 4.93% of its GDP


Functional Service Providers Key Market Players & Competitive Insights


presence of major market players in the  functional service providers (FSP) market is characterized by the presence of many international, regional, and local players. Increasing R&D investments, rising number of clinical trials, lower operational costs and improved service quality, and the rise of FSP outsourcing in drug development make the FSP market lucrative. To expand their reach and optimize their operating costs, the major players focus on obtaining regulatory authorizations from government agencies for their products and emphasize acquisitions and product launches to gain a substantial market share.


One of the primary business strategies adopted by manufacturers in the  functional service providers industry to benefit clients and expand the functional service providers market sector is to manufacture locally to reduce operating costs.


IQVIA Inc (US) is a provider of information, innovative technical solutions, and clinical research services (IQVIA). The business develops a range of solutions for the healthcare sector, including clinical development, commercialization, and technologies that have a significant impact on healthcare outcomes, using data and research. In addition to serving these clients, IQVIA also provides services to government agencies, healthcare organizations, payers, researchers, payer groups, and biotech, medical device, and pharmaceutical companies. For instance, in February 2020, IQVIA Inc. launched Avacare Clinical Research Network to augment the opportunities for clinical trials and research options. The Avacare Network is expected to accelerate clinical trials, reduce the cost of care, and advance research to match consumer requirements.


Also, Parexel International Corporation. (Parexel) (US) is a  clinical research organization that offers innovative solutions and services for clinical research. The company offers solutions related to clinical development for translational medicine, clinical data management, decentralized clinical trials, clinical supply chain management, risk-based quality management, and biostatistics. The other services offered by the organization include outgoing services, regulatory affairs consulting, clinical development strategy & planning, compliance consulting, regulatory outsourcing, clinical trial regulatory services, medical communication services, and expanded access services.  In August 2020, Parexel International Corporation (US) extended its long-term partnership with Pfizer (US) and signed a master service agreement. Under the agreement, the company is liable to offer clinical development services and a functional service provider model for therapeutic applications.


Key Companies in the Functional Service Providers Market includes



  • IQVIA Inc (US)

  • Laboratory Corporation of America Holdings (US)

  • ICON PLC (Ireland)

  • KPS Life, LLC (US)

  • WuXi AppTec,LTD (China)

  • PPD Inc. (US)

  • Parexel International Corporation (US)

  • Quanticate International Limited (UK)

  • BioPoint Inc (US)

  • Rho, Inc (US)


Functional Service Providers Industry Developments


October 2021: Rho Inc. (US) partnered with Medidata (US), a Dassault Systemes company to enhance its clinical trial platform. This strategic partnership aims to offer rapid reporting of cross-domain and cross-study data in decentralized trials.


August 2020: Parexel International Corporation (US) extended its long-term partnership with Pfizer (US) and has signed a master service agreement. Under the agreement, the company is liable to offer clinical development services and a functional service provider model for therapeutic applications


February 2020: IQVIA Inc.(US), launched Avacare Clinical Research Network to augment the opportunities for clinical trials and research options. The Avacare Network is expected to accelerate the clinical trials, reduce the cost of care, and advance research to match the consumer requirements


January 2019: Quanticate launched QVigilance to offer dedicated pharmacovigilance (PV) and risk management services. QVigilance aims to support small and medium enterprises from clinical trials to establishing compliant pharmacovigilance systems.


June 2019: Parexel International Corporation (US) launched Enhanced Integrated FSP Model in Boston and Durham to accelerate the development and delivery of innovative new therapies.


Functional Service Providers Market Segmentation


Functional Service Providers Type Outlook



  • Clinical Monitoring

  • Medical Writing

  • Data Management

  • Pharmacovigilance

  • Biostatistics

  • Programming

  • Others


Functional Service Providers Stage Outlook



  • Clinical Development

  • Post Approval


Functional Service Providers Application Outlook



  • Biopharma Companies

  • Biotech Companies

  • Medical Devices Companies

  • Research Centers and Academic Institutes


Functional Service Providers Regional Outlook



  • North America

    • US

    • Canada



  • Europe

    • Germany

    • France

    • UK

    • Italy

    • Spain

    • Rest of Europe



  • Asia-Pacific

    • China

    • Japan

    • India

    • Australia

    • South Korea

    • Australia

    • Rest of Asia-Pacific



  • Rest of the World

    • Middle East

    • Africa

    • Latin Americs





Report Scope:

Report Attribute/Metric Details
Market Size 2021 USD 13.48 billion
Market Size 2022 USD 14.49 billion
Market Size 2030 USD 25.82 billion
Compound Annual Growth Rate (CAGR) 7.49% (2022-2030)
Base Year 2021
Forecast Period 2022-2030
Historical Data 2018 & 2020
Forecast Units Value (USD Billion)
Report Coverage Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
Segments Covered Type, Stage, Application, and Region
Geographies Covered North America, Europe, Asia Pacific, and the Rest of the World
Countries Covered The U.S, Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil
Key Companies Profiled IQVIA Inc (US), Laboratory Corporation of America Holdings (US), ICON PLC (Ireland), KPS Life, LLC, WuXi AppTec, LTD (China), PPD Inc. (US), Parexel International Corporation (US), Quanticate International Limited(UK), BioPoint Inc (US), and Rho, Inc (US)
Key Market Opportunities Biopharma and biotech’s digital transformation
Key Market Dynamics Increasing R&D investments Rising number of clinical trials, and Rise in FSP outsourcing in drug development


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Frequently Asked Questions (FAQ) :

The functional service providers market is anticipated to reach USD 25.82 billion at a CAGR of 7.49% during the forecast period of 2022 to 2030

IQVIA Inc. (US), Laboratory Corporation of America Holdings (US), Parexel International Corporation (US), Icon Plc (Ireland), PPD Inc.(US) PPD Inc.(US), Quanticate International Limited (UK), BioPoint Inc.(US), RHO, Inc. (US), Wuxi AppTec Co., Ltd.(China), KPS Life, LLC (US). are the key players in the market of Functional Service Providers (FSP)

The U.S functional service providers market is anticipated to reach USD 10.44 billion at a CAGR of 6.98% during the forecast period of 2022 to 2030

The functional service providers market is expected to register a CAGR of 7.49% during the forecast period of 2022 to 2030.

The North America functional service providers market accounted for USD 5.69 billion in 2021 and is expected to exhibit a 5.06% CAGR during the study period.

IQVIA Inc (US), Laboratory Corporation of America Holdings (US), ICON PLC (Ireland), KPS Life, LLC (US), WuXi AppTec,LTD (China), PPD Inc. (US), Parexel International Corporation (US), Quanticate International Limited (UK), BioPoint Inc (US), and Rho, Inc (US)

The clinical monitoring segment held the majority share in 2021 contributing to around 8.29 % with respect to the functional service providers market.

The clinical development segment dominated the market in 2021 and is projected to be the faster-growing segment during the forecast period, 2022-2030.