The Future of CROs: Insights from My Live Conversation with Joel White on Publicly Traded Q3 CRO Earnings

Last week, I had the pleasure of hosting a live podcast with @joel white, founder of Market Cap Consulting, one of the sharpest minds analyzing the CRO landscape today. This wasn’t our first conversation, but it was certainly one of the most comprehensive and thought-provoking discussions we’ve had about the state and future of contract research organizations (CROs).

Joel’s deep industry knowledge and analytical approach always make for an engaging dialogue, and this session didn’t disappoint. We unpacked everything from the viability of CROs to the latest industry trends, including cancellations, site networks, and the shifting role of technology. Here are the key takeaways—and why they matter to anyone in the clinical research ecosystem. His full 25 slide deck can be found here.

Are CROs Here to Stay?

Joel made a compelling case in a previous conversation that CROs are not going anywhere, at least not in the near term. While some more casual industry observers such as myself may predict a cloudier future for CROs, Joel provided valuable context on why their position remains relatively secure. He acknowledged the challenges—like the rise in cancellations and delays, the shift toward functional service provider (FSP) models, and the emergence of direct sponsor-to-site relationships—but emphasized that CROs have proven their ability to adapt.

The takeaway is clear: while the CRO model is under pressure, they are still deeply embedded in the clinical research value chain. Sponsors rely on them for full-service capabilities, especially in complex trials. However, CROs that fail to innovate or adapt could face challenges in maintaining their relevance. Additionally, Site Networks are only getting more sophisticated and powerful, for whatever that's worth.

Cancellations and Delays: A Growing Pain

One of the standout points of our discussion was the rise in cancellations and delays across the industry. This issue affects every CRO, but it’s particularly painful for larger organizations that rely on smooth operations to manage their extensive resources.

Joel explained that most CROs expect cancellations to impact 10-20% of their booked work. However, Q3 saw widespread cancellations that exceeded those expectations. MedPace was one of the first CROs to raise concerns earlier this year, but by Q3, the issue had spread across nearly every major CRO, with only Fortrea (formerly Covance) bucking the trend.

Why does this matter? For CROs, cancellations throw off resource planning and profitability. They staff based on projected workloads, so any significant deviation creates inefficiencies. It’s an operational headache and a profitability killer. It also is a leading indicator for further possible job cuts.

The Changing Role of CROs in Site Selection

A surprising yet anecdotal trend I shared during the podcast is how site selection is increasingly bypassing CROs. Historically, sites like mine worked hard to get on CRO databases, hoping to become preferred sites. Now, sponsors and even tech platforms like @inato are offering studies directly to sites. Interestingly enough, my SOS Save Our Sites colleagues Brad Hightower Judy Galindo Monica Cuitiva B.S, B.A ., CRC Ashley Margo, BS Chris Sauber discussed this amongst a few other topics on a livestream of their own today. (Shameless plug: get your Black Friday discounts now!)

This shift in terms of increased sponsor study involvement diminishes the importance of CROs in certain areas of study management, especially in site selection. For site owners, this creates an opportunity to build direct relationships with sponsors. For CROs, it’s a warning sign: their traditional role in connecting sites and sponsors may no longer be as critical.

Site Networks Are Redefining the Landscape

Site networks like@Velocity are changing the game. Joel highlighted how Velocity recently placed 55 sites on a single trial and even offered risk-sharing agreements directly with sponsors. These networks are leveraging their scale to bypass CROs and negotiate directly with sponsors.

I’ve seen this trend firsthand. Large site networks are gaining leverage, offering sponsors faster recruitment timelines and greater efficiencies. While smaller, independent sites can still thrive, the growing dominance of site networks means they’ll need to differentiate themselves through niche expertise or superior quality.

FSP Models and Tech Innovation

Joel and I discussed the stable yet consistent use of FSP models, particularly among big pharma sponsors. This approach allows sponsors to contract specific services, such as data management, while retaining control of other aspects of the trial. While FSP models are cost-effective, they often result in lower profit margins for CROs compared to full-service contracts.

On the tech side, we contrasted the trajectories of two industry giants: Veeva Systems and Medidata Solutions . Veeva is aggressively expanding its offerings, setting a goal to double revenue by 2030 through innovation in life sciences. Meanwhile, Medidata is struggling with stagnant revenues, highlighting the deflationary pressures of tech in clinical research.

The key takeaway? Technology is a double-edged sword. Companies that innovate can thrive, but those that fail to adapt risk becoming obsolete.

Lessons for Stakeholders

1. Adaptability Is Key: CROs and site networks must remain flexible to survive. Whether it’s adopting new technologies, diversifying therapeutic areas (live by vaccine revenue, die by vaccine revenue), or embracing new business models, adaptability is crucial.
2. Build Direct Relationships: For sites, forging direct connections with sponsors is more important than ever. Strong sponsor relationships can help bypass the traditional gatekeepers.
3. Diversify Revenue Streams: Relying too heavily on volatile areas like vaccine studies can leave sites and CROs vulnerable. A balanced portfolio ensures long-term stability.
4. Stay Informed: Whether you’re a sponsor, CRO, site, or tech vendor, staying on top of market trends is essential. Joel’s LinkedIn newsletter is an excellent resource for cutting through the noise.

Why This Matters

This podcast reinforced the importance of understanding the evolving clinical research landscape. CROs remain integral, but their role is changing. Site networks and tech vendors are challenging the status quo, and sponsors are exploring new ways to manage trials.

As someone who owns research sites, I’m focused on building direct relationships with sponsors, embracing technology, and diversifying our portfolio. These strategies ensure stability and growth, even in a rapidly changing industry.

If you missed the live podcast, you can catch the replay.

Let’s continue the conversation: What trends are you seeing in clinical research? How are you adapting to the changes? Share your thoughts in the comments.

P.S. Like, share, and subscribe to stay updated on the latest insights in clinical research! Also, help me out and get yourself some cheap SOS Save Our Sites tickets and book your hotel stay at the Omni.