The drug development industry has come along way in the last two decades. In the 1980s and early 1990s, when the focus was on cost-savings and capacity management, contract research organizations (CROs) were used primarily as spillover capacity. The work was done and often done well, but our relationship with our pharmaceutical clients was tactical, and CRO growth rates and profitability were volatile. From roughly 2000 to 2005, biotechnology and specialty pharmaceutical companies began to use CROs more strategically, which stabilized demand and improved the performance and return on investment of CROs.
In the late 1980s and early 1990s, Corning, Incorporated acquired numerous best-of-class drug development companies, some with roots dating back to the 1940s. In January 1997, Corning spun off these businesses as one publicly-traded, independent company called Covance Inc. [NYSE: CVD].