The fast-growing clinical research outsourcing over the course of the past decade has attracted the active involvement of private equity buyers to the “business” of Clinical Research Organizations (CROs). The fragmentation of pharmaceutical services through CROs offers an opportunity to lower the financial risk of drug development in a highly critical industry. Justified by the operational efficiency that integrating assets and services to decrease costs even further may represent, private equity has recently demonstrated an appetite for vertical integrations to expand the geographic, patient, and service reach of clinical research sites. Since private equity managers have the incentive to maximize financial returns, gaining greater access and control of patient identification, enrollment and retention, and quality protocols may pose significant equity-based risks to biopharmaceutical stakeholders, fundamentally, drug end users.

The proliferation of CROs and their plans to gain further operational control of clinical trials pose the potential tradeoff between drug development efficiency and equitable development and access to drugs and research knowledge. This reasonable concern is most present in the efficiency-based scholarship debate on shareholder and stakeholder governance of recent years. The discussion centers on whether new corporate leaders and investors might be paying too much attention to shareholder value while not enough to stakeholder value. A balance, the debate seems to suggest, is critical to generating long-term shareholder wealth, shifting the long-standing “shareholder value” corporate governance model toward an equity-based, “deliver value” type, commitment.

By observing the lay of the land of CROs in the United States and using as a theoretical framework the increasingly influential stakeholderism approach to corporate governance, this essay offers a critical view of the use of stakeholder factors in stewardship decisions made by CROs’ corporate leaders and private equity investors. Ultimately, it aims to identify key areas of organizational and governance concerns in medical research and the shortcomings they represent to equitable access to medical innovation.