Pharmaceuticals Market Definition
The pharmaceuticals market consists of sales of pharmaceuticals and related services by entities (organizations, sole traders and partnerships) that produce pharmaceuticals used in treating diseases. This industry includes establishments that produce biologics and pharmaceutical drugs. The pharmaceutical industry develops drugs to diagnose, cure, treat or prevent diseases, infections, and injuries. Pharmaceuticals are subjected to various laws and regulations that deal with patenting, testing, safety, efficacy and marketing. Pharmaceutical drug manufacturers produce pharmaceutical drugs made from active pharmaceutical ingredients (API) and excipients.
Pharmaceuticals Market Size
The global pharmaceuticals market reached a value of nearly $1,217.1 billion in 2019, having increased at a compound annual growth rate (CAGR) of 6.7% since 2015. The market is expected to decline from $1,217.1 billion in 2019 to $1,209.6 billion in 2020 at a rate of -0.6%. The decline is mainly due to lockdown and social distancing norms imposed by various countries and economic slowdown across countries owing to the COVID-19 outbreak and the measures to contain it. The market is then expected to recover and grow at a CAGR of 8.5% from 2021 and reach $1,738.2 billion in 2023. The market is expected to reach $2,050.9 billion in 2025, and $3,206.3 billion in 2030.
Growth in the historic period resulted from rapid growth in elderly population, strong economic growth in emerging markets, rise in healthcare expenditure, increased prevalence of respiratory diseases, and increased number of tobacco smokers. Factors that negatively affected growth in the historic period were patent expiration of drugs, pricing pressures from regulators, regulatory challenges, increased preference for surgical and biological treatments, and high costs of drug approval.
Going forward, technological advances, changes in lifestyles, new methods for drug discovery, large pool of undiagnosed population, and increase in pharmaceutical drug usage due to covid-19 pandemic will drive the growth. Factors that could hinder the growth of the pharmaceuticals market in the future include reduction in free trade, and high manufacturing cost of biologics.
Pharmaceuticals Market Drivers
The key drivers of the pharmaceuticals market include:
Technology is expected to be a continued driver of pharmaceuticals market growth during the forecast period. An area of particular development is likely to be physiology simulation modeling. Markets such as this one will benefit from the greater efficiencies offered by new technologies. For example, Eli Lilly and Pfizer have adopted Amazon’s Elastic Compute Cloud (EC2) platform to conduct simulation models in early drug discovery that have been operational within hours, whereas traditional models would have taken weeks to conduct simulations . Technological advances will contribute to the growth of the pharmaceuticals market.
Pharmaceuticals Market Restraints
The key restraints on the pharmaceuticals market include:
High Manufacturing Cost Of Biologics
Biological drugs are highly sensitive and dependent on the conditions in which they are manufactured and handled. They tend to aggregate during the production and purification process and quality control plays an important part in the manufacture of these drugs. Even minor differences in the production process can generate variations in the resulting protein, potentially leading to catastrophic results. Biopharmaceutical companies manufacturing biologics have to put in extra care and resources. The research and development costs associated with producing biologics are comparatively very high and the testing and manufacturing process is complicated. Development of a new biologic medicine involved eight stages. Approximately, only one in every 5,000 new medicines gets successful in this process, which costs millions. Complicated and lengthy process coupled with high failure rate raise the cost of biologics, which in turn will affect the market negatively.
Pharmaceuticals Market Trends
Major trends influencing the pharmaceuticals market include:
Use Of Biomarker For Drug Development
Pharmaceutical companies are increasingly using biomarkers in the drug development process to reduce the time taken to bring the product into the market. Biomarkers are biological indicators which are objectively measured and evaluated for biological processes, pathogenic processes or pharmacological responses to a therapeutic intervention. They are helpful to predict the drug efficacy faster than conventional clinical endpoints, the point at which an undesired or abnormal effect of the drug is observed indicating withdrawal from therapy. Companies in this market are investing in the development of biomarkers for use in various activities such as tracking drug activity, studying pharmacodynamics (relationship between the drug concentration at the site of action and the biochemical and physiological effect) of drugs and to study diseases and treatment pathways. Companies such as Genentech and Janssen are increasingly investing in the use of biomarkers for understanding the efficacy of a potential respiratory drug. For example, Janssen has partnership with U-BIOPRED (unbiased biomarkers in prediction of respiratory disease outcomes), a group in Europe that aims to understand more about severe asthma.
Demand For Personalized Medicine
Pharmaceutical companies are offering drugs for customized individual treatment for better treatment against different diseases. Personalized medicine, also referred to as precision medicine, aims to provide medical care according to the patient’s individual characteristics, needs, preferences and genetic makeup. Precision therapies are increasingly being adopted in the respiratory drugs market as firms increasingly let go of the one-size-fits-all model for common medical conditions. Major companies such as GSK, Teva Pharmaceuticals and AstraZeneca are investing in development of personalized medicines.
And Recommendations In The Pharmaceuticals Market
Opportunities – The top opportunities in the pharmaceuticals market segmented by type will arise in the pharmaceutical drugs market segment, which will gain $325.7 billion of global annual sales by 2023. The top opportunities in the pharmaceutical drugs market segmented by type of drug will arise in the metabolic disorders drugs market segment, which will gain $54.9 billion of global annual sales by 2023. The top opportunities in the biologics market segmented by type of drug will arise in the monoclonal antibodies (MAbS) market segment, which will gain $87.1 billion of global annual sales by 2023. The pharmaceuticals market size will gain the most in the USA at $196.5 billion.
Market-trend-based strategies for the pharmaceuticals market include consider investing in biomarkers, offering personalized medicine, developing next-generation biologics, developing microneedle injectors-based drugs, investing in AI solutions, carrying out strategic collaborations, and developing combination drugs. Player-adopted strategies in the pharmaceuticals market include expanding business through sustainable investments, innovating through collaborations, and strengthening portfolio through strategic acquisitions.
Recommendations – To take advantage of the opportunities, The Business Research Company recommends the pharmaceuticals companies to focus on personalized medicine, invest in biomarker, invest in artificial intelligence, focus on R&D investments and research collaborations, expand in emerging markets, leverage e-commerce to maximize reach and revenues, leverage online pharmacies, provide competitively priced offerings in low-income countries to reach new users, premium pricing for branded drugs, focus on increasing awareness on importance of healthcare and develop generics drugs.
Pharmaceuticals Market Segmentation
The Pharmaceuticals market is segmented by type, by pharmaceuticals drugs type, biologics drugs type and by geography.
By Type -
The pharmaceuticals market can be segmented by type
The pharmaceutical drugs market was the largest segment of the pharmaceuticals market segmented by type, accounting for 77.9% of the total in 2019. Going forward, the biologics segment is expected to be the fastest growing segment in the pharmaceuticals market segmented by type, at a CAGR of 14.6% during 2019-2023.
- a) Pharmaceutical Drugs
- b) Biologics
By Type Of Pharmaceutical Drugs
The pharmaceuticals drugs market can be segmented by type of drugs
The metabolic disorders drugs market was the largest segment of the pharmaceutical drugs market segmented by type of drug, accounting for 15.4% of the total in 2019. Going forward, the dermatology drugs segment is expected to be the fastest growing segment in the pharmaceutical drugs market segmented by type of drug, at a CAGR of 13.0% during 2019-2023.
- a) Cardiovascular Drugs
- b) Dermatology Drugs
- c) Gastrointestinal Drugs
- d) Genito-Urinary Drugs
- e) Hematology Drugs
- f) Anti-Infective Drugs
- g) Metabolic Disorder Drugs
- h) Musculoskeletal Disorder Drugs
- i) Central Nervous System Drugs
- j) Oncology Drugs
- k) Ophthalmology Drugs
- l) Respiratory Diseases Drugs
By Type Of Biologics Drugs
The biologics drugs market can be segmented by type of drugs
The monoclonal antibodies (MAbS) market was the largest segment of the biologics market segmented by type of drug, accounting for 43.5% of the total in 2019. Going forward, the vaccines segment is expected to be the fastest growing segment in the biologics market segmented by type of drug, at a CAGR of 16.8% during 2019-2023.
- a) Monoclonal Antibodies (MAbS)
- b) Therapeutic Proteins
- c) Vaccines
By Geography- The pharmaceuticals market is segmented into
o Western Europe
o Asia Pacific
o Eastern Europe
- New Zealand
- Hong Kong
- South Korea
o South America
- Czech Republic
o Middle East
- Saudi Arabia
North America was the largest region in the global pharmaceuticals market, accounting for 45.9% of the total in 2019. It was followed by Asia Pacific, Western Europe, and then the other regions. Going forward, the fastest-growing regions in the pharmaceuticals market will be Asia Pacific, and the Middle East, where growth will be at CAGRs of 12.2% and 9.7% respectively during 2019-2023. These will be followed by Africa, and North America, where the markets are expected to grow at CAGRs of 9.5% and 8.3% respectively during 2019-2023.
- South Africa
Pharmaceuticals Competitive Landscape
Major Competitors are:
Other Competitors Include:
- • Pfizer Inc.
- • F. Hoffmann-La Roche AG
- • Novartis AG
- • Johnson & Johnson
- • GlaxoSmithKline Plc.
- • Merck & Co., Inc.
- • Sanofi S.A.
- • AbbVie Inc.
- • Bristol Myers Squibb Company
- • Bayer AG
- • Apotex
- • Gilead Sciences
- • Amgen
- • Sanofi Pasteur
- • Janssen Pharmaceutica
- • Accord Healthcare Inc
- • Acerus Pharmaceuticals Corporation
- • AA Pharma Inc
- • Sanfer
- • LABORATORIOS SENOSIAIN SA DE CV (Senosiain)
- • Siegfried Rhein
- • Vectura Group
- • Boehringer Ingelheim
- • AstraZeneca
- • Abbott Laboratories
- • Teva UK Limited
- • Shanghai Pharmaceuticals
- • Shanghai Fosun Pharmaceutical
- • Takeda Pharmaceutical Company Ltd.
- • Otsuka Pharmaceutical Co. Ltd.
- • Daiichi Sankyo
- • China National Pharmaceutical Group Co., Ltd. (Sinopharm)
- • Shanghai Acebright Pharmaceuticals Group Co., Ltd.
- • Jiangsu Hengrui Medicine Co., Ltd
- • Hanmi Pharmaceutical
- • Cipla Limited
- • Aurobindo Pharma Limited
- • Dr. Reddy’s Laboratories Ltd.
- • Sun Pharma
- • KYORIN Holdings, Inc.
- • Nichi-Iko Pharmaceutical Co., Ltd
- • Daewoong Pharmaceutical Co.,Ltd
- • Mylan
- • Zentiva
- • EMS Pharma
- • Hypermarcas
- • Eurofarma
- • Teuto Brasileiro
- • Biolab Farmaceutica
- • Cristalia
- • União Quimica
- • Spimaco
- • Jamjoom Pharma
- • Tabuk Pharmaceutical Manufacturing
- • Jazeera Pharmaceutical Industries
- • Julphar
- • MSD
- • Novo Nordisk
- • Neopharma
- • Adcock Ingram
- • Ranbaxy (SA) (Pty) Ltd
- • Aspen