by The global pharmacy market is estimated at USD 1.28 trillion in 2023 and is projected to reach USD 2.59 trillion by 2033, at a CAGR of 7.29% from 2024 to 2034.
The E-pharmacy market’s rapid growth is a crucial factor driving the market. The introduction of e-pharmacies is being aided by a dramatic increase in online purchasing of pharmaceuticals during the COVID-19 epidemic, as well as increased acceptance of digital technologies. Furthermore, big e-commerce companies are venturing into the e-pharmacy industry, bolstering market growth prospects.
Many pharmacies have begun to implement clinical programs aimed at promoting medication adherence and improving health outcomes. They’re also using subscription and loyalty programs to boost patient involvement. Prescription refills are now available online through pharmacies’ websites, smartphone apps, and automated telephonic systems. The market is growing due to leading players’ increasing embrace of automation technology and digitalization activities.
North America dominates the pharmacy market both in demand and drug development. Researchers from FLANKE estimated that the U.S. makes up about 55% of medication sales, but only 24 per cent of sales volume. A solid system that rewards innovation and the improvement of current treatments ensure a supportive pharmaceutics markets for open public companies.
About 3 of the 10 top drug manufacturers of pharmaceutical drugs are based in Europe. Swiss hosts the top two drug producers; Roche and Novartis. The eighth rank is held by France’s Sanofi. Amongst the geographic marketplaces, Europe is the number one cedar of pharmaceutical drugs, with shipments in 2020 totaling US$328.4 billion which accounts for 80.5 per cent of the global total. The nations around the world experiencing the most growth in phrases of pharmacy export products are Slovenia, Ireland in Europe, India and Italia. Europe is known for innovation as well, and there are many products in the R&D stages right now. One of the latest breakthrough enhancements to come out there of the region is Gavre to (pralsetinib) for the treatment of grownups with RET fusion-positive state-of-the-art non-small-cell lung cancer tumor, developed by Rocher. With such benefits India enjoys an important position in the global pharmaceutical drugs sector.
Pharmacy Market Highlights:
- In 2023, North America held the largest market share, accounting for 54%.
- The prescription product segment led the market, capturing 82% of the total share in 2023.
- The retail pharmacy type segment held the highest market share, contributing 56% in 2023.
- The ePharmacy segment is expected to experience the fastest growth throughout the forecast period.
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Pharmacy Market Dynamics
Driver
Availability of Health and Wellness services in Pharmacies Increasing Consumer Base of Pharmacies
Over the past few years established industry players have invested hugely in delivering innovative and superior service, while pharmacies are focusing significantly towards increasing customer satisfaction by offering health and wellness services. The key driver of overall customer satisfaction is the availability of overall wellness services. Supply of these services is showing improvement in overall customer satisfaction. These kinds of services are at present seen in 86% of chain drug stores, 83% of superstore pharmacies and 73% of mass merchandiser medical stores in U.S. Many pharmacies are focusing on on-time delivery through mail orders Customer satisfaction is highest when they get a health professional prescribed medicines ready/delivered when assured. Such innovative services provided by pharmacies are driving the market growth.
Restraint
Increasing competition From E-pharmacies to pose Major Threat for Retail Pharmacies
Competition in the pharmacy industry is projected to intensify in the approaching years, especially from big-box merchants and mail-order and online pharmacies. Payors also have piloted consumers email ordering, such as by covering a 3 month supply of medications sent to the home just a 30-day supply offered at a brick-and-mortar drug-store. Finally, Internet medical stores are aggressively focusing on cash-paying customers by providing medications at a lower cost.
The multinational companies such as Amazon entering in E-pharmacy segment is a menace to retail medical stores on multiple methodologies. Amazon entered into the health professional prescribed industry with their 2018 acquisition of PillPack and the 2020 launching of Amazon Pharmacy and an Amazon Excellent prescription discount profit. And furthermore Amazon is planning to create physical pharmacies. With such moves Amazon will still be a thorn in the side and tension on the underside line of list pharmacies. This factor may act as a major threat for the expansion of retail pharmacies.
Opportunity
Innovations in Technology Evolving Pharmacy Industry
Innovation in technology may provide promising opportunities for the market growth of pharmacy market during forecast time period. For years, researchers have been working on smart mirrors that utilize advanced cameras and customer’s breadth to detect health variations and smart toilets. Several companies are testing and developing basic home health care bots, and elderly workers in Japan are already wearing exoskeletons to help them perform manual labor.
Smartphones are progressing to the point where they can be used as point-of-care and home health diagnostic tools for ailments including urinary tract infections6 and diabetic eye disease. Labs have created an ingestible origami robot that can be swallowed and controlled to, for example, patch a wound, and are experimenting with xenobots, programmable organisms made from frog stem cells that could deliver medicine. As pharmaceutical are innovating and competing in the growing pharmacy market planning, adapting, and investing for the future offers lucrative opportunities.
Challenge
Low Margins for Pharmacy Owners Challenging Growth in Sales Value
Retail pharmacies are likely to face downward stresses on their profitability. Compensation is tightening and costs are on the rise for everything from wages to rent to more cumbersome certification and licensing requirements. In addition, medical stores have found themselves pushed to purchase new technology and products that can help keep them up to date and competitive. All this contributes to constantly shrinking margins that threaten long-term stability.
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Pharmacy Market by Regional Breakdown
North America led the market in 2023, holding a 54% share. This strong market position is due to the presence of major multinational chains like Boots, Walgreens, CVS Health, UnitedHealth Group, Cigna, Kroger, Walmart, and Rite Aid Corp. These companies are using various strategies and advanced technologies to enhance their market presence. For example, Rite Aid Corp. launched its Wellness + loyalty program in March 2022, which provides customers with significant savings and rewards.
Europe also captured a significant share of the market in 2023. Growth in this region is mainly driven by the increasing number of people with chronic conditions who prefer using online pharmacies for convenient access to medications, especially in rural areas.
Asia Pacific is projected to be the fastest-growing market in the upcoming years. The region is undergoing demographic changes, with an aging population and a rising prevalence of chronic diseases such as diabetes, cancer, and cardiovascular disorders, fueling greater demand for pharmacy services.
In Latin America, market growth is attributed to the increasing dominance of pharmacy chains, with some retailers now managing over three-quarters of the pharmacies in countries like Chile, Colombia, and Peru. This expansion is facilitated by business strategies that include owning outlets outright, franchising, and forming cooperatives.
Recent Developments in the Global Pharmacy Market
Several recent developments have taken place in the market, some of which have been outlined below.
- In May 2024, Walgreens entered into a partnership with Boehringer Ingelheim to enhance diversity in clinical trials. The partnership will leverage Walgreens pharmacies as recruitment and clinical trials site for studies targeting obesity, overweight and type 2 diabetes.
- In April 2024, PharmEasy, an online pharmacy startup, raised $216 million in a venture funding round led by Manipal Education and Medical Group (MEMG) along with other existing investors.
- In March 2024, Elevance Health’s pharmacy benefit management segment, CarelonRx, acquired Kroger’s specialty business segment. Under the terms of this agreement, Elevance Health would leverage Kroger’s specialty in treating patients with chronic illness.
Top Manufacturers in the Pharmacy Market
- CVS Health
- Demands: With over 10,000 retail locations and nearly 85 million CVS Caremark members, CVS Health is a key player in meeting the growing consumer demand for accessible healthcare services. The company reported over 1 billion prescriptions filled in 2023, showcasing the high demand for its pharmacy services.
- Investments: CVS Health invested approximately $2 billion in 2023 into enhancing its digital capabilities and expanding its health services, including telehealth and MinuteClinic services. These investments align with the increasing trend toward digital health and convenience.
- Product Offerings: CVS Health offers a comprehensive range of prescription medications, over-the-counter drugs, health and wellness products, and beauty items. Additionally, CVS Caremark, its pharmacy benefits manager, serves over 100 million plan members.
- Walgreens Boots Alliance
- Demands: Walgreens Boots Alliance serves millions of customers every day across more than 9,000 retail locations in the U.S. and over 4,200 stores internationally. The company’s total revenue for fiscal 2023 was approximately $139.5 billion, indicating strong consumer demand.
- Investments: The company has allocated around $1.2 billion for digital transformation, including expanding its e-commerce platform and enhancing its online pharmacy services. In 2023, Walgreens expanded its digital pharmacy app, which now has over 60 million active users.
- Product Offerings: Walgreens offers prescription medications, over-the-counter products, health and wellness items, beauty products, and health services through its Boots and Duane Reade brands.
- Cigna
- Demands: Cigna, with its acquisition of Express Scripts, now manages pharmacy benefits for over 95 million customers. The demand for Cigna’s services is driven by the need for affordable and accessible healthcare solutions.
- Investments: In 2023, Cigna invested over $700 million to enhance its pharmacy benefit management services and digital platforms. The focus has been on improving medication adherence and expanding the use of predictive analytics for personalized healthcare.
- Product Offerings: Cigna provides a range of services, including health insurance plans, pharmacy benefits management (PBM), chronic disease management, and wellness programs.
- Walmart
- Demands: Walmart operates more than 4,700 pharmacy locations in the U.S., serving millions of customers annually. In 2023, Walmart’s health and wellness segment, including its pharmacy business, generated approximately $37.5 billion in revenue, reflecting high demand.
- Investments: Walmart has invested over $1 billion in expanding its health services, including the establishment of Walmart Health centers and enhancing its online prescription delivery services.
- Product Offerings: Walmart offers a wide array of prescription medications, over-the-counter drugs, health and wellness products, and healthcare services such as optical and hearing care.
- Kroger
- Demands: Kroger’s pharmacy services are available in over 2,200 locations, making it one of the largest supermarket pharmacy chains in the U.S. Kroger’s health and wellness sales exceeded $11 billion in 2023, driven by the growing need for convenient pharmacy services.
- Investments: Kroger invested around $300 million in 2023 to improve its pharmacy and health services, including expanding its online prescription ordering and delivery capabilities.
- Product Offerings: Kroger provides prescription drugs, over-the-counter medications, wellness products, health clinics, and nutritional counseling services.
- Rite Aid Corp.
- Demands: Rite Aid operates approximately 2,300 stores across the U.S. and serves millions of customers annually. The company’s focus on personalized health services and loyalty programs has driven customer engagement, with over 15 million Wellness+ members as of 2023.
- Investments: Rite Aid has invested $500 million in recent years to modernize its stores, enhance its loyalty programs, and expand digital health services, including telehealth.
- Product Offerings: Rite Aid offers prescription medications, over-the-counter drugs, beauty and personal care products, wellness products, and immunization services.
- Lloyds Pharmacy
- Demands: With over 1,500 locations across the UK, Lloyds Pharmacy serves millions of customers each year. The demand for its services is increasing, particularly for home delivery and online pharmacy services, as more consumers seek convenience.
- Investments: Lloyds Pharmacy has invested over £200 million in digital transformation, including expanding online services and home delivery options to meet growing consumer demand.
- Product Offerings: Lloyds Pharmacy provides prescription medications, over-the-counter drugs, health consultations, wellness products, and home delivery services.
- Well Pharmacy
- Demands: Well Pharmacy operates around 760 branches across the UK, serving approximately 1.5 million customers per week. The demand for accessible pharmacy services in local communities remains strong, particularly in rural areas.
- Investments: Well Pharmacy has committed over £150 million to enhancing digital capabilities and expanding medication delivery services, responding to the increasing consumer preference for online healthcare solutions.
- Product Offerings: Well Pharmacy offers prescription drugs, over-the-counter medications, health and wellness products, health checks, and consultations.
Read More@ Healthcare Analytics Market
Pharmacy Market Segmentation:
By Product
- Prescription
- OTC
By Type
- Hospital Pharmacy
- Retail Pharmacy
- Chain
- Independent
- Others
- ePharmacy
- Others
By Region
- North America
- Europe
- Asia Pacific
- Latin America
- MEA
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