Impact of COVID-19 on Pharmaceuticals Market Size, Share & Industry Analysis, By Type (Drugs (Oncology, Diabetes, Infectious Diseases, Cardiology, Neurology, Respiratory, Hypertension, and Others), and Vaccines (Viral Diseases and Bacterial Diseases)), By Distribution Channel (Hospital Pharmacies, Retail Pharmacies, and Online Pharmacies), and Regional Forecast, 2022-2029

The global pharmaceuticals market size was valued at USD 1,494.67 billion in 2021. The market is projected to grow from USD 1,585.05 billion in 2022 to USD 2,401.22 billion by 2029, exhibiting a CAGR of 6.1% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with pharmaceuticals experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global pharmaceuticals market exhibited a rise of 8.4% in 2020 as compared to 2019.

The healthcare R&D spending in 2021 witnessed tremendous growth, resulting in a higher number of clinical trial activities and drug approval and launches in 2021 compared to the previous years. This was due to the rising adaptation of this industry toward the pandemic.

• As per a study article published by IQVIA in 2021, the clinical trial activity for various chronic conditions and COVID-19 witnessed an increase of 14% through the pandemic, wherein the total number of clinical trials in 2020 was 4,891, which increased to 5,578 by the end of 2021.

Also, healthcare investments are growing rapidly and reflecting confidence in medical innovations. According to the 2021 annual report of AstraZeneca, the total R&D spending in 2020 was 5,991.0 million, which was increased by 62.5% in 2021, wherein the total R&D spending was valued at USD 9,736.0 million. Therefore, to provide patients access to treatment without unaffordable out-of-pocket costs, today’s development pipeline represents the frontier in having the potential to transform people's lives during the forecast period.

COVID-19 IMPACT 

Speedy Recovery and Adaption from Slight Disruptions in Supply Chain and Drug Development to Augment the Market Growth 

The COVID-19 pandemic slightly hampered the growth of this market in 2020 in several ways. The pandemic directly affected production and demand, disrupting pharmaceutical products' supply chain and logistics. The number of successful clinical trials and R&D activity across therapy areas such as diabetes, hypertension, and others declined as the industry shifted its focus and prioritized infectious diseases, respiratory diseases, and vaccines.

However, the impact of COVID-19 on the pharmaceuticals market growth was short-term. Pharmaceutical companies effectively recovered the supply chain and logistics shortage by adopting various strategies and plans. The COVID-19 pandemic positively impacted this market by the end of 2020 with increased sales of drugs and vaccines, R&D investment, and pipeline portfolio of the major players in the market. The pipeline portfolio for infectious diseases and vaccines witnessed a significant rise driven by COVID-19 related to treatments and immunization programs.

Additionally, the number of mergers and acquisitions along with drug approvals and launches in the pharmaceutical industry grew significantly in 2021 owing to the COVID-19 pandemic.

• For instance, in March 2021, Merck & Co., Inc. announced a partnership with Johnson & Johnson to expand the manufacturing capacity and supply of its COVID-19 vaccine worldwide.


• Similarly, in May 2021, GSK plc. collaborated with Sanofi to initiate the phase III clinical study of the COVID-19 vaccine.

Thus, the market adapted strongly to the impact and underwent necessary and timely changes to minimize the impact and carry out the processes smoothly.

LATEST TRENDS

Growing Adoption of Digital Technologies across Various Fields in the Pharmaceutical Industry to Transform Healthcare Services

The impact of COVID-19 on the pharmaceuticals market led to increased adherence to decentralized clinical trials. Primary factors associated with this include COVID-19 restrictions, including social distancing, quarantine, and fear of getting infected by COVID-19 among the patient population. These factors hampered the overall efficiency, productivity, and outcomes of the clinical trials, which led to an increased demand for decentralized clinical trial processes, from patient selection and enrollment to studying the trial outcomes. The decentralization of clinical trials and automation in the procedures are leading pharmaceutical companies to increase their R&D spending and activities to develop novel drugs and therapies.

The rising demand increased the collaborations among pharmaceutical companies with AI-driven companies to enable automated clinical trials and patient care delivery models across the healthcare systems.

• For instance, in 2022, Sanofi and Evidation extended their collaboration to translate person-generated health data into quantified clinical and economic outcomes.

Additionally, AI algorithms have changed the pattern of disease diagnosis, thus promoting smart hospitals and telemedicine. This factor is leading to an increased demand for precision medicines and the rising number of clinical studies and trials related to rare conditions.

DRIVING FACTORS

Increasing Prevalence of Chronic Conditions and Infectious Diseases to Propel the Market Growth 

The rising global prevalence of chronic conditions such as cancer, diabetes, and others is leading to an increased patient population in the healthcare system.

• For instance, the American Cancer Society estimated 1.9 million new cancer cases diagnosed in 2022 in the United States.

Additionally, the growing geriatric population is resulting in a rising prevalence of age-related disorders such as rheumatoid arthritis, cardiovascular disorders, and others.

• For instance, according to a 2021 article published by the U.S. Bone and Joint Initiative, the rate of doctor-diagnosed arthritis in the population aged between 18 and 44 years is 7 in 100, whereas the rate has increased to 1 in 2 with some form of arthritis by the age of 65 years and above.

With the rising prevalence and awareness of chronic conditions and infectious diseases among the population, the patient population requiring personalized drugs, vaccines, and therapies is also increasing. Furthermore, growing per capita healthcare expenditure in developed and emerging countries fuels the number of patients undergoing treatment. Thus, the increasing patient population and improving healthcare facilities are anticipated to fuel the demand for drugs and therapies in the healthcare system.

Increasing R&D Focus and Investments by Pharmaceutical Companies to Accelerate Market Growth

The rising patient population and increasing demand for treatment and drugs for various therapeutic areas worldwide are leading into a growing R&D focus of major pharma companies to develop and expand their portfolio along with the pipeline products.

• For instance, as of March 2022, the R&D pipeline of Sanofi includes 91 clinical-stage products for various therapeutic areas such as oncology, autoimmune disorders, neurology, and others, out of which 34 are in phase III trial or waiting for approvals.

The COVID-19 pandemic has triggered pharmaceutical companies in the market to shift their focus on R&D spending and investment to develop and deliver innovative medicines and therapies for the unmet clinical needs and demands. Thus, the number of mergers and acquisitions in 2021 among the market players also increased.

• For instance, in December 2021, Pfizer Inc. acquired Arena Pharmaceuticals, a clinical-stage company to develop innovative therapies for the treatment of several immuno-inflammatory diseases.

The rising prevalence and awareness of chronic diseases and available treatment options are leading to increased efforts of major players in the market to develop and launch new drugs for various rare conditions. These factors are anticipated to augment the market growth.

• In October 2021, Novartis AG received U.S. FDA approval for Scemblix to treat chronic myeloid leukemia.

Therefore, COVID-19 recovery is anticipated to augment the number of approvals and launches of novel drugs and therapies in the market.

RESTRAINING FACTORS

Lawsuits and Product Recalls to Hamper Market Growth

The drugs and vaccines are rigorously tested for safety and efficacy through clinical trials before making them available in the market. However, the clinical trials are conducted with a small number of candidates for a short period, and several times, certain side effects are seen in the patients at a later stage owing to their immunological factors, age, and other factors.

Additionally, due to mislabeling, potential contaminants, or poor manufacturing of the products, the drug recalls in the market hampers the brand value of the market players affecting their sales, customer relationships, and reputation.

• In September 2021, Aurobindo Pharma USA Inc. recalled 2,820 bottles of Metoprolol tartrate tablets due to the presence of foreign substances.


• Similarly, in July 2020, Indian drugmakers, such as Lupin, Aurobindo Pharma, and Alembic Pharmaceuticals, recalled products from the U.S. market as per an enforcement report from the U.S. Food and Drug Administration (FDA).

Furthermore, product recalls are anticipated to disrupt the focus of the pharmaceutical companies from research and development activities, which will hamper the development of novel therapies for the patient population.

SEGMENTATION

By Type Analysis

Drugs Segment to Dominate Attributable to Increasing Adoption of Chronic/Infectious Disease Treatment

Among types, the drugs segment accounted for most of the market share in 2021. Growing prevalence and awareness of chronic conditions such as cancer, diabetes, and others among the patient population is leading to rising demand for drugs worldwide. This factor favors the increasing sales of generic and prescription medications for various oncology, diabetes, and anti-infective drugs. Additionally, increasing approvals, launches, and R&D investments in developing effective drugs are estimated to boost segmental growth.

• In October 2021, F. Hoffmann-La Roche Ltd. announced the U.S. FDA approval of Tecentriq as an adjuvant treatment of non-small cell lung cancer in adults.

Also, the increasing prevalence of cardiovascular diseases in the population and growing concern regarding the conditions across the world are anticipated to boost the diagnosis rate for the conditions among the patient population. Along with this, the awareness about available treatment options is leading to an increase in the demand for cardiovascular drugs and therapies among the patient population.

• According to a 2019 study article published by the Lancet Neurology, the prevalent global cases of stroke was 101.0 million, and there were 12.2 million new cases in the year. The incidence rate increased by more than 35.0% during 2010-2019.   

The vaccines segment witnessed significant growth in 2021 compared to 2020 due to the increased demand for vaccines for COVID-19 prevention. The increased number of COVID-9 cases worldwide led to more initiatives by various government bodies, organizations, and institutions for immunization drives in countries, which is crucial to the segment's growth. The segment is expected to grow at a normal pace owing to the increasing number of vaccine candidates in the pipeline portfolio of the major players.

By Distribution Channel Analysis

Retail Pharmacies Segment to Dominate Owing to Growing Demand and Availability of Over-the-Counter (OTC) Products 

In terms of distribution channel, the market is segmented into hospital pharmacies, retail pharmacies, and online pharmacies.

The hospital pharmacies segment holds the dominating share in the market owing to increasing patient visits to treat disease conditions. Additionally, the segmental growth was attributed to the increased number of hospitalizations during the COVID-19 pandemic, especially in Intensive Care Units (ICU) and emergency departments.

On the other hand, the growing preference of patients toward specialty clinics is increasing due to increasing adoption of technological advancements along with specialized care and treatment in specialty clinics. These are some of the major factors attributable to the growth of the retail pharmacies segment. Also, the rising availability of low-cost OTC products is likely to boost the retail pharmacy segment growth.

The online pharmacy segment is expected to witness a lucrative CAGR over the forecast period owing to penetration of online portals and websites, such as Amazon, Walmart, and others, to this industry.

REGIONAL INSIGHTS

The market size in North America stood at USD 610.29 billion in 2021. The dominance of this region is attributable to many factors such as advancements in clinical trials and drug manufacturing in the U.S. and Canada. This factor is provoking key players to develop innovative products in the region, thereby driving market growth. Additionally, the increasing number of drug approvals in the region is also a major factor favoring the market's growth in the region.

• In September 2022, Bristol-Myers Squibb Company received the U.S. FDA approval for Sotyktu, an oral treatment for adults with moderate to severe plaque psoriasis.


• Similarly, in March 2022, Novo Nordisk A/S received the U.S. FDA approval for Ozempic 2.0 mg, subcutaneous injection for treating type 2 diabetes.

Also, technological advancements in the drug development processes and multiple launches of effective and innovative products are likely to aid the market's growth of pharmaceuticals in this region.

• In January 2020, Horizon Therapeutics plc launched TEPEZZA, the first and only approved drug for the treatment of Thyroid Eye Disease (TED), a rare vision-threatening disease.

Europe holds the second position in the market owing to the rising awareness of available treatment options and diagnosis among the patient population for various conditions in the regions. The increasing investment in R&D for effective drug development is also a major factor contributing to the segment's growth. Furthermore, higher sale of drugs/vaccines against chronic diseases is expected to drive growth during the forecast period.

Asia Pacific is anticipated to showcase the highest CAGR owing to increased awareness among the population about the care & management of disorders leading to demand for novel products. Moreover, increasing investments of domestic players in the region and mergers with key players are anticipated to surge the demand and accessibility of treatment options in the region.

Latin America and the Middle East & Africa are likely to witness comparatively slower growth due to lower reach and adoption of effective vaccines. However, improving the reimbursement scenario and developing healthcare infrastructure in the regions are anticipated to fuel market growth.

KEY INDUSTRY PLAYERS

Strong Product Portfolio and Growth Strategies by Key Players to Strengthen their Market Position

The global market is fragmented, with many players such as Pfizer Inc., Johnson & Johnson Services Inc., AstraZeneca, and others. The major players focus on increasing their R&D investments for the development process of novel therapies to meet the unmet demand from the patient population.

• The total R&D spending of Johnson & Johnson Services Inc. in 2021 increased by 53.7% compared to 2020, wherein the total expenditures were USD 14,700.0 million and USD 9,563.0 million in 2021 and 2020, respectively.

Pfizer Inc. captured a significant share of the market in 2021 owing to its increased R&D expenditure and launches of drugs for various conditions. Also, increasing collaborations and acquisition of players to strengthen their portfolio and penetration in the market is anticipated to drive the growth of the market in future.

LIST OF KEY COMPANIES PROFILED:

• Pfizer Inc. (U.S.)


• Johnson & Johnson Services Inc. (U.S.)


• GSK plc. (U.K.)


• Novartis AG (Switzerland)


• Merck & Co., Inc. (U.S.)


• Sanofi (France)


• F. Hoffmann-La Roche Ltd. (Switzerland)


• AstraZeneca (U.K.)


• Novo Nordisk A/S (Denmark)

KEY INDUSTRY DEVELOPMENTS:

• June 2022 - Merck & Co., Inc. received the U.S. FDA approval for the VAXNEUVANCE vaccine for the treatment of prevention of invasive pneumococcal disease in infants and children.


• May 2022 - GSK plc. acquired Affinivax, Inc., a clinical-stage biopharmaceutical company, to strengthen the company’s vaccines R&D pipeline, to provide access to new technology, and to expand the company’s geographical footprint in the Boston area.


• May 2022 - Johnson & Johnson Services, Inc. received the European Commission (EC) approval of the CARVYKTI, a T-cell therapy for treating adults with relapsed and refractory multiple myeloma.


• January 2022 - F. Hoffmann-La Roche Ltd. received the U.S. FDA approval for Vabysmo to treat neovascular and Diabetic Macular Edema (DME).


• March 2021 - Novo Nordisk A/S and Gilead Sciences, Inc., entered into a collaboration to conduct a clinical study to observe the efficacy of Novo Nordisk’s semaglutide.

REPORT COVERAGE

The research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, disease indications, and distribution channels. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market in recent years.

Report Scope & Segmentation

ATTRIBUTE	DETAILS
Study Period	2018-2029
Base Year	2021
Estimated Year	2022
Forecast Period	2022-2029
Historical Period	2018-2020
Unit	Value (USD billion)
Segmentation	Estimated Year
By Type	Drugs Oncology Diabetes Infectious Diseases Cardiology Neurology Respiratory Hypertension Others Vaccines Viral Diseases Bacterial Diseases
By Distribution Channel	Hospital Pharmacies Retail Pharmacies Online Pharmacies
By Region	North America (U.S. and Canada) Europe (U.K., Germany, France, Italy, Spain, Scandinavia, and the Rest of Europe) Asia Pacific (Japan, China, India, Australia, Southeast Asia, and the Rest of Asia Pacific) Latin America (Brazil, Mexico, Rest of Latin America) Middle East & Africa (GCC, South Africa, and the Rest of Middle East & Africa)