"Sustain your Business Growth from the Impact of COVID-19 Pandemic."
Covid-19 pandemic is projected to exert a minimalistic impact on the pharmaceuticals market, which will be followed by growing demand for drugs and vaccines.
As of 21st April 2020, there are around 2.43 million cases and 169,859 deaths resulting from the COVID-19 outbreak. Various countries, including major pharmaceutical markets, have initiated lockdowns and imposed nationwide travel and trade restrictions. Major factors projected to exert an impact on the pharmaceuticals market include delay in outpatient hospital visits for non-urgent treatments, supply chain disruptions globally, reduced pharmaceutical spending, and delay in approval and launch of new drugs. However, the impact of covid-19 on the pharmaceutical industry is projected to be neutralized by certain factors including higher demand for currently marketed drugs including anti-viral, anti-infective, analgesic, and other drugs from hospitals and other healthcare settings. This, along with ample stockpiles of branded drugs in various countries resulting in immunity from supply chain disruptions and potential drug and vaccine candidates being evaluated, are also expected to add impetus to the market growth.
Based on the analysis of Fortune Business Insights, the short-term impact of COVID-19 is expected to cause a slight decline in annual growth rate of the global pharmaceuticals market from previously projected 4.4% to revised projection of 4.0% in 2020. The global pharmaceuticals market, which was projected to be worth USD 1,316.0 billion in 2020 before the occurrence of this pandemic, is now expected to generate USD 1,310.0 billion in revenues this year.
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Decline/Delay in Patient Visits in Hospitals for Non-Urgent Treatments to Impede Growth
The covid-19 pandemic has affected more than 180 countries globally, and to curb the rapid spread of the disease and tackle the current outbreak, countries have resorted to social distancing norms and national lockdowns. Major pharmaceutical markets, including Italy, China, and India, have announced nationwide lockdowns for varying durations till date and other countries including the U.S. have also implemented travel restrictions to certain states and affected areas.
This is projected to impact the pharmaceutical industry owing to delay or postponing of routine health check-ups, follow-up checks, and outpatient visits to hospitals and other healthcare settings. Healthcare institutions globally have witnessed decline in number of patient visits during February and March 2020, citing fear among patients of contracting the virus, lockdowns, and travel restrictions. This has led to a decline in prescriptions, especially for acute conditions. The total number of prescriptions for acute drugs have declined by around 30% in the U.S. since the lockdown was imposed. Prescriptions for drugs in treatment of chronic conditions including diabetes, hypertension, etc., are not impacted, but these account for a comparatively smaller share (estimated 36%) of the pharmaceutical drugs market in 2019.
However, the impact is partially being neutralized by the shift of healthcare providers and patients towards tele-consultation and telemedicine and has led to an increase in number of virtual visits globally. Countries and healthcare settings have turned to telemedicine and other alternate methods to provide healthcare facilities to patients. Also the travel restrictions in various countries have boosted the growth of online pharmacies, which have witnessed increase in number of prescriptions for branded and generic medications over the past few months.
Supply-chain Disruptions to Create Hiccups for the Market
The global API manufacturing is currently concentrated in China and India, and trade restrictions being currently imposed by various countries has impacted the global supply chain of bulk drugs, APIs, and finished dosage forms to certain extent. According to the US Food and Drug Administration (FDA), an estimated 80% of the APIs in the U.S. are imported from other countries including China and India. Also, an estimated 13.4% of all drug imports in the U.S. were from China in 2018. India being the world’s leading manufacturer and exported of generic drugs, imports an estimated 70% APIs from China.
Top 10 countries accounted for an estimated 70% of the global pharmaceutical market in terms of revenues (USD billion) in 2018. U.S., China, and Japan together accounted for more than 50% of the global pharmaceutical industry in 2018. These countries, along with their European counterparts, are among the worst-hit countries by the current global pandemic. According to global estimates, China, U.S., and EU5 countries together account for an estimated more than 70% cases of covid-19 (as of 15th April, 2020). This has had majorly impacted the global supply chain and manufacturing of pharmaceuticals by major players, who have their sites and headquarters located in these major countries.
However, according to various industry experts and regional healthcare agencies, branded pharmaceuticals have demonstrated a stable supply chain and are expected to be least hit by the current situation. Also, API stockpiles in various countries have sustained the current trade restrictions and manufacturing units are restarting, which will further limit the impact. Trade restrictions are also expected to be lifted specifically for essential drugs and vaccines. All these factors together are projected to limit the impact of covid-19 on the pharmaceutical market in 2020.
Economic Slowdown & Delay in Drug Approvals Will Impact the Market
The current global pandemic is projected to have a short- and medium-term impact on various industries including oil & gas, automotive, aviation, manufacturing, and others. The supply chain disruptions in these industries, price variations, and other factors are anticipated to lead to an economic slowdown in 2020. According to the International Monetary Fund (IMF), the global economy is projected to decline by 3% in 2020. The organization also has taken into consideration that countries have started implementing counter-measures for the economic slump recovery in Q3 2020. Delays in implementation of these measures will result in further decline in the global economy.
This slowdown is anticipated to impact the pharmaceuticals market, especially hitting pharmaceutical and healthcare spending in emerging economies. These countries, with comparatively lower per capita healthcare spending and lack of reimbursement policies leading to higher out-of-pocket spending, are anticipated to be impacted by the economic slowdown, which will result in lower spending on pharmaceuticals in 2020. For instance, in India the out-of-pocket spending accounts for roughly 70% of total healthcare expenditure.
Also, the current global outbreak has resulted in delay in drug approvals for non-covid drugs, or drugs and medications which are not essentially targeted towards treatment of covid patients. This is primarily due to healthcare agencies and regulatory authorities prioritizing development, approvals, and marketing of covid drugs and vaccines if and when they are available. This is projected to delay the introduction of new drugs or molecules for treatment of other disorders, thus slightly impacting the global market.
Potential Drug & Vaccine Candidates being explored by Market Players
Despite the supply chain disruptions, delays in follow-up visits of patients suffering from co-morbid conditions due to nationwide lockdowns, and travel restrictions, the impact of covid-19 on the pharmaceutical industry is positive. The current pandemic, affecting millions of people globally, has driven major and regional pharmaceutical and biotechnology companies towards focusing on introduction of vaccines and drugs for prevention and treatment of patients suffering from covid-19.
Market players including Johnson & Johnson, Inovio Pharmaceuticals, Inc., Pfizer Inc., GlaxoSmithKline plc, and other players such as BioNTech SE, Clover Biopharmaceuticals, etc. have entered into partnerships and undertaken clinical trials to evaluate the potential candidates for vaccines. Roche, Sanofi, Gilead Sciences, Inc., and AbbVie Inc., among other pharmaceutical giants have collaborated with regional players, to evaluate the current marketed drugs and new candidates for efficiency in treatment of patients with covid-19. The addressable market for these vaccines and drug candidates would be immense, considering the approvals of these drugs by healthcare authorities globally, post their successful clinical trials and marketing.
Hydroxychloroquine, an anti-malarial drug, has witnessed significant demand due to its potential efficiency for reducing the recovery time of patients suffering from covid-19. A few drugs including the currently evaluated Actemra (Roche) are also being used off-label in certain healthcare settings. This has favored the revenues of market players operating in the anti-viral and anti-infective drugs segment.
“Demand for Drugs for Chronic Diseases to Increase during the Current Global Pandemic”
Oncology, Diabetes, Cardiovascular Drugs, Vaccines and Anti-viral together accounted for an estimated 33.4% of the global pharmaceutical market in 2018
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Although the current global pandemic is projected to impact various industries including the pharmaceutical and medical devices market, the impact on the pharmaceutical market is projected to be positive during 2020 & 2021. The symptoms of covid-19 are analyzed to be more severe in patients suffering from co-morbid conditions such as cancer, diabetes, and cardiovascular diseases. This has led to increasing demand for these drugs during the current period for management and treatment of patients. Healthcare agencies are focusing on uninterrupted supplies of these drug categories, and a higher emphasis is placed on patients to follow treatment regimens during the current outbreak.
The vaccines segment has also witnessed significant investment during the past few years, with various new vaccines for different infectious diseases receiving approvals. Various organizations including WHO, have laid down guidance for continuation of immunization programs despite the covid-19 outbreak, to eliminate the risk of another outbreak related to vaccine-preventable diseases (VPD). Although GAVI, the vaccine alliance which provides vaccines to low-income countries primarily in Africa, has stated that disruptions due to covid-19 are projected to impact vaccination programs for an estimated 13.5 million people, but the overall economic impact of this is not significant on the pharmaceuticals market.
“Top 10 Companies Accounted for around 40% of the Global Pharmaceuticals Market in 2018”
The major pharmaceutical companies globally have been actively involved in the development of drugs and vaccines, analyzing potential candidates, and collaborating with other pharmaceutical companies, with an aim to introduce breakthrough drugs and vaccines by early 2021. The huge R&D investments by these companies over the past years, along with diversified product portfolio in the oncology, vaccines, and anti-viral drugs segments, are some factors which have provided a competitive edge to these players in the current outbreak.
Exposure of major pharmaceutical companies to the pandemic depends on the following key factors
Top 10 Pharmaceutical Companies
Share in Global Pharmaceutical Market (2018)
F. Hoffman-La Roche Ltd.
Johnson & Johnson Services Inc.
Merck & Co.
Takeda Pharmaceuticals Ltd.
Johnson & Johnson Services, Inc. announced a 3.3% sales growth in Q1 2020, where pharmaceutical and consumer health segments delivered strong performance. According to its annual revenue guidance for 2020, the company does expect an impact on its medical devices segments, but expects only slight disruption in the pharmaceutical market.
The pharmaceuticals market report provides a detailed qualitative and quantitative analysis on the level of impact of COVID-19 on major pharmaceutical companies along with the measures taken by these companies to tackle the current situation.
The North America Pharmaceutical Market Accounted for an Estimated 47.0% of the Global Pharmaceutical Market in 2018
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The level of impact of the COVID-19 outbreak will vary across regions as well and the level of exposure experienced by different regions and countries will depend on various factors such as:
The report provides a detailed analysis on the level of impact of COVID-19 across different regions/countries by taking these factors into consideration.
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