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The global prescription drugs market size was valued at USD 1,090.7 billion in 2022 and is projected to grow from USD 1,162.6 billion in 2023 to USD 1,864.2 billion by 2030, exhibiting a CAGR of 8.9% during the forecast period.
Prescription drugs comprise various types of vaccines and therapies for the treatment and management of chronic and acute diseases. These disorders include types of cancer, cardiovascular diseases, diabetes, and also orphan disease. In a modern clinical scenario, the administration of appropriate prescription drugs is critical for better clinical outcomes for almost every patient suffering from serious disorders. Many market players are engaged in clinical trials for the development of new products for a wide range of diseases, but the prescription drugs scenario itself has undergone profound changes with an increasing influx of generic equivalents.
Deferred Hospital Visits Amid COVID-19 Hampered Prescription Drugs Sales
The impact of the COVID-19 pandemic resulted in a decline in market growth in 2020. Several regions across the globe faced challenges in accessing medical care and treatment due to the escalation of country restrictions or lockdowns. These factors also limited the number of patient visits to hospitals, and the dispersion of prescriptions by healthcare professionals, further moderately limiting the demand and adoption of prescription drugs. Also, the disruption caused by the COVID-19 pandemic to international supply chains led to high-profile shortages of critical medications and decline in drug expenditures across the globe.
However, the resurgence of routine healthcare services after the initial COVID-19 shutdown and patient visits to healthcare centers increased globally. Moreover, rising R&D initiatives for the development and launch of COVID-19 treatment drugs by major players surged the demand for vaccines and orphan drugs among the population. Moreover, the high emphasis on shifts to homecare settings by patients, along with uptake in the use of biosimilar, a large pipeline of new increased approvals of specialty medications by regulatory authorities, further propelled the drug's adoption.
Thus, the rebound in hospital visits by patients’ post-pandemic, coupled with the high consumption of prescription drugs in homecare settings, boosted the global prescription drugs market growth.
Increasing Presence of Pipeline Candidates in Various Therapy Areas
In this market, the increasing R&D investments by prominent companies for the development of new drugs are one of the main key trends.
This is primarily attributed to the fact that in the global scenario, there has been an increasing prevalence of several chronic disorders. This has led to increasing demand from patients due to their unmet clinical needs and demand for positive clinical outcomes. A number of these chronic disorders are often refractory in nature and require the administration of aggressive prescribed therapies.
This has led major pharmaceutical companies to be constantly engaged in clinical trials for the development and, ultimately, the approvals of new products. An increasing number of key manufacturers are shifting their focus toward developing drugs to treat rare diseases. This is projected to propel the market growth during the forecast period.
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Increasing Launch of Generic Equivalents of Key Prescription Drugs to Fuel Product Demand
One of the critical elements driving the global market growth is the increasing launches of the generic equivalents of several key drugs in strong markets such as the U.S. The increasing adoption of these generic equivalents is especially due to the fact that these generics are often as efficient as their original counterparts and can often be adopted by patients at a fraction of the costs. Patients without access to expensive prescription products due to financial hurdles can often adopt these drugs and experience better clinical outcomes. In October 2019, the U.S. FDA announced that they had given 1,171 generic drug approvals, of which 935 were full approvals and 236 were tentative approvals. The U.S. FDA particularly approved these generic equivalents to improve drug competition and to also encourage the increasing adoption of these low-cost drug equivalents.
This is especially critical for patients in emerging markets and also patients in developed countries who do not have access to appropriate payment plans for prescription medicines. These factors are anticipated to drive the global market growth during the forecast period.
Increasing Developments of Orphan Drugs Drive Market Growth
One of the key market driving factors prevailing in the market is the increasing R&D investments by prominent companies for the development of drugs for orphan diseases. A prime example of such a strategic move by a market player includes BioMarin, a key pharmaceutical company involved in the development of rare diseases therapies. BioMarin’s product portfolio includes several orphan drugs, such as the mucopolysaccharidoses (MPS) group of disorders, and the company also has strong orphan drug pipeline candidates in various stages of clinical trials. This increasing initiatives into rare diseases therapies are attributable to the fact that the development of blockbuster drugs is possible in orphan diseases as compared to the already mature markets of other traditional diseases such as cardiovascular and diabetes. The above factors, combined with the need for efficient therapeutics for severely debilitating rare diseases, are further projected to fuel the demand for these types of prescription products and boost the global market growth.
High Costs Associated with Certain Prescription Drugs to Limit Market Growth
Despite the increasing incidence of critical diseases, such as cancers and cardiovascular diseases, globally and the higher prevalence of these conditions in developing regions, such as Africa, Latin America, and Asia, there are certain factors that are restraining the adoption of products. One of the major factors restraining the growth of the market is the high costs associated with numerous prescription drugs.
This has led to a small number of patients adopting these drugs, and a significant proportion of these patients face financial hurdles during the usage of these products. In many instances, these prescription drug costs can lie in the range of USD 100,000-500,000, and the conditions are not even curative. For instance, Abiraterone used in the treatment of prostate cancer can cost the patient USD 10,000 per month at its lowest and not even cure the disease. Thus, such restraining factors are anticipated to limit the market growth during the forecast period.
Rising Number of Drugs Prescribed in Healthcare Settings to Boost the Other Prescription Drugs Segment
Based on product type, the market is segmented into generics, orphan, and other prescription drugs. A number of new drugs launched every year fall under several categories, such as biologics, and often do not have generic equivalents of them launched in the near future. Hence, the other prescription drugs segment dominated the market share in 2022. Moreover, the rising number of drugs prescribed by healthcare professionals for the treatment of chronic conditions, such as cancer, diabetes, and others, across the globe further augments the segment share.
The other segment contains critical and life-saving drugs such as oncology, anti-diabetic and cardiovascular drugs and has been instrumental in the dominance of this segment in the global market.
The orphan segment is anticipated to grow at a comparatively higher CAGR over the forecast period. The increasing clinical trials for the development of orphan drugs and rising approval by regulatory agencies are anticipated to increase the uptake of these drugs during the forecast period and drive the market growth.
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Global Rising Prevalence of Cancer to Aid Dominance of the Oncology Segment
In terms of therapy, the market is segmented into oncology, central nervous system, vaccines, immunosuppressants, and others. The oncology segment is anticipated to dominate the therapy segment due to the increasing prevalence of cancer and the high costs attributed to the treatment of the various forms of cancer.
The increasing population is also expected to aid the growth of the vaccines segment due to the increasing need for timely vaccinations, especially in infants and children.
The increasing prevalence of cardiovascular diseases is also anticipated to drive the anticoagulants segment. Increasing organ transplant procedures is also anticipated to drive the growth of the immunosuppressants segments. Moreover, rising demand and sales of immunomodulatory drugs to treat high prevalence of immunological disorders further boost the segment share.
Moreover, the others segment held a dominant share of the market in 2022, owing to the increasing launch and sales of drugs by key players and the rising number of prescriptions of these drugs by healthcare professionals across the globe.
Rising Prescription Drug Spending in Hospital Pharmacies Led to the Dominance of the Segment
In terms of distribution channel, the market is segmented into hospital pharmacies, retail pharmacies & drug stores, and online pharmacies. Some of the key reasons for the dominance of the hospital pharmacies segment is that the therapeutics indicated under prescription drugs can often be only prescribed in hospital settings under the guidance of trained medical professionals. Also, a number of therapeutics used in the treatment of critical diseases, such as cancers and orphan diseases, can only be administered intravenously by trained medical professionals. Such effective administration of therapeutics often allows for the appropriate treatment and management of critical diseases, leading to improved clinical outcomes.
The growing availability of prescription drugs and the rising need for daily medications, such as anti-diabetics, are some of the major factors responsible for the growth of this segment over the forecast period.
The online pharmacies segment is anticipated to grow at the highest CAGR over the forecast period, especially due to the ease provided to patients in the refilling of prescription medications and the ability to acquire drugs from the comfort of their homes.
North America Prescription Drugs Market Size, 2022 (USD billion)
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The North America market stood at USD 539.92 billion in 2022. Some of the prominent reasons for the dominance of the North America prescription drugs market share included the increasing demand for efficient and advanced products in the region, especially due to the high prevalence of several chronic diseases. These factors, along with high healthcare expenditure, robust R&D for drugs in the region, and the presence of prominent companies in the region involved in the product of generic equivalents of key drugs, are responsible for the dominant share of the region in the global market.
The market in Europe accounted for the second largest share in the global market, and reasons for the region’s strong market share include increased demand for advanced prescription products and the product launches of efficient prescription products, including orphan drugs.
Asia Pacific is projected to register a reasonably higher CAGR during the forecast period. New launches of key products in the region and strong demand for these drugs are anticipated to drive the market during 2023-2030. The presence of a large potential patient population and the growing awareness of chronic and serious disorders amongst individuals leading to increased healthcare expenditure are projected to drive the market growth in Asia Pacific during the forecast period.
The rest of the world market comprises Latin America and the Middle East & Africa and is currently in a stage of growth. Increasing use of advanced prescription products and increasing healthcare expenditure are projected to fuel the market growth during the forecast period
Strong and Diversified Product Portfolio of Novartis and Pfizer to Help these Companies Retain a Leading Position
The overall competitive landscape of this market depicts a competition structure where there is a presence of a large number of prominent market players. Two major companies, Novartis and Pfizer, with their strong and diverse product portfolio and presence in key therapeutic areas, such as oncology and vaccines, are prominent reasons responsible for their dominance.
Despite that, a number of other prominent players, such as Roche, Johnson & Johnson, and Sanofi, also have strong market revenue shares in the global market. A number of companies producing generic equivalents of many drugs, such as Dr Reddy’s Laboratories Ltd., and Lupin Pharmaceuticals, Inc., are also expected to launch a number of products in the forecast period. This is projected to positively impact the global market as these companies are expected to gain market share during the forecast period.
An Infographic Representation of Prescription Drugs Market
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The research report provides a thorough analysis of the market. It focuses on key features such as the prevalence of key diseases - by key countries - pipeline analysis, key industry developments, new product approvals, and regulatory scenarios - by key regions. Also, the report offers insights into the market trends and highlights key industry developments. In addition to the above-mentioned factors, the report includes numerous factors that have contributed to the growth of the market in the recent years.
CAGR of 8.9% from 2023-2030
Value (USD billion)
By Product Type, Therapy, Distribution Channel, and Region
By Product Type
By Distribution Channel
Fortune Business Insights says that the global market size was USD 1,090.7 billion in 2022 and is projected to reach USD 1,864.2 billion by 2030.
In 2022, the market value stood at USD 1,090.7 billion.
Growing at a CAGR of 8.9%, the market will exhibit steady growth over the forecast period (2023-2030).
The other prescription drugs segment is expected to be the leading segment in this market during the forecast period.
The anticipated introduction of innovative prescription drugs in the market due to the increased prevalence of chronic and serious diseases, coupled with significant unmet clinical needs, is fueling the product demand.
Novartis AG and Pfizer, Inc. are the leading players in the global market.
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