U.S. Pharmacy Market Size, Share & COVID-19 Impact Analysis, By Type (Branded and Generics); By Therapy Class (Oncology, Anti-diabetics, Autoimmune Diseases, Respiratory, Pain, Nervous System Disorders, Dermatology, Antihypertensive, Mental Health, HIV Antivirals, Multiple Sclerosis, Anticoagulants, Other Cardiovascular, ADHD, GI Products, Viral Hepatitis, Sex Hormones, Antibacterial, Hormonal Contraception, Ophthalmology, and Others), By Setting (Retail Pharmacies, Mail Order/Online Pharmacies, Others), Regional Forecast, 2021-2028

The U.S. pharmacy market size was USD 534.21 billion in 2020 and is projected to grow from USD 560.00 billion in 2021 to USD 861.67 billion by 2028 at a CAGR of 6.3% in the 2021-2028 period. Based on our analysis, the market exhibited a stellar growth of 5.8% in 2020 as compared to the average year-on-year growth during 2017-2020. The impact of COVID-19 has been unprecedented and staggering, with pharmacy witnessing a positive impact on demand across the U.S. amid the pandemic. The fall in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Increasing prevalence of diseases in the U.S., aging population, and increasing healthcare expenditures are some of the major factors driving the growth of the pharmaceuticals market in the country. The increasing number of prescription drugs being introduced in the market, along with rising number of outpatient and inpatient admissions in the country is leading to increasing number of prescriptions being filled by retail pharmacies in the country. This rapid growth in number of prescriptions is leading to rise in number of pharmacies in the country for distribution of these drugs.

• For instance, in 2020, physician offices prescribed around 860 million drugs, and hospital emergency departments provided or prescribed around 336 million drugs. Also, in 2019, an estimated 3.79 billion prescription drugs were billed or dispensed in the U.S.


• Additionally, according to the National Council for Prescription Drug Programs, (NCPDP) data, number of independent pharmacies growing from 20,427 in 2010 to 23,061 in 2019, representing a 12.9% increase in number of pharmacies in the country during 2010-2019.

The geographical expansion of physical stores and pharmacies by leading players in the U.S., such as CVS Pharmacy, WallGreens, is leading to improving accessibility for patients in the U.S. Also, entry of e-commerce giants, such as Amazon, in the online pharmacy segment in the U.S., citing the rapid growth in number of patients shifting online, is poised to further augment the U.S. pharmacy market growth during the forecast period.

Growing Awareness Regarding Health amid COVID-19 Pandemic

The COVID-19 pandemic has had a positive impact on the pharmacy market. Key players reported a significant growth in their revenues from the pharmacy business owing to the significant increase in the number of patients receiving medications at home during the COVID-19 restrictions.

• For instance, CVS Health Corporation witnessed a 5.3% increase in its revenue in the retail business segment in 2020 as compared to the prior year and was valued at USD 91.2 million. The growth was attributable to an increase in demand for its specialty drug.

Moreover, with the COVID-19 outbreak, the home care settings became more important than ever, allowing patients the safety of remaining in their homes and reducing the risk of exposure. Hence, various local drugs witnessed a surge in demand for delivery services and that led to increase in prescription revenue.

LATEST TRENDS

Expansion of ePharmacies and Increasing Penetration of e-Commerce Services to Spur Growth

A larger number of the population prefers doorstep delivery of medical products due to the unavailability of certain products in local retail drug stores or the availability of products at reasonable or low cost. In addition, the increasing penetration and literacy regarding internet usage are anticipated to boost the overall market in the region. For instance, according to the World Bank Data, in the U.S., around 89% of the population is using the internet.

Furthermore, several key players and new start-ups are working on the expansion of the pharmaceutical business in order to cater to the unmet needs of patients in the country. For instance, in November 2020, Amazon.com, Inc. announced two new pharmacy offerings to help customers conveniently purchase their prescription medications. Amazon Pharmacy, a new store on Amazon, allows customers to complete an entire pharmacy transaction on their desktop or mobile device through the Amazon App. The transformation of healthcare from the traditional to the digital system has created immense awareness about the ePharmacies and e-commerce services in the country.

DRIVING FACTORS

Rising Prevalence of Chronic Disease and Growing Geriatric Population to Augment Demand

Globally, the burden of chronic diseases is increasing rapidly. There has been an immense rise in the incidence of diabetes, cancer, chronic immune deficiencies, and congestive heart failure, and others. According to the World Health Organization (WHO), chronic diseases affect approximately 133 million Americans, representing 40% of the total population of the country. This is expected to result in a large patient pool suffering from several chronic diseases, along with patients undergoing therapy at-home settings and long term care centers.

Additionally, the rise in the geriatric population in the country is also contributing to the growth of the market in the country. For instance, according to the Rural Health Information Hub, currently, there are more than 46 million older adults age 65 and older living in the U.S.; by 2050, that number is expected to grow to almost 90 million. These factors are likely to boost the pharmaceutical market in the U.S. during the forecast period.

RESTRAINING FACTORS

Product Recalls and Lawsuits to Hinder Market Growth

The volume of drugs and vaccines is increasing exponentially. However, complications associated with the use of these drugs are a major factor expected to hamper the growth of this market during the forecast period. The complications result in recalls by the regulatory bodies. This naturally creates a larger impact on the brand presence of the company impacting its sales and decline in revenue. For example, in March 2021, Dr. Reddy's Laboratories recalled 10,440 (90-count) and 2, 24,710 (500-count) bottles of Atorvastatin Calcium tablets from the U.S. market. Furthermore, in July 2020, Indian drugmakers such as Lupin, Alembic Pharmaceuticals, and Aurobindo Pharma recalled medicines from the U.S market as per an enforcement report from U.S. FDA. Lupin recalled diabetes medicines while the other two companies recalled psychiatric drugs.

Additionally, filing a lawsuit in the pharmaceutical and pharmaceutical industry directly affects the brand image of the company, therefore, forcing the company to pay huge sums for settlement. This situation also leads to a decline in the sales of products, which ultimately affects the growth of the pharmaceutical market in the country. Therefore, the above-mentioned factors coupled with the presence of a limited reimbursement scenario are anticipated to hamper the U.S. pharmacy market growth during the 2021-2028 period.

SEGMENTATION

By Type Analysis

Branded Segment to Account for a Dominant Share

Based on product, this market is segmented into branded and generics

Branded drugs accounted for a dominating market share in 2020. The increasing number of regulatory approvals for drugs coupled with a robust pipeline of leading players is primarily responsible for its highest U.S. pharmacy market share during the forecast period. For instance, in June 2021, the Food and Drug Administration approved Biogen’s Alzheimer’s disease drug aducanumab, making it the first medication cleared by U.S. regulators to slow cognitive decline in people living with Alzheimer’s. Additionally, the increased prevalence of chronic diseases, diabetes, infectious diseases, etc., has demanded advanced treatment solutions forcing pharmaceuticals to launch multiple drugs for a single disease.

On the other hand, the generic segment is anticipated to grow with the highest growth rate during the forecast timeframe. Patent expiry and cost efficiency are primarily responsible for the segmental growth during the forecast period. According to the U.S. FDA, around 50 drug patents would expire in 2021.

By Therapy Class Analysis

Autoimmune Diseases Dominated the Market in 2020

Based on therapy class, the market is categorized into oncology, anti-diabetics, autoimmune diseases, respiratory, pain, nervous system disorders, dermatology, antihypertensive, mental health, HIV antivirals, multiple sclerosis, anticoagulants, other cardiovascular, ADHD, GI products, viral hepatitis, sex hormones, antibacterial, hormonal contraception, ophthalmology, and others.

The autoimmune diseases segment held the major share in 2020. The dominance is attributable to the increasing prevalence of autoimmune disorders in the U.S. For instance, according to Centers for Disease Control and Prevention data, in the United States, 1 in 4 adults has arthritis. Furthermore, it is estimated that by 2040, 78 million U.S. adults will have arthritis.

The oncology segment is estimated to be the second most dominant therapy class by the end of 2028. The growth is attributable to the higher prevalence of cancer and the increasing number of oncology drugs approvals. For instance, according to National Cancer Institute, in 2020, an estimated 1.8 million new cancer cases were diagnosed in the United States.

By Setting Analysis

Retail Pharmacies Dominated the Market in 2020

Based on setting, the market is categorized into retail pharmacies, mail order/online pharmacies, and others.

The retail pharmacies segment held the major share in 2020. Collaborations of the retail pharmacies with the physician clinics and manufacturers and the use of different coupons and favorable discounted prices to the regular patients are some of the strategies that are anticipated to have a higher impact on the growth of the retail pharmacies segment in the country.

The mail-order/online pharmacies segment is anticipated to witness lucrative CAGR over the forecast period. Drastic growth in the online delivery and purchase of medicines is likely to be observed in the forecasted timeframe owing to the increased adoption of advanced technology by the middle-income population in country. The pandemic crisis has contributed heavily to the preference of online pharmacies over retail.

KEY INDUSTRY PLAYERS

Strong Product Portfolio of Leading Players Aid in Their Dominance

The U.S. market is a semi-consolidated market with top players, such as CVS Health Corporation, Walgreens Boots Alliance, Inc., and Cigna, comprising major portion of the U.S. market. These major players are constantly focusing on launching of brick and mortar pharmacies and online pharmacies with various technological advancements for distribution of drugs and entering into strategic partnership with other players to expand their product portfolio.

• For instance, in June 2020, Nuro partnered with CVS Pharmacy to deliver medicines using its autonomous vehicle.

Additionally, rise in number of prescription filled in the country by leading players is contributing the growth of the player and thus, led to the rise in overall market share of the player.

• For instance, CVS health reported Retail/LTC Segment filled 1,465.2 million prescriptions in financial year 2020. Similarly, according to the Statista, in 2020, U.S. based pharmaceutical retail company Walgreens filled about 818 million prescriptions in the U.S.

Other prominent players include, UnitedHealth Group, Walmart Inc., The Kroger Company, Rite Aid Corporation, among others.

LIST OF KEY COMPANIES PROFILED:

• CVS Health Corporation (Rhode Island, U.S.)


• Walgreens Boots Alliance, Inc. (Illinois, U.S.)


• Cigna (Express Scripts) (Connecticut, U.S.)


• UnitedHealth Group (Optum) (Minnesota, U.S.)


• Walmart Inc. (Arkansas, U.S.)


• The Kroger Company (Ohio, U.S.)


• Rite Aid Corporation (Pennsylvania, U.S.)


• Albertsons Companies, Inc. (Idaho, U.S.)

KEY INDUSTRY DEVELOPMENTS:

• June 2021 - AmerisourceBergen Corporation and Walgreens Boots Alliance, Inc. completed the previously announced strategic agreements under which AmerisourceBergen acquired the majority of Walgreens Boots Alliance’s Alliance Healthcare businesses.


• December 2018 – Cigna completed the previously announced acquisition of Express Scripts Holding Co, this acquisition was intended to expand business in pharmaceutical sector.


• November 2018 – CVS Health Corporation announced that it has completed its acquisition of Aetna. This was intended two leading organizations to establish innovative health care model.

REPORT COVERAGE

The U.S. pharmacy market research report provides a detailed analysis of the market. It focuses on key aspects such as leading companies, type, therapy class, and setting. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors that have contributed to the growth of the market over recent years.

Report Scope & Segmentation