Pharmacy Market Size, Share & Industry Analysis, By Type (Prescription and OTC), By Setting (Hospital Pharmacies, Retail Pharmacies, E-pharmacies, and Others), and Regional Forecast, 2024-2032

The global pharmacy market size was valued at USD 2,051.5 billion in 2023. The market is projected to grow from USD 2,187.5 billion in 2024 to USD 3,886.3 billion by 2032, exhibiting a CAGR of 7.4% during the forecast period.

Pharmacies are physical or online stores where pharmaceuticals and medical products are primarily sold. They also offer various items typically found in such locations, including dietary supplements, cosmetics, and health-related products. Many pharmaceuticals require a prescription, while the remaining product selection is available over the counter (OTC).

The pharmacy market is influenced by several key factors, including the growing prevalence of chronic illnesses, an aging population, and increasing healthcare access worldwide. Advances in technology, such as the rise of digital pharmacies and telemedicine, are also contributing to market expansion. Additionally, an increased demand for over-the-counter (OTC) medications, wellness products, and personalized healthcare solutions, combined with supportive regulatory changes and a focus on preventive care, continues to drive growth within the pharmacy sector.

The COVID-19 pandemic had a significant impact on the market growth. During the crisis, pharmacies became essential in providing medications, Personal Protective Equipment (PPE), and other healthcare supplies. The demand for over-the-counter (OTC) medicines, immunity-boosting supplements, and sanitizers surged during this period. E-pharmacies witnessed rapid growth due to lockdowns and social distancing measures. However, supply chain disruptions and delays in non-essential treatments posed challenges for the sector during the pandemic.

Pharmacy Market Trends

Increasing Adoption of E-pharmacies to Provide Better Medications to their Homes

The increasing adoption of e-pharmacies is shaping the pharmacy market, primarily due to the demand for greater convenience and a wider selection of products. In recent years, consumers become more comfortable with digital platforms, and e-pharmacies have emerged as a preferred option for accessing prescription medications, over-the-counter (OTC) drugs, and various health-related items from the comfort of their homes.

• For instance, according to an article published by Invest India in June 2021, in India, with increasing customer adoption, there has been a rise in investor interest in e-pharmacies, with the sector garnering USD 700 million in investments in 2020 alone. The expansion of e-pharmacies is expected to increase the pharmacy market in the future.

Furthermore, the growing adoption of smartphone usage and advancements in digital health technologies allow for seamless ordering and delivery processes. E-pharmacies often provide features, such as automatic refills, reminders for medication adherence, and personalized health advice, enhancing the overall consumer experience. Furthermore, they frequently offer competitive pricing, discounts, and access to a broader range of products that may not be available at retail pharmacies.

Request a Free sample to learn more about this report.

Pharmacy Market Growth Factors

Growing Prevalence of Chronic Diseases to Drive Market Growth

The rising prevalence of chronic diseases, such as diabetes, hypertension, cardiovascular disorders, and respiratory illnesses, is a major driver of growth in the pharmacy market. As the global population ages and lifestyles become more sedentary, the incidence of these long-term conditions has increased significantly. Patients with chronic illnesses require continuous medical management, including regular medication use, which boosts the demand for prescription drugs and pharmaceutical services.

• For instance, in July 2022, the Cleveland Clinic reported that 20.0% of the meningococcal disease patients who survived after the treatment with antibiotics will have long-term consequences such as deafness, nerve damage, limb loss, kidney damage, or brain damage. This is expected to drive the patients toward preventive solutions to avoid such complications, thereby driving the sales of pharmacies in the long run.

Pharmacies play a crucial role in providing medications and essential health monitoring and management services. Pharmacists often collaborate with healthcare providers to ensure proper medication adherence, dosage adjustments, and drug interactions, particularly for patients dealing with multiple chronic conditions. This has led to increased demand for specialized pharmacy services, further expanding the role of pharmacies in chronic disease care.

Additionally, the growing use of over-the-counter (OTC) products, such as supplements and devices for self-monitoring, such as blood pressure monitors and glucose meters, supports the need for comprehensive pharmacy services. As chronic diseases continue to affect millions of people globally, the demand for medication and healthcare solutions provided by pharmacies is expected to grow during the forecast period.

Increasing Healthcare Expenditure on Pharmaceuticals to Boost Market Growth

In recent years, governments, private entities, and individuals have allocated more resources to healthcare, and the demand for pharmaceuticals has risen. This increased investment enables better access to medical services and treatments, leading to higher consumption of prescription drugs, such as specialty drugs, over-the-counter (OTC) medications, and health-related products.

• For instance, according to OECD data, the U.S. spent USD 1,448.1 per capita in 2021 and USD 1,280.8 per capita in 2019. Such an increase in the spending on pharmaceuticals is expected to increase the demand for pharmacies in the U.S.

Governments in many countries are expanding healthcare coverage, which often includes subsidies for essential medicines. This broadens the population's access to necessary treatments, increasing the overall demand for pharmaceuticals. Similarly, private healthcare providers and insurers are investing in broader drug coverage, driving consumption of both branded and generic medications. Moreover, healthcare spending on research and development (R&D) is resulting in new and innovative treatments, further stimulating the pharmacy market.

In addition, rising healthcare budgets in developing countries are enhancing infrastructure and improving drug distribution channels, allowing pharmaceutical products to reach a wider population. With this expanded access, pharmacies see higher sales volumes. Increased spending also supports advancements in healthcare technologies, such as digital health tools and telepharmacy, making it easier for patients to access medications and improve treatment adherence.

RESTRAINING FACTORS

Increase in the Drug Costs Might Hamper Market Growth

As prescription drug prices escalate, both patients and healthcare systems face increasing financial burdens, limiting access to essential medications. Many patients, particularly in low- and middle-income regions, struggle to afford high-cost medications, leading to reduced adherence to prescribed treatments. This, in turn, affects the overall demand for pharmaceuticals and hampers market growth.

For governments and healthcare insurers, the rising cost of drugs puts immense pressure on healthcare budgets. As a result, policymakers may impose price controls or restrictions on drug reimbursements, which can reduce profit margins for pharmaceutical companies. In extreme cases, some high-cost drugs may be excluded from insurance coverage or made available only to a limited number of patients, further restricting pharmacy market growth.

Additionally, high drug prices often lead to public backlash and calls for reform, prompting stricter regulations and pricing scrutiny. Pharmaceutical companies may face increasing pressure to justify the costs of new medications, especially in cases where pricing appears disproportionate to its therapeutic benefits.

Pharmacy Market Segmentation Analysis

By Type Analysis

Prescription to Hold Largest Share Owing to its Large Adoption Among Patients

Based on type, the market is segmented into prescription and OTC.

In 2023, the prescription segment held the largest share of the pharmacy market due to the growing prevalence of chronic diseases, such as diabetes, cancer, and cardiovascular conditions, which require long-term medication. Advances in pharmaceutical research also contribute to the development of specialized prescription drugs targeting these complex health conditions. Moreover, aging populations, particularly in developed regions, drive demand for prescription medications.

The OTC segment holds a significant share of the pharmacy market. The segmental growth is due to the increasing health awareness and a growing focus on self-care, people are turning to OTC products for managing minor ailments such as colds, allergies, and pain relief without the need for prescriptions. Additionally, expanding retail and e-commerce channels have made OTC drugs widely available, further boosting sales. OTC products are often more affordable, encouraging consumers to opt for these medications, which contributes to the segment's substantial market share and continuous growth.

To know how our report can help streamline your business, Speak to Analyst

By Setting Analysis

Retail Pharmacies to Hold Majority Share Due to Presence of Large Number of Drugs Availability

Based on setting, the market is segmented into hospital pharmacies, retail pharmacies, e-pharmacies, and others.

Retail pharmacies are anticipated to account for the largest share of the market. These physical stores often offer a broad range of healthcare products beyond medications, such as wellness and personal care items, which drives foot traffic and sales. Additionally, the growing trend of chain pharmacies, which provide standardized services, loyalty programs, and expanded healthcare offerings such as vaccinations, has strengthened the position of the retail pharmacies segment in the overall market.

In 2023, the hospital pharmacies segment held a substantial pharmacy market share. The number of patient admissions in hospitals is increasing owing to the rising prevalence of chronic conditions. The patient admissions are expected to increase the adoption of prescriptions, which boosts the hospital pharmacies' revenue. Also, the increasing number of specialized hospitals is the major factor expected to have an impact on the growth of the hospital pharmacies segment during the forecast period.

E-pharmacies segment is growing rapidly and gaining a significant share of the pharmacy market due to its convenience, accessibility, and competitive pricing. Consumers increasingly prefer online platforms for purchasing medications, especially for chronic conditions, as it allows for home delivery, easier price comparisons, and access to a wider range of products. The rise of telemedicine has also contributed to the growth of e-pharmacies, making it simpler for patients to obtain prescriptions and medications digitally.

• In September 2021, Yikang, a retail pharmacy chain leader in Northwest China, invested in online channels and digitalization. It has created a customer base of more than 10 million members for its mobile application and mini-programs.

REGIONAL INSIGHTS

As per region, the market is segmented into North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

To get more information on the regional analysis of this market, Request a Free sample

North America dominated the market with a revenue of USD 785.0 billion in 2023 and is expected to continue its dominance during the forecast timeframe. The share is due to increasing healthcare spending, the high prevalence of chronic diseases such as diabetes and cardiovascular conditions, and the aging population. The region is also at the forefront of pharmaceutical innovation, with extensive R&D investments leading to the introduction of new drugs. Additionally, the rise of e-pharmacies, telemedicine, and personalized medicine enhances access to medications.

• According to a 2021 report published by the International Diabetes Federation, there are approximately 537 million adults living with diabetes as of 2021, which is projected to rise to 430 million by 2030.

European governments have robust healthcare systems, which ensure access to prescription medications and other healthcare services. The region also has strong regulatory frameworks that facilitate the development and approval of new drugs, including biosimilars. Furthermore, increasing awareness of preventive healthcare and the rise in self-medication trends contribute to the growth of the over-the-counter (OTC) segment, boosting overall pharmacy sales across European countries.

The Asia Pacific market is expected to grow at the highest CAGR over the projected years. The region has seen a surge in chronic disease cases, driving demand for both prescription and OTC medications. Additionally, government initiatives to improve healthcare infrastructure and drug access in developing economies, such as China and India, have further accelerated the expansion of the pharmacy market in this region.

The Middle East & Africa and Latin America markets are expected to grow at a significant CAGR during the forecast period. The growth is due to improved healthcare infrastructure, rising disposable incomes, and increasing government investment in healthcare. A growing awareness of preventive healthcare, along with the expanding prevalence of chronic diseases, is driving demand for both prescription and OTC medications.

KEY INDUSTRY PLAYERS

Companies with Advanced Product Portfolios to Hold Key Market Share

The competitive landscape of the market reflects a fragmented structure with the presence of a few market players with significant revenue share in the global market. CVS Health, Walgreens Boots Alliance, Inc., Kroger | The Kroger Co held a significant market share in 2023. CVS Health is in a prominent position due to its strong geographical presence, robust and diversified medications, along with OTC products, and large customer base across the globe. Furthermore, the focus on new launches is expected to strengthen its position in the global market.

Other companies operating in this market include Target Brands, Inc., Bellin Health Systems, Geisinger Health, and other small & medium-sized players. These companies are engaged in various strategic activities, such as the introduction of various retail operations and increasing business revenue in the long run.

List of Top Pharmacy Companies:

• Walmart Inc. (U.S.)


• CVS Health (U.S.)


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


• Kroger | The Kroger Co (U.S.)


• Kaiser Foundation Health Plan, Inc. (U.S.)


• Target Brands, Inc. (U.S.)


• Bellin Health Systems (U.S.)


• Geisinger Health (U.S.)


• Rite Aid Corp. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• June 2024 - Infosys Limited collaborated with Nihon Chouzai (TSE), Japan's leading dispensing pharmacy chain. This collaboration expanded healthcare access in Japan with enhanced online medication services in the country.


• April 2024 - PlatinumRx announced the funding of USD 800,000 in its seed round from India Quotient. They announced the deployment of the capital to augment its warehousing and distribution network in India.


• March 2024 - Eli Lilly and Company and Amazon Pharmacy entered into a partnership to help deliver the weight loss drug Zepbound and other medicines to patients.


• August 2020 - Amazon, Inc. launched an internet pharmacy in India, marking its entry into the country's online medicine sector. This pharmacy offered prescription, over-the-counter and traditional Ayurveda medication as well as basic health devices.


• August 2020 - Flipkart announced its plans to enter the e-pharmacy business in partnership with PharmEasy to enhance its presence in India.

REPORT COVERAGE

The research report extensively covers the competitive landscape, emphasizing key industry developments such as mergers, partnerships, and acquisitions. It also offers insights into the number of pharmacies in key countries and developments, industry trends within the market and analyzes various segments across different regions. Additionally, it profiles key companies that provide pharmacy and analysis of the COVID-19 pandemic on the market. The report includes qualitative and quantitative insights that foster market growth.

To gain extensive insights into the market, Request for Customization

Report Scope & Segmentation