Global pharmaceutical market is projected to witness a CAGR of 6.52% during the forecast period 2024-2031, growing from USD 1607 billion in 2023 to USD 2663.58 billion in 2031. Under the influence of inflating disease burden, growing geriatric population, and government efforts to enhance pharmaceutical access for people, the market is anticipated to thrive further at a higher momentum during the forecast period.
Pharmaceutical products play a pivotal role in the healthcare sector and drive a major impact on the entire process of caregiving. With growing advancements in healthcare and pharma industry, rising disease burden and subsequent inflation in demand for pharmaceutical products are some of the major driving forces of the market. Regulatory approvals and patent landscape determine the market status of a particular drug. The pharmaceutical market is up for continued growth, driven by demographic changes, technological advancements, and the increasing global demand for healthcare solutions. As emerging markets strengthen their positions, the dynamics of the global pharmaceutical landscape will evolve, presenting both challenges and opportunities for industry stakeholders. The new drug launches keep this market active, for instance, the United States Food and Drug Association (USFDA) approved 142 novel drugs between 2021-2023, out of which 50 drugs were approved and launched in 2021, 37 drugs in 2022, and 55 drugs in 2023.
Rising Burden of Global Disease to Increase the Global Pharmaceutical Market Size
The global disease burden has been on rise from last few decades and is anticipated to keep rising in future due to changes in lifestyle and growing global population. The demand is mainly driven by the need for effective treatments, pharmaceutical innovation, and global health initiatives aimed at addressing health disparities across countries. The strategic use of global disease burden case can be useful for pipeline investment tool and take advantage of market opportunity in the forecast period. The National Institute of Health (NIH) projects a 99.5% (95.1%-107.9%) increase in the number of adults 50 years of age and older with at least one chronic illness by 2050, from 71.522 million (69.065-73.781) in 2020 to 142.66 million (134.74-153.39). An estimated 48 million people (or 47% of deaths globally) are expected to die from severe health-related suffering by 2060, an 87% increase from 26 million in 2016. It is anticipated that 83% of these deaths will occur in low and middle-income countries.
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Government Support to Boost Pharmaceutical Market
Governments across the globe are actively boosting their pharmaceutical sectors through various initiatives such as increased investments in research and development (R&D), improving regulatory frameworks to ease the conduct of businesses, and implementing production-linked incentive schemes to boost the manufacturing and supply chains. Initiatives in major pharmaceutical producing countries like India’s focus on improving healthcare access and affordability is expected to add to the market growth. India’s National Policy on Research and Development aim to foster collaboration between industry and academia, and programs such as Ayushman Bharat and Pradhan Mantri Bhartiya Janaushadhi Pariyojana promote the pharmaceutical market. Similarly, the United States government, is working on multiple fronts through USFDA, NIH, and other organizations to enhance the pharmaceutical availability, while European governments working on subsidies, fundings, and enhancing supply chain.
Dominance of Branded Drugs in the Pharmaceutical Market
The branded drugs segment is anticipated to contribute with larger market share in pharmaceutical market due to inflated cost and high demand. Branded drugs are highly specialized and are covered by patents to be exclusive to only a single manufacturer, which significantly inflates the market price for branded drugs. The branded drugs become generic and open to other market players for production and marketing after the expiry of patents on it, and generic drugs are comparatively much cheaper due to competition in the market. The newly launched drugs add more share to this segment and robust pipeline of innovative drugs from various market players is anticipated further to increase the market share of branded drug segment. For instance, USFDA approved 23 drugs till July 2024 and around 430 clinical trials are in third phase which are expected to be completed in 2024, resulting into launch of more drugs.
North America Dominates Pharmaceutical Market Share
North America is anticipated to demonstrate dominance in the global pharmaceutical market, owing to enhanced access to high-value medications, extensive awareness about healthcare, high per-capita healthcare expenditure, and firm gross domestic product (GDP) condition of North American countries like the United States and Canada. High reliance on prescription drugs, and strict regulatory policy impact the market in the region. Strategic partnerships among market players in the region contribute to the dominance of the region. For instance, in 2024, Isomorphic Labs announced strategic collaborations with two major pharmaceutical companies, Eli Lilly and Novartis, which could be valued at nearly USD 3 billion, excluding potential royalties from future drug sales. These partnerships are focused on multi-target drug development involving small molecules and feature a combination of upfront and milestone payments, highlighting Isomorphic’s innovative approach to drug design and its progress in the pharmaceutical industry.
Future Market Scenario (2024 – 2031F)
1. Government and regulatory attempts across the countries to reduce the cost of drugs is anticipated to bring a major disruption in the market. These attempts include reducing drug companies’ exclusivity window, policy reforms to control drug costs, and forming stricter regulatory policies.
2. Demographic shift in various countries such as Japan, Spain, Switzerland, and others is anticipated to impact the demand of specific type of drugs in the forecast period. Meanwhile, economic imbalance is expected to further define the future market scenario.
Report Scope
“Pharmaceutical Market Assessment, Opportunities and Forecast, 2017-2031F”, is a comprehensive report by Markets and Data, providing in-depth analysis and qualitative and quantitative assessment of the current state of global pharmaceutical market, industry dynamics, and challenges. The report includes market size, segmental shares, growth trends, opportunities, and forecast between 2024 and 2031. Additionally, the report profiles the leading players in the industry, mentioning their respective market share, business models, competitive intelligence, etc.
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