Pharmaceutical Market Size, Share, Growth, Trends 2024 To 2033

Pharmaceutical Market Size and Growth 2024 to 2033

The global pharmaceutical market size was valued at USD 1,607.07 billion in 2023 and is expected to be worth around USD 2,821.63 billion by 2033, growing at a compound annual growth rate (CAGR) of 5.79% from 2024 to 2033.

The pharmaceutical sector is one of the most important industries. It meets 62% of the global vaccine demand and is the world's leading supplier of generic drugs, which account for 20% of the total global supply. Billions of dollars are invested in the pharmaceutical sector every year. Research and development areas are emerging that require significant expenditure to find more effective treatments and therapies. The pharmaceutical market is considered to be one of the highly regulated sectors that continuously provide high-quality drugs for human use to achieve the desired pharmacotherapeutic effects to treat various ailments.

Industry 4.0 of the pharmaceutical industry in the future will contribute to smart automation technology and can support advanced manufacturing such as personalized medicine, additive manufacturing, localized 3D printing of treatments, etc. Industries are currently being shaped by digital transformation as digital services are being integrated into the range of offerings beyond the product. The healthcare industry is being transformed by digitalization. The pharmaceutical market in emerging markets tends to be very different from that of the developed markets. In Latin America, Asia, and certain regions of Africa, financing is predominated by private investment. Moreover, extending the reach of supply chains and improving overall efficiency are also some of the essential components of growth strategies that work well in emerging markets.

Report Highlights

• North America region has dominated the market in 2023, accounted revenue share of 38.60% in 2023.
• By drug type, the branded drug segment has accounted revenue share of 67.80% in 2023.
• By classification, the prescription drugs segment has acconted revenue share of 87.10% in 2023.
• By molecule type, the conventional drugs (small molecules) segment has accounted 55.35% of the total revenue share in 2023.
• By route of administration, the oral segment has accounted revenue share of 58.10% in 2023.
• By formulation, the tablets segment has recorded revenue share of 26.54% in 2023.
• By end user, the hospital segment has reported revenue share of 54.20% in 2023.
• By age group, the adults segment has accounted revenue share of 64.50% in 2023.

Pharmaceutical Market Growth Factors

• Increasing Demand for Vaccines: Vaccination continues to be one of the most secure ways to prevent hospital stays, long-term health issues, and fatalities. The need for vaccination against viruses like West Nile virus and monkeypox, as well as against COVID-19, spurred competition amongst the biggest pharmaceutical companies for developing vaccines. Furthermore, the demand for vaccinations is rising since people are becoming more aware of the need to safeguard themselves against any new health risk.
• Growing Need for Weight Loss Drugs: There has been a groundbreaking demand for weight loss medications worldwide. Therefore, the growing public awareness regarding the risks associated with obesity and the growing need for effective fat-loss solutions may be the cause of the rising popularity of weight-loss medications. Furthermore, the introduction of medications like Ozempic, Wegovy, and Mounjaro which are incredibly effective at helping people lose weight has huge potential to transform many healthcare-related fields, which would fuel market expansion.
• Increasing Affordability of Prescription Drugs: Assurance of getting access to a wide range of medications that are well-suited to the patient's medical requirements and demographics is provided by the pharmaceutical market. In addition, pharmaceutical companies are paying more attention to the implementation of patient assistance programs for individuals who fall into low-income categories, expanding access to life-saving medications in developing nations, and lowering the costs of generic drugs thereby boosting market growth.
• Technological Advancements in the Pharmaceutical Industry: Physiological simulation modeling is a technological development that is likely to propel the market. For instance, Pfizer and Eli Lily used Elastic Compute Cloud (EC2) from Amazon, for running simulation models for early drug discovery that were operational within a few hours. It is therefore anticipated that such technologies would lead to market expansion.

Pharmaceutical Market Trends

• Increasing Use of AI: Healthcare professionals such as doctors, surgeons, and nurses are using artificial intelligence (AI) to optimize the efficiency of their workflows and gain insightful analytics through predictive, AI-powered systems. Generative AI in particular is being used because it excels at analyzing large, diverse, and complex data sets, making it well-suited to assessing potential patient health risks. Generative AI functions as a virtual partner, that gives medical professionals a more complete picture thereby helping them to give more attentive and customized care to the patients. AI is thereby transforming drug discovery by providing conventional procedures with high efficiency and predictive power. Further, AI also helps in speeding up the development of pipelines and lowers inefficiencies in the drug discovery process.
• Proliferation of Digital Therapeutics: Digital therapeutics as an accessible healthcare option for global crises. Digital therapeutics are software-based or digital products that can help treat, manage, or prevent a disease. Integrating pharmaceuticals with digital health technologies and telemedicine will revolutionize healthcare. This includes the use of digital therapeutics, wearable devices, mobile applications, and remote monitoring systems to improve medication adherence, track patient health data, and enable virtual consultations. Such integration improves patient engagement, treatment outcomes, and overall healthcare efficiency.
• Increasing Focus on Precision Medicine: Precision medicine is the customization of any medical intervention to the particulars of each patient's condition. The concept of precision medicine is based on the fact that no two diseases are alike and therefore, different diseases have different therapies and mainly focus on the specific mutations or factors that are causing a patient's illness.
• Growing Need for Biologics and Gene Therapies: Monoclonal antibodies and cell-based therapies are biologics, that are gradually gaining popularity in the pharmaceutical sector. Further, there is also a growing need for such complex biological products in the treatment of a wide range of diseases, like cancer, autoimmune diseases, and genetic disorders. In addition, gene therapy, which is a treatment that involves modifying or replacing damaged genes is likely to be used for treating hereditary diseases that were previously said to be incurable.

Report Scope

Pharmaceutical Market Dynamics

Drivers

Increasing Aging Population and Healthcare Expenditure

• As the global population ages, the demand for pharmaceutical products to treat age-related ailments such as chronic diseases and degenerative diseases is increasing. Moreover, increased healthcare expenditure, especially in emerging markets, is contributing to the growth of the pharmaceutical market as more people are gaining access to healthcare services and medicines.

Increased Prevalence of Chronic Diseases

• Along with the increasing prevalence and awareness of various infectious and chronic diseases, there is a growing number of patients requiring personalized medications, vaccinations, and therapies. In addition, the growing per capita healthcare costs in developed and emerging markets are further causing an increase in the number of patients undergoing treatment. Thus, it is anticipated that the demand for drugs and therapies will grow within the healthcare system and will be driven by the expanding patient population and advancements in medical facilities.

Restraints

Product Recalls and Reputation Damage

• Drug recalls negatively impact brand values, sales, customer relationships, and reputations. This can happen due to product mislabeling, possible contamination, or mediocre manufacturing methods. Pharmaceutical companies' attention is likely to be diverted from their research and development efforts because of the commotion caused due to product recalls, which in turn would impede the development of new treatments for the patient population. Even a minor scandal can cause customers to lose faith in a pharmaceutical company, which can have far-reaching effects on stakeholder relationships and market value.

Regulatory Compliance

• Pharmaceutical companies are subject to many regulations, right from those about clinical trials to standards for manufacturing and distribution. It can sometimes be difficult to comply with these rules and regulations, and breaking them can cost a huge amount of money as fines and also harm the company's reputation.

Opportunities

EmergingSpecialty Pharmaceuticals

• Biosimilars, orphan medications, and medications for rare diseases are considered under specialty pharmaceuticals that represent high growth in the future. Pharmaceutical companies are therefore presented with significant growth opportunities for developing and commercializing such specialized pharmaceuticals due to factors such as the growing awareness of rare diseases and favorable regulatory environment.

Growth of Industry in Emerging Markets

• The expansion of the pharmaceutical industry is fueled by rising demand from developing countries, such as those in Asia, Latin America, and Africa. Further, pharmaceutical sales and investments are being driven in these regions by factors such as growing middle classes, better healthcare infrastructure, and growing populations impacted by various diseases.

Challenges

Ever Changing Healthcare Landscape

• The healthcare landscape is evolving rapidly owing to the emergence of various diseases, shifting patient expectations, and changing demographics. Therefore, pharmaceutical companies require time to adjust to these kinds of changes, develop new and advanced treatments for new diseases, and modify business plans to take into account the ever-evolving healthcare models such as value-based care and personalized medicine.

Disruption in Supply Chain

• The supply chain for pharmaceuticals is highly intricate and heavily regulated. Numerous parties are involved in the process of distribution, transportation, and manufacturing of pharmaceuticals. It can be challenging but at the same time, it is very crucial to guarantee the quality and safety of pharmaceutical products throughout the supply chain.

Pharmaceutical Market Segmental Analysis

Drug Type Analysis

Based on drug type, the global market is segmented into generic drugs and branded drugs. The branded drug segment has dominated the market in 2023.

Generic: The generic drugs segment has accounted revenue share of 32.20% in 2023. When a branded drug's patent expires, generic drugs are introduced into the market. Owing to the lower production and distribution costs of the drugs, generic drug manufacturers offer patients and healthcare systems with cheaper medication options. Also, the high availability of generic drugs has led to strong growth of the segment in the market. Furthermore, the demand for generic medications has been fueled by numerous initiatives taken by the government, insurance companies, and healthcare providers for cost control. Since generic drugs are comparatively less expensive than their brand-name counterparts, they are therefore favored by patients and healthcare systems that are seeking to cut costs.

Pharmaceutical Market Revenue Share, By Drug Type, 2023 (%)

Branded: The branded drugs segment has accounted revenue share of 67.80% in 2023. A pharmaceutical company develops new drugs as branded drugs under patent protection. This protects its drug research investment by giving the pharmaceutical company the sole right to manufacture and sell the branded drug while the patent is in effect. Branded drug names differ from the International Nonproprietary Name (INN), also known as the generic name. Brand-name drugs can be the original drug developed by one company, or several companies can produce the same generic drug, to which each company gives its brand name.

Application Analysis

Based on application, the market is segmented into ophthalmology, oncology, cardiovascular disease, central nervous system & neurological disorders, genetic and rare genetic diseases, others.

Oncology: There is an increase in the various forms of cancer worldwide, which has led to increased funding and research in this field, and the need for innovative and efficient treatments. Further, personalized medicine and targeted therapies have also transformed the treatment of cancer owing to the improved efficacy and reduced side effects of these therapies. In addition, the development of novel cancer drugs has accelerated through partnerships between pharmaceutical companies and academic institutions.

Ophthalmology: The increasing number of eye diseases such as glaucoma and refractive errors is driving the demand for ophthalmic services and treatments. The administration of eye medications, typically in the form of eye drops, is known as ophthalmic drug administration. Topical formulations are used in the treatment of many eye diseases. These conditions include but are not limited to, bacterial infections, dry eyes, glaucoma, and eye injuries. Furthermore, advancements in tissue engineering and stem cell therapy in regenerative medicine are creating new avenues for the treatment of ocular disorders and enhancing tissue regeneration.

Cardiovascular Disease: It is anticipated that the number of patients receiving a cardiovascular disease diagnosis will rise due to the rising prevalence of these conditions in the general population and the growing global concern about them. Patients' demand for cardiovascular medications and therapies is rising concurrently with increased awareness of the available treatment options.

Central Nervous System & Neurological Disorders: Any form of disorder related to the nervous system is generally referred to as central nervous system disease. However, due to the poor understanding of the underlying causes and therapeutic approaches for these disorders, developing new drugs in this field is a challenge even for companies that have previously developed breakthrough drugs. The increasing prevalence of neurological diseases and the rising diagnosis rates in developed and emerging countries result in a large pool of patients being treated. Furthermore, advances in the diagnostics and therapy of central nervous system (CNS) diseases are expected to increase the treatment rate worldwide.

Genetic and Rare Genetic Diseases: Translational research and drug discovery for rare genetic diseases has increased rapidly. Although rare diseases have a tremendous impact overall, there is a significant gap between basic research and clinical intervention. There are now opportunities to accelerate drug development to treat rare diseases. Disease foundations and research centers worldwide are focused on better understanding rare diseases. Rare diseases are typically genetic diseases; therefore, using pharmacogenetics to develop treatments and using whole genome sequencing to identify the etiologies for such diseases are appropriate strategies.

Others: The others segment includes gastrointestinal diseases, diabetes, endocrinology, and nephrology. Gastrointestinal diseases are gastrointestinal diseases that affect the colon, small and large intestine, and rectum. The growing geriatric population, geriatric incidents, overcrowding in hospital outpatient departments (HOPD), and increasing demand for outpatient treatment are expected to increase the cases of gastrointestinal disorders. Gastrointestinal therapies include a wide range of interventions that include medications for relieving symptoms, and improving the overall function of the gastrointestinal system and the patient's quality of life. Diabetes is one of the chronic diseases that lasts for a long time and causes damage to the heart, blood vessels, kidneys, eyes, nervous system, and blood sugar regulation. The number of people with diabetes is increasing worldwide, partly due to increasing prevalence rates in emerging markets and technological advances and partly due to the increase in the world population. The prevalence of diabetes is also expected to increase due to rising obesity rates, sedentary lifestyles, and unhealthy diets. Diabetes is treated with many classes of medications that can be taken orally, intravenously, or subcutaneously. The increasing number of people with diabetes, especially type 2 diabetes, and the growing need for effective drug treatments to manage the condition. Endocrine disorders are becoming increasingly common and affecting more and more teenagers, and intense research and development efforts are leading to drugs and treatments to treat these disorders.

Classification Analysis

Based on classification, the market is segmented into prescription drugs, OTC drugs. The prescription drugs segment has dominated the market in 2023.

Prescription Drugs: The prescription drugs segment has accounted revenue share of 87.10% in 2023. The increasing R&D investments by the key market players in developing new drugs that are mainly used to treat chronic diseases. With the increasing prevalence of such conditions, the demand from patients has increased due to unmet clinical needs and the desire for favorable therapy outcomes. A number of these chronic diseases are commonly observed in the patient population, necessitating the use of multiple recommended therapies. Hence, major pharmaceutical companies are involved in clinical trials for the development and ultimately approval of new products. Moreover, the rising hospitalization and prescription rates are factors that further drive the growth of the overall pharmaceutical industry.

Pharmaceutical Market Revenue Share, By Classification, 2023 (%)

OTC Drugs: The OTC drugs segment has accounted revenue share of 12.90% in 2023. The increasing inclination towards self-care and healthcare trends, coupled with the empowerment of consumers to take charge of their health. OTC medicines, which are available without a prescription, allow people to treat common illnesses and health problems on their own, which is benefiting the market growth. The market has grown even more owing to increasing consumer education and awareness for over-the-counter (OTC) products, as well as convenient access through pharmacies and retail stores. Commonly used OTC categories include analgesics, allergy medications, cough and cold remedies, and digestive aids.

Formulation Analysis

Based on formulation, the global market is segmented into tablets, capsules, injectable, sprays, suspension and powder. The tablets segment has generated highest revenue share in market in 2023.

Tablets: Tablets are solid dosage forms used for oral medications, they are the most widely produced and sold drug form. Because of their tamper-evident nature, affordability, ease of handling and packaging, and high production efficiency, tablets are used more frequently than capsules. Tablets are the easiest to manufacture for a variety of specializations, including antidiabetics, anti-inflammatories, antacids, vitamins, and antiallergics.

Capsules: Capsules are solid dosage forms in which the active drug is enclosed in either a hard or soft soluble container or a shell made of a suitable form of gelatin. Capsules are easier to swallow. They are also useful when the drug needs to be mixed with oil or other liquid to aid absorption in the body. There are essentially two types of capsules used for pharmaceutical and nutraceutical products – hard capsules and soft capsules. Traditional capsules are generally made out of gelatin, which is a widely used animal product.

Injectable: Drugs that are injected into the body through injections are known as injectables. Injections are easy to use and have many benefits, such as self-administration, credibility, accuracy, prefilled syringes that come with fixed doses, compactness, and excellent patient comfort. Drugs can be injected into a vein (intravenously), a muscle (intramuscularly), or under the skin (subcutaneously).

Sprays: Pharmaceutical sprays are drugs administered orally or nasally through breathing. In sprays, a liquid or solid formulation is converted by atomization into a dynamic mixture that is dispersed into gas. An atomized spray, as shown below, can enter the respiratory tract and provide local or systemic medicinal effects. Once the active pharmaceutical ingredients (API) are mixed into a spray concentrate, they are pumped into the sprayer, which atomizes it during administration. These aerosols offer the advantage of rapid onset of action and avoid the first-pass effect and deterioration of the gastrointestinal tract.

Suspensions: A pharmaceutical suspension is a heterogeneous system in which finely divided solid particles are dispersed in a liquid medium. Unlike solutions in which solutes are completely dissolved, suspensions contain particles that are only partially soluble or insoluble in the liquid. Suspensions are often used to administer poorly water-soluble drugs that cannot be formulated as aqueous solutions. Drugs with an unpleasant taste should preferably be formulated as a suspension to reduce the interaction of the drug with the taste receptors in the mouth.

Powders: A drug consisting of a solid dry substance in the form of finely divided particles and used for external and internal use in the form of a dosage is called a pharmaceutical powder. In its finely divided state, it is a solid substance (between 10 nm and 1000 µm) that is usually sorted by crushing, grinding, or grinding.

Pharmaceutical Market Regional Analysis

The pharmaceutical market is segmented into various regions, including North America, Europe, Asia-Pacific, and LAMEA. North America was highest revenue holder in the market.

Why is North America dominated the pharmaceutical market?

The North America pharmaceutical market size was valued at USD 620.33 billion in 2023 and is expected to reach around USD 1,089.15 billion by 2033. The growth of the market in North America is attributed to access to high-quality medicines, extensive knowledge about healthcare, high healthcare expenditure per capita, and strong GDP. Furthermore, the implementation of various strategic initiatives by both established and young pharmaceutical companies is further driving regional growth.

Europe Pharmaceutical Market Trends

The Europe pharmaceutical market size was estimated at USD 472.48 billion in 2023 and is projected to hit around USD 829.56 billion by 2033. The market expansion in the European region is anticipated to be driven by factors such as rising patient awareness regarding the different diagnostic and treatment options for various medical conditions that are available in the region. The region also boasts a highly developed healthcare system with a well-established regulatory framework and a strong emphasis on research and development. In addition, growing investments in precision medicine, personalized therapies, and biotechnology are also driving the expansion of the pharmaceuticals market in Europe. Furthermore, during the projected period, higher sales of medications and vaccines for chronic illnesses are also anticipated to fuel the growth.

Why is Asia-Pacific expected to drive strong growth in the pharmaceutical market?

The Asia-Pacific pharmaceutical market size was accounted for USD 366.41 billion in 2023 and is predicted to surpass around USD 643.33 billion by 2033. Several factors including a growing aging population, increasing disposable income, improved healthcare facilities, and a faster rate of research into new therapeutics, are expected to drive market growth in the Asia-Pacific region. The demographics of the region are diverse. Apart from established countries such as Japan, South Korea, Taiwan, Singapore, and Australia, there are fast-growing economies such as Thailand, Indonesia, Malaysia, Vietnam, Bangladesh, and the Philippines, as well as China and India.

LAMEA Pharmaceutical Market Continuing to Expand

The LAMEA pharmaceutical market was valued at USD 147.85 billion in 2023 and is anticipated to reach around USD 259.59 billion by 2033. In the LAMEA region, which comprises nations like Argentina, Brazil, Mexico, the United Arab Emirates, Saudi Arabia, Africa, and others the pharmaceutical sector has expanded dramatically. The market in the LAMEA region is continuing to expand owing to population growth, a rise in chronic illnesses, better access to healthcare, and a growing healthcare infrastructure. In addition, the region's governments have passed various legislations to support domestic pharmaceutical production and also launched programs for expanding access to high-quality healthcare, which has in turn opened doors for pharmaceutical companies to grow in the region.

Pharmaceutical Market Top Companies

• F. Hoffmann-La Roche Ltd.
• Novartis AG
• Aurobindo Pharma
• AbbVie Inc.
• Johnson & Johnson Services, Inc.
• Abbott Laboratories 
• Bayer AG 
• Merck & Co., Inc.
• AstraZeneca
• Boehringer Ingelheim International GmbH
• Pfizer Inc.
• Amgen Inc.
• Bristol-Myers Squibb Company
• Sanofi
• Eli Lilly and Company 
• Gilead Sciences, Inc.
• Lupin Pharmaceuticals Inc.
• GSK plc
• Takeda Pharmaceutical Company Limited
• Albemarle Corporation
• Baxter
• Ispen
• Sun Pharmaceuticals Industries Ltd

The global market is fragmented and includes many players such as Pfizer Inc., Johnson & Johnson Services Inc., AstraZeneca, and others. The major players are focusing on increasing their R&D investments for the development process of novel therapies to meet the unmet demand of the patient population. GSK plc acquired clinical-stage biopharmaceutical company Affinivax, Inc. in May 2022 to strengthen its vaccine R&D pipeline, gain access to new technologies, and expand its geographic reach in the Boston area.

In May 2022, the European Commission (EC) approved Johnson & Johnson Services, Inc.'s T-cell therapy CARVYKTI for the treatment of adult patients with relapsed and refractory multiple myeloma. Furthermore, the growing alliances and acquisitions by the players to strengthen their businesses and increase their market shares are expected to drive the future growth of the market.

CEO Statements

Steve Collis, Chairman & CEO of Cencora

• "If the next generation of AI can potentially solve complex health issues, such as cancer, it’s imperative that we invest in these technologies."

Erin Satterwhite, CEO of Optum Specialty Pharmacy

• "The prevalent focus on annual or quarterly value realization appears to discourage embracing a longer-term perspective,but there’s a crucial need to advocate for a broader view to instigate the necessary changes."

Recent Developments

Key players in the pharmaceutical industry are pivotal in delivering a variety of innovative construction solutions, such as prefabrication techniques, sustainable materials, and advanced digital technologies. Some notable developments in the pharmaceutical sector include:

• In October 2024, Lundbeck acquired Longboard Pharmaceuticals and declared a major advancement in its focused innovator strategy. The purpose of this strategic agreement, which was estimated to be worth USD 2.6 billion, was to improve Lundbeck's capacity to treat uncommon neurological conditions, specifically developmental and epileptic encephalopathies (DEEs).
• In October 2024, Teclistamab (Tecvayli), a drug manufactured by Johnson & Johnson, received a positive recommendation from NICE for use as a fourth line in the NHS in England and Wales. This new treatment is intended for myeloma, a type of blood cancer that affects plasma cells.
• In October 2024, Sanofi announced the launch of its high-dose egg-based quadrivalent influenza vaccine (QIV-HD) in the UK. This vaccine is intended for people aged 65 and over, as well as clinically vulnerable people aged 60 to 64 years.
• In June 2023, Pfizer, Inc. and Samsung Biologics entered into a strategic partnership for the long-term manufacturing of biosimilars. Under the agreement, Pfizer will receive additional manufacturing capacity from Samsung Biologics for a biosimilar portfolio in immunology, oncology, and inflammation.
• In May 2023, Pfizer Inc. received FDA approval for PAXLOVID (nirmatrelvir tablets and ritonavir tablets), used to treat patients with mild to moderate COVID-19. In October 2022, the company announced plans to launch 10 new formulations, including two each for oncology and immune inflammation, and five vaccines.

These advancements mark a notable expansion in the pharmaceutical market, driven by strategic acquisitions and innovative projects. The focus is on boosting sustainability, enhancing construction efficiency, and broadening product offerings to meet diverse building needs.

Market Segmentation

By Drug Type

• Generic
• Branded

By Pharmaceutical Molecule Type

• Biologics & Biosimilars (Large Molecules)
  
  • Monoclonal Antibodies
  • Cell & Gene Therapy
  • Vaccines
  • Others
• Conventional Drugs (Small Molecules)

By Application

• Cardiovascular diseases
• Oncology
• Diabetes
• Neurological disorders
• Infectious diseases
• Respiratory diseases
• Mental health disorders
• Gastrointestinal disorders
• Autoimmune diseases
• Women’s health Diseases
• Genetic and rare genetic diseases
• Dermatological conditions
• Obesity
• Renal diseases
• Liver conditions
• Hematological disorders
• Eye conditions
• Infertility conditions
• Endocrine disorders
• Allergies
• Others

By Classification Type

• Prescription Drugs
• OTC Drugs

By Formulation

• Tablets
• Capsules
• Injectable
• Sprays
• Suspensions
• Powders
• Other

By Pharmaceutical Route of Administration

• Oral
• Topical
• Parenteral
  
  • Intravenous
  • Intramuscular
• Inhalations
• Other

By Age Group

• Children & Adolescents
• Adults
• Geriatric

By End User

• Hospitals
• Clinics
• Others

By Regions

• North America
• Europe
• APAC
• LAMEA