Impact of COVID-19 on Pharmaceuticals Market Size, Share & Industry Analysis, By Type (Drugs (Prescription Drugs and OTC Drugs), Vaccines), By Indication (Anti-viral, Anti-infective, Anti-hypertensive, Oncology, Respiratory Disease, Cardiovascular Disorders, Neurology Disorders, Diabetes, and Others) By Distribution Channel (Hospital Pharmacies, Retail Pharmacies, and Online Pharmacies), and Regional Forecast, 2020-2027

The global pharmaceuticals market size was USD 1,230.2 billion in 2019 and is projected to reach USD 2,151.1 billion by 2027, exhibiting a CAGR of 7.0% during the forecast period.

According to the research study by PricewaterhouseCoopers, healthcare is projected to be the largest R&D spending sector in a few years, and the emergence of the COVID-19 pandemic has diverged the R&D spending towards coronavirus disease. There has been a surge in healthcare spending for the past ten years due to the burden of treating untreatable disorders and chronic diseases.

According to the IQVIA report, healthcare investments are growing rapidly and are reflecting confidence in medical innovations. For instance, Venture Capital firms invested over USD 23 billion in 2018, coupled with the world’s largest pharma companies recorded more than USD 100 billion in research and development spending. Therefore, to provide patient access to treatment without unaffordable out-of-pocket cost, today’s development pipeline represents the frontier in having the potential to transform the lives of people during the forecast period.

COVID-19 Pandemic Led to Disruption of Majority of R&D Projects

The COVID-19 pandemic has moderately hampered the growth of the pharmaceutical industry in three main ways, i.e., by directly affecting production and demand, by its financial impact on manufacturing firms, and by creating supply chain and market disruption. For many drugs/vaccine markets, the pandemic’s impact is largely predictable. This has resulted in the products essential for delivering patient care and treatment such as various drugs for infectious disease, respiratory disease, vaccines for diabetes, influenza, etc., to experience exceptionally high demand and receive the necessary funding. However, non-essential products are left with limited or no budget.

The novel coronavirus has forced the pharma industry to adapt to the disruption that has hit the productivity as well as the clinical trials of the companies in many ways. The imposition of lockdown measures urged the R&D personnel as well as clinical trial participants to stay home to avoid the infection. For instance, in March 2020, companies such as Eli Lilly, Pfizer, Provention Bio, Inc., Bristol-Myers Squibb, and CROs (IQVIA, Icon, etc.) officially announced the postponing of the clinical trials that were underway. Also, according to the research of clinicaltrials.gov, approximately 2522 clinical trials were halted during the lockdown period, and 1099 trials got postponed between January and May 2020.

LATEST TRENDS

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Growing Adoption of Digital Technologies to Transform Health Care Services

Economic and demographic changes and increased patient expectations have led to the launch of innovative digital technologies that have primarily impacted healthcare culture worldwide. With robotic process automation (RPA) and artificial intelligence (AI), the growing number of inpatient health services is now effectively delivered. This has further enabled coordination and structure of concurrent activities, therefore minimizing nurse workflow pain.

Clinical decision-making has been revolutionized owing to the rising adoption of centralized digital command centers. For example, in September 2018, Genpact announced the launch of the Cora Command Center. This cloud-based product helps improve enterprise performance through robotic process automation (RPA) and intelligent automation. Additionally, AI algorithms have changed the pattern of disease diagnosis, thus promoting smart hospitals and telemedicine.

The transformation of healthcare culture from the traditional to the digital system has created immense awareness about the disease prognosis and management. Thus, attracting more patient population towards diagnosis and treatment of a particular disease.

DRIVING FACTORS

Increasing Adoption of Cognitive Technologies to Augment Faster Drug Development Process

Globally, the increasing demand for personalized medicine has forced the pharma companies to increase automation technologies for batch processes, replacement of scale development, and manufacturing. Moreover, the replacement of large academic centers by local clinics, remote monitoring, and digital biomarkers has led to cost reduction and more data for the drug development process.

According to Deloitte, leading pharmaceutical companies have automated up to 95% of the regulatory filing required for drug launch. The companies have enhanced their supply chain management by incorporating digital tools, predictive analytics, and accurate tracking systems. Thus, the availability of advanced solutions such as robotic automation, AI, machine learning, and many more have leveraged drug development and discovery potential.

Increasing Focus on Improving Customer Relationship to Accelerate Growth

The healthcare landscape has significantly changed owing to the collaborative approach between the non-traditional key players and the existing traditional players to provide a more customer-centric experience. New partnerships on the global as well as local level have blurred the boundaries between providers. For instance, pharma companies are nowadays focused on building strong customer relationships to enhance healthcare service, while insurance companies have collaborated with pharmacies to wellness clinics.

In September 2020, Kool-ex announced a partnership with IndoSpace intending to build temperature controlled Pharma Distribution Centers. Therefore, the pharmaceutical industry embraces a digital technology platform for creating patient-centric business models to serve the evolving consumer behavior and achieve better healthcare outcomes.

RESTRAINING FACTORS

Lawsuits and Product Recalls to Hamper Market Growth

The complications of the product recall by the regulatory bodies naturally create a larger impact on any company's brand presence, affecting its sales and revenue decline. For example, in July 2020, Indian drugmakers such as Lupin, Aurobindo Pharma, and Alembic Pharmaceuticals recalled products from the U.S market as per an enforcement report from the United States Food and Drug Administration (U.S FDA).

Lupin recalled diabetes drugs, while the others recalled psychiatric medications. Lawsuit incidences and product recalls are anticipated to cost millions of fines to the pharma companies, thus diverging their focus from drug development and discovery. This is likely to decline the revenue and inhibit market growth during the forecast period.

SEGMENTATION

By Type Analysis

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Increased Sales of Drugs for Treatment of Chronic/Infectious Diseases to Favor Growth

Based on the type, the market segments include drugs and vaccines.

The drugs segment accounts for the majority of the market share in 2019. High growth is attributable to the increased sales of generic and prescription drugs for various oncology, diabetes, and anti-infective drugs. Additionally, regular launch and R&D investments in developing effective drugs have proved fruitful for segmental growth.

The vaccines segment is expected to grow at a higher CAGR during the forecast period due to higher investments in therapeutically effective vaccines for infectious diseases such as COVID-19, influenza, and rare diseases. For example, in June 2020, the world’s largest manufacturer Serum Institute announced an investment of USD 100 million to develop a potential coronavirus vaccine.

By Indication Analysis

Higher R&D Investments for Oncology to Contribute Revenue Growth

Based on indication, the market is classified as oncology, diabetes, anti-viral, cardiovascular disorders, neurology disorders, anti-infective, respiratory disorders, anti-hypertensive, and others.

The others segment dominated the market in 2019. This segment's dominance is attributable to the growing incidence rate of infectious diseases, genetic disorders, and rare disorders leading to a high demand for effective treatment products.

The oncology segment held the second position in the market in 2019. It is anticipated to be the fastest-growing segment owing to the increasing investment in R&D activities by large healthcare companies.

The diabetes segment is likely to hold a considerable share owing to the launch of parenteral drugs for type I and type II diabetes. Therefore, the increasing burden of diseases and related R&D investments contributes to higher growth during the forecast period.

By Distribution Channel Analysis

Growing OTC Products to Contribute Growth of Retail Segment

In terms of the distribution channel, the market is segmented into hospital pharmacy, retail pharmacy, and online pharmacy.

The hospital pharmacy segment holds the lion’s share in the market owing to the increasing patient visits for treatment against disease conditions. Also, the growing patient preference to buy products from nearby pharmacies, coupled with the availability of low-cost OTC products, is likely to boost the retail pharmacy segment growth.

The online pharmacy segment is expected to witness lucrative CAGR over the forecast period owing to penetration of online portals and websites such as Amazon, Walmart, etc.

REGIONAL INSIGHTS

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The market size in North America stood at USD 501.7 billion in 2019. The dominance of this region is attributable to the increased preference of key players to introduce products in developed countries of North America. Another major factor contributing to the growth of the region is the presence of major players, coupled with the launch of products. For example, in August 2020, Novartis received U.S FDA approval for Kesimpta, an injection indicated for use against multiple sclerosis. Thus, multiple launches of effective products are likely to aid the growth of the market in this region.

Europe holds the second position in the market owing to its investments in R&D for the development of effective drugs. This, along with higher sales of drugs/vaccines against chronic diseases, is expected to drive the growth during the forecast period.

Asia Pacific is anticipated to showcase the highest CAGR owing to increased awareness among the population about the care & management of disorders leading to demand for novel products.

Latin America and the Middle East & Africa are likely to witness comparatively slower growth due to lower reach and adoption of effective vaccines, coupled with the lethargic attitude towards treating disease conditions.

KEY INDUSTRY PLAYERS

Strong Product Portfolio and Growth Strategies by Key Players to Strengthen Their Market Positions

The global pharmaceuticals market is highly fragmented, with a large number of national and international players. Currently, in terms of revenue, Pfizer Inc. and F. Hoffmann-La Roche Ltd. are in close competition leading the global market with their huge product portfolio and vast distribution channel. Significant demand for top-selling products such as Herceptin, Avastin, Ocrevus, Enbrel, Inflectra, Ibrance, Xelijanz is a primary factor for the dominant position of Pfizer and F. Hoffmann-La Roche Ltd. Additionally, companies such as Novartis, J&J, Merck & Co., etc. follow the leads in the competition. The launch of novel products by medium-sized companies has helped them penetrate the market.

LIST OF KEY MARKET PLAYERS PROFILED:

• GlaxoSmithKline plc. (London, U.K)


• F. Hoffmann-La Roche Ltd. (Basel, Switzerland)


• Novartis AG (Basel, Switzerland)


• Johnson & Johnson Services Inc. (New Jersey, U.S.)


• Merck & Co., Inc. (New Jersey, U.S.)


• Pfizer (New York, U.S.)


• AstraZeneca (Cambridge, U.K.)


• Sanofi (Paris, France)


• Novo Nordisk A/S (Copenhagen, Denmark)


• Other Players

KEY INDUSTRY DEVELOPMENTS:

• October 2020 – Genuity Science and Ionis Pharmaceuticals entered into a partnership agreement to accelerate the discovery of innovative therapeutics for around 20 diseases with the help of the genomics platform.


• September 2020– The U.K. government announced a deal of USD 1.65 million with French biotech company, Valneva for COVID-19 vaccine VLA2001. The company has decided to manufacture 190 million doses of the vaccine.

REPORT COVERAGE

An Infographic Representation of Impact of Covid-19 on Pharmaceuticals Market

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The global pharmaceuticals market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading application of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.

Report Scope & Segmentation