Ethical pharmaceuticals, also known as prescription drugs, are medicinal products that are intended for use only under professional supervision. These products contain ingredients that have the potential for harmful effects, and as such require careful medical management. Ethical pharmaceuticals play a crucial role in disease treatment and management by offering medical advantages like targeted disease treatment, convenient administration, and improved patient compliance. The growing prevalence of chronic diseases and increasing healthcare investments are major factors driving the demand for ethical pharmaceuticals globally.
The Global Ethical Pharmaceuticals Market is estimated to be valued at US$ 4.76 billion in 2024 and is expected to exhibit a CAGR of 10% over the forecast period from 2024 to 2031.
Key Takeaways
Key players: The Global Ethical Pharmaceuticals Market is fragmented with the presence of several global and regional players. Key players operating in the ethical pharmaceuticals market are Amgen Inc, AbbVie Inc, Johnson & Johnson, Eli Lilly and Company, Merck & Co., Inc, GlaxoSmithKline plc, Sanofi, Novartis AG, Abbott Laboratories, Otsuka Holdings, F. Hoffmann-La Roche Ltd, Teva Pharmaceutical Industries Ltd., Pfizer Inc, Takeda Pharmaceutical Company. The major global players are focusing on developing novel drugs through aggressive R&D initiatives to gain a competitive edge. For instance, in 2022, Amgen Inc received FDA approval for its LUMAKRAS drug to treat lung cancer. Such new product launches are helping key players expand their portfolio and strengthen market presence.
Growing demand: Rising awareness about diseases and available treatment options has been fueling the demand for ethical pharmaceuticals. Increased healthcare expenditures in developing nations are also contributing to market growth. Further, the growing geriatric population prone to chronic diseases acts as a high-impact rendering driver.
Global expansion: Leading companies are focusing on expanding their global footprint through strategies like acquisitions, collaborations, and geographic expansions. For example, in 2021, Novartis AG acquired US-based therapeutic company The Medicines Company for USD 9.7 billion to enhance its cardiovascular portfolio.
Market key trends
Increased focus on patient-centric healthcare: Pharmaceutical firms are shifting their strategy from volume-based to value-based healthcare with more focus on patient needs. This involves developing drugs with better safety profiles, convenient dosage forms and customized treatment options. For instance, Amgen launched migraine drug AIMOVA in 2022 which offers ease of self-administration.
Growth in specialty drugs: There is high demand for specialty drugs used to treat complex conditions like cancer and autoimmune diseases. Biosimilars and targeted therapies have shown promising results with fewer side effects. Areas like oncology and immunology will drive most revenues in specialty drug segments going forward.
Porter’s Analysis
Threat of new entrants: Ethical pharmaceutical industry requires huge capital investments for R&D and clinical trials. Regulations also pose barriers.
Bargaining power of buyers: Large buyers like governments and hospitals can negotiate prices but individual consumers have less influence.
Bargaining power of suppliers: Key raw material suppliers possess some bargaining power. However, industry players try to vertically integrate or find alternative suppliers to reduce dependence.
Threat of new substitutes: New drug delivery technologies or alternative treatment options can disrupt existing products but require extensive testing before commercial use.
Competitive rivalry: The global pharmaceutical market is highly competitive with major players continuously investing in R&D to develop innovative drugs and diversify their product portfolios.
Geographical Regions
North America accounts for the largest share of the global ethical pharmaceuticals market currently, due to high healthcare expenditure and presence of leading industry players in the US and Canada.
Asia Pacific is poised to be the fastest growing regional market during the forecast period, driven by rising income levels, growing medical tourism industry and increasing healthcare investments in major economies like China and India.
