Compounding pharmacies offer customized medications to treat specific medical conditions that may not be commercially viable for large-scale manufacturing by pharmaceutical companies. These customized medications are prepared by licensed pharmacists to fit the unique needs of individual patients based on their medical diagnosis. This includes preparations such as changing drug dosage, drug delivery method, or adjustments for allergies or intolerances. The growing prevalence of chronic and lifestyle diseases along with increasing geriatric population base is fueling demand for customized medications which is driving the growth of compounding pharmacies in the U.S.
The U.S. compounding pharmacies Market is estimated to be valued at US$ 5072.19 Mn in 2023 and is expected to exhibit a CAGR of 5.9% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
The ability of compounding pharmacies to meet growing and unmet medical needs by customizing medications presents a major market opportunity. Compounding pharmacies play an important role in fulfilling the specific medication requirements that cannot be met by the commercial drug market. This is especially vital for pediatric and geriatric patient population with complex medical conditions. With the increasing prevalence of rare and orphan diseases coupled with rising public focus on personalized healthcare approach, the demand for customized medications is expected to surge significantly over the coming years. This growing medical need presents a lucrative growth opportunity for compounding pharmacies to expand their service offerings and customer base. Effectively capitalizing on this opportunity can help compounding pharmacies witness sizable growth and market share gains in the coming future.
Porter's Analysis
Threat of new entrants: The threat of new entrants is moderate. While market demand is growing, developing expertise in customized compounding and establishing supplier and customer relationships takes time and investment which deters new players.
Bargaining power of buyers: The bargaining power of buyers is high as compounding pharmacies cater to individual consumer needs. If a pharmacy is unable to meet specific requirements, customers can switch easily to other providers.
Bargaining power of suppliers: The bargaining power of suppliers is moderate. While key active pharmaceutical ingredients and solutions are supplied by a few large companies, compounding pharmacies can substitute suppliers based on availability and costs.
Threat of new substitutes: The threat of new substitutes is low. Compounded drugs fill a niche for personalized medications that aren't substitutable by manufactured drugs alone.
Competitive rivalry: Competition is fierce as compounding pharmacies strive to offer specialized services at affordable prices to gain market share.
SWOT Analysis
Strengths: Delivery of customized medications, ability to compound medicines not produced commercially, high level of expertise.
Weaknesses: High costs of compounding certain drugs, dependency on availability of raw materials, limited scale of operations vs retail chains.
Opportunities: Growth in demand for specialized drugs, therapeutic use of compound drugs, expansion into retail/mail order markets.
Threats: Stringent regulations on quality standards, proximity to hospitals and clinics, pricing pressure from new players.
Key Takeaways
The U.S. compounding pharmacies market size is expected to witness steady growth over the forecast period driven by increasing demand for personalized medications. The market size is estimated to reach $5.07 billion by 2024 registering a CAGR of 5.9% during 2023-2030.
Regional analysis: The Western region currently dominates the U.S market accounting for over 35% share due to higher concentration of sophisticated medical facilities and specialty healthcare providers in states like California and Washington. States like Texas and Florida in the Southern region are emerging lucrative markets and will exhibit fastest growth during the forecast period.
Key players: Key players operating in the U.S compounding pharmacies market are PharMEDium, Institutional Pharmacy Solutions, Cantrell Drug Company, Triangle Compounding Pharmacies. They provide specialized services to fill niche medication requirements and therapeutic compounding needs not met by traditional pharmacy chains.
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