The USA dominates the global pharma market both in consumption and in development, securing the spot as the largest pharma market in the world. Increasing growth in this sector is fueled in part from the increasing aging population and the rising improvements in purchasing power and access to quality healthcare for poor and middle-class families. In the next decade, the US is expected to maintain its leading position in the global pharma market with a market share of over 45%, and by 2030, it is expected that the market will be worth over US$700 billion. In the global OTC market, most revenue is generated in the US, and the American OTC pharma market is expected to experience excellent growth at 6.3% CAGR. On this growth trajectory, by 2030, the US OTC pharma market will be worth over US$40 billion.
The US is also the world leader in research and development, which directly contributes to the growing pharma industry and attracts investment from countries around the world. Strong intellectual property laws in the US feed into the continuing cycle of innovation by rewarding companies willing to invest in the development of novel pharma products. According to the International Trade Administration. “The United States attracts the majority of global venture capital investments in start-up pharma enterprises”. While barriers to commercialization for local US pharma companies are low, the barriers to entry for foreign pharma companies are quite high. One notoriously difficult barrier to entry for foreign pharma companies seeking to enter the US market is achieving FDA approval. Before any company can make and market any medical product in the US, it must be granted special authorization by the FDA. This is a difficult and lengthy process, and the easiest way to navigate the difficult process is through expert guidance.
In terms of healthcare spending, the US spends more on healthcare than any other OECD country at 16.9% of GDP. The share of the economy spent on healthcare in the US has steadily been increasing due to advances in medical technologies, rising prices in the health sector, and increased demand for services. On a similar note, per capita, healthcare spending is also the highest of all the OECD countries, at over US$10,000 per capita and a large proportion is through out-of-pocket and voluntary private spending.
In the USA, chain pharmacies and independent pharmacies are the most common places to get medications. These pharmacy chains have several thousand retail locations across the country, and due to the increasing pressure from these large chain stores, the number of independent pharmacies in the USA has been steadily declining. To achieve success in the USA market, OTC, Rx, FS, MD, and Cosmetic company leaders should be open-minded when it comes to sales channels and step away from the traditional pharmacy approach still existing in many European countries.
Due to a positive environment for business and increasing healthcare spending and needs, opportunities in the US pharma market are endless. However, as one of the most developed pharma market in the world, an entry can sometimes be difficult for foreign players. To ensure successful market entry, make sure you have all the facts and clear guidance from experts.