Doctor's orders: Despite profit setbacks, healthcare reform and an aging population will encourage growth

The Pharmacies and Drug Stores industry has exhibited growth despite some negative side effects from the regulatory environment. For example, the industry has grappled with changing generic drug prices to reflect reimbursement rates. As a result of this trend, the industry has contended with PBMs not updating their payment benchmarks, thus the industry has not received an adjusted reimbursement rate for their previous prescription sales, which has cut into industry revenue. Nevertheless, the patent cliff, which caused many blockbuster drugs to lose their patent exclusivity, has bolstered industry revenue...read more.

Industry Statistics & Market Size
Revenue
$297bn
Annual Growth 12-17
3.6%
Forecast Growth 17-22
Profit
Employment
729,186
Businesses
53,494
What Our Customers Say

Industry Threats & Opportunities

  • The industry has benefited from more patients being able to afford prescriptions
  • To maintain costumers, industry operators have offered discount products and rewards programs
  • Pharmacies and drug stores will prove to be indispensable over the next five years
  • Industry Report - Industry SWOT Analysis Chapter

    The Pharmacies and Drug Stores industry is in the mature stage of its life cycle. The industry's value added (IVA), which measures the industry's contribution to the overall economy, is anticipated to grow at an annualized rate of 4.2% during the 10 years to 2022. Comparatively, GDP is expected to grow at an annualized rate of 2.0% during the period. High competition, coupled with many industry players consolidating, is indicative of an industry in the mature life cycle stage.New players are also deterred by the strong rivalry between the top two players, including Walgreens/Rite Aid (which announced their merger in 2015, though it is expected to be completed by the end of 2017) and CVS, which make up 60.7% of total industry revenue. Fur...purchase to read more.

    Additional Insights for the Pharmacies & Drug Stores Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Pharmacies & Drug Stores Industry are

  • Ability to control stock on hand
  • Participation in pharmacy benefit management (PBM) networks
  • Superior financial management and debt management
  • IBISWorld analysts also discuss how external factors such as Per capita disposable income and Number of people with private health insurance in the Pharmacies & Drug Stores industry impact industry performance..

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    What is the Pharmacies & Drug Stores Industry?

    Pharmacies and drug stores retail a range of prescription and over-the-counter medications, health and beauty items, toiletries and consumable goods directly to consumers on a walk-in basis. Industry companies may also provide basic health and photo processing services. The industry includes retail stores with a pharmacy but excludes mail-order retailers, hospitals and clinics.

    Industry Products
  • Branded prescription drugs
  • Generic drugs
  • Nonprescription medicines
  • Personal health supplies
  • Groceries and food items
  • Vitamins, minerals and dietary supplements
  • Cosmetics
  • Industry Activities
  • Preparing and selling prescription and nonprescription drugs and medicines
  • Retailing basic consumable goods
  • Selling other miscellaneous items, such as candy, cosmetics, magazines and light refreshments
  • Advising customers on the use of both prescription and over-the-counter drugs
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Per capita disposable income
  • Number of people with private health insurance
  • External competition for the Pharmacies and Drug Stores industry
  • Number of adults aged 65 and older
  • Number of physician visits
  • Federal funding for Medicare and Medicaid

  • Current Performance
  • Maintaining consumers
  • PBMs expand their role in the sector
  • Chart: Revenue Growth

  • Industry Outlook
  • Patent cliff
  • Competition and consolidation
  • Table: Pharmacies & Drug Stores Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Pharmacies & Drug Stores Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Brand Name Pharmaceutical Manufacturing
  • Camera & Film Wholesaling
  • Chocolate Production
  • Cosmetic & Beauty Products Manufacturing
  • Drug, Cosmetic & Toiletry Wholesaling
  • Generic Pharmaceutical Manufacturing

  • Products & Services
  • Branded prescription drugs
  • Generic drugs
  • Other
  • Nonprescription medicines
  • Personal health supplies
  • Groceries and food items
  • Cosmetics
  • Vitamins, minerals and dietary supplements
  • Chart: Pharmacies & Drug Stores Industry Products and Services Segmentation

  • Demand Determinants
  • The economy shapes spending
  • Age, behavior and health
  • Prices are on the rise
  • Government regulation
  • Higher pharmaceutical usage stimulates demand

  • Major Markets
  • Consumers aged 45 to 64 years
  • Consumers aged 18 to 44 years
  • Consumers aged 65 years and older
  • Consumers aged 17 and younger
  • Chart: Major Market Segmentation for the Pharmacies & Drug Stores Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Purchases
  • Wages
  • Other
  • Chart: Cost Structure Benchmarking – Sector vs Pharmacies & Drug Stores

  • Basis of Competition
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Pharmacies & Drug Stores Industry

  • Industry Globalization
    The Walgreen CompanyCVS Health CorporationRite Aid Corporation
  • Table: The Walgreen Company - financial performance
  • Table: CVS Health Corporation - financial performance
  • Table: Rite Aid Corporation - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Pharmacies & Drug Stores Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Pharmacies & Drug Stores Industry
    Includes:
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Wages (2008-2022)
  • Total health expenditure (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
    Blockbuster Drug
  • A drug product that generates annual sales in excess of $1 billion.
  • Formulary
  • A list of medicines that are covered by a health insurance plan and always meet Medicare's requirements.
  • Front-End Sales
  • Sales of products from the front of the store or products sold separately from the pharmacy.
  • Over-The-Counter (Otc) Medications
  • Medicine that can be purchased without a prescription.
  • Pharmacy Benefit Manager (Pbm)
  • A third-party administrator of prescription drug programs.
  • Prescription Drug
  • A licensed medicine that can only be obtained with a doctor's approval.
  • Why buy this report?

    IBISWorld’s industry research report on Pharmacies & Drug Stores contains five-year forecasts and data analysis that can help you identify and mitigate risks in potential new markets. Position yourself as an expert with internal stakeholders by using our comprehensive industry research to inform your reports, proposals and presentations. Our business information will save you money by helping you make better decisions, faster.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Pharmacies & Drug Stores:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Pharmacies & Drug Stores market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Pharmacies & Drug Stores, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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