U.S. Pharmacy Market Size, Share & Trends Analysis Report By Product Type (Prescription, OTC), By Pharmacy Type (Hospital Pharmacy, Retail Pharmacy, ePharmacy), By Ownership, And Segment Forecasts, 2023 - 2030

Report Overview

The U.S. pharmacy market was valued at USD 527.0 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 3.67% from 2023 to 2030. The growth is attributed to the rising prevalence of chronic diseases, the high utilization of prescription drugs, and the increasing elderly population in the country. According to the health policy institute, in 2021, nearly 131 million people in the U.S. (representing 66% of adults) consumed prescription drugs. Additionally, the American Society of Health-System Pharmacists (ASHP) reported that the total drug spending in the country increased by around 8% in 2021, further indicating the high demand for prescription drugs in the country.

According to a report by the Assistant Secretary for Planning and Evaluation (ASPE), there has been a change in the location where Americans receive their drugs. Between 2016 and 2021, there has been a 95% increase in the number of Americans receiving their drugs from home health care. Additionally, there has been a 45% increase in drugs received from clinics and a 35% increase from mail-order pharmacies over the same period.

On the other hand, there has been a decline in drugs received from long-term facilities (17%), federal facilities (9%), and independent pharmacies (5%). The shift towards home health care, clinics, and mail-order pharmacies can be attributed to the increasing consumer preference for over-the-counter (OTC) drugs and the growing demand for home delivery of medications, which is expected to contribute to the growth of the U.S. pharmacy market in the coming years.

Pharmacies in the U.S. offers a variety of patient-care services and implement strategies to increase medication sales. According to the 2021 National Community Pharmacy Association (NCPA) Digest, pharmacies offer their customers a wide range of services. For example, 84% of pharmacies provide flu immunizations, 80% provide non-flu immunizations, 53% offer blood pressure monitoring, and 30% offer diabetes education.

Additionally, pharmacies offer medication therapy management services to 73% of customers, compression socks and hosiery to 72%, smoking cessation aids to 61%, compounding to 52%, and ostomy supplies to 30%. These services help pharmacies to provide better patient care, which can lead to increased customer loyalty and medication sales. These services are expected to contribute to the growth of the market.

The COVID-19 pandemic has had a significant impact on the pharmacy market, with an increased demand for medications, vaccines, and other healthcare products. Pharmacies have played a critical role in the distribution of COVID-19 vaccines, and have also seen an increase in demand for telehealth services. In response to the pandemic, major pharmacy chains like Walmart, Walgreens Boots Alliance, CVS Health and Rite Aid have reported a sharp increase in demand for flu shots in their U.S. pharmacies in 2020, in some cases double from the previous year.

Moreover, According to the Centres for Disease Control and Prevention, approximately 198 million flu shots were available in 2020, compared to 175 million in the previous year. CVS, which administered 9 million shots in 2019, is anticipated to reach 18 million in 2020. Similarly, Rite Aid, which provided 2.6 million shots in 2019, ordered 3.9 million in 2020. The increase in revenue from administering vaccines and providing telehealth services has led to an expansion of pharmacy services in the U.S.

Pharmacy Type Insights

Retail pharmacy held the largest market share in 2022. The growing number of independent pharmacies and chains, along with the availability of medications in supermarkets & mass retailers in the country, is driving the retail pharmacy segment. Additionally, the presence of large chains such as CVS Health, Walgreens Boots Alliance, Inc., Walmart Stores, Inc, and Rite Aid Corp is supporting the segment's growth.

Moreover, the rapid adoption of automation technologies, such as robots, automated dispensing cabinets, and packaging systems, is driving the segment’s growth. For instance, in March 2022, Walgreens Boots Alliance reported opening its robotic micro-fulfillment centers in its 22 facilities across the United States, to fill customers’ prescriptions.

In August 2021, Innovation Associates unveiled its SmartPod, a robot that provides innovative scale within a centralized pharmacy setting. These advancements in automation technologies are expected to improve the efficiency and accuracy of pharmacy operations. ePharmacy is estimated to be the fastest-growing segment during the forecast period.

Ownership Insights

Pharmacy chains held the largest market share in 2022 and is expected to witness the fastest growth during the forecast period. The growth of this segment is expected to be driven primarily by the emergence of large hospital and corporation chains that offer convenient and cost-effective services, including specialty drugs, mail-order prescriptions, and other services.

In addition, hospital and corporation chains are also providing quality care while implementing innovative technologies such as automated medication dispensing systems, electronic health records, and digital pharmacies. These technologies are expected to further drive the growth of the segment by improving efficiency and accuracy while reducing costs.

For instance, in October 2022, Rite Aid, a full-service pharmacy corporation, reported a technology partnership with Google Cloud to transform its pharmacy operations digitally. This partnership is expected to facilitate Rite Aid's migration to Google Cloud's Anthos for key applications, including a vaccine scheduling tool, a digital engagement platform, and customer messaging infrastructure. This move is expected to accelerate the adoption of modernized pharmacy operations and drive the growth of the hospital and corporation segment.

Product Insights

The prescription segment held the largest market share in 2022 and is expected to witness the fastest growth during the forecast period. This is attributed to the increasing burden of chronic diseases and the growing aging population, driving the demand for prescription drugs. According to the CDC's National Diabetes Statistics Report for 2020, 26.8 million people are living with diabetes, indicating a significant need for prescription medications to manage and treat chronic diseases, thereby contributing to growing demand.

The growth of the prescription segment has a significant impact on the overall U.S. pharmacy industry. As the demand for prescription drugs continues to rise, it is likely to create new opportunities for pharmacies to expand their offerings and cater to the needs of patients with chronic illnesses. This growth is expected to benefit the industry in the long term by increasing revenue streams and improving healthcare outcomes for patients.

The OTC products segment is projected to witness the fastest growth during the forecast period owing to high demand for OTC medications such as painkillers, cold & flu medicines, dietary supplements, skincare, and anti-diarrheal, among others. In 2019, 260 million Americans used OTC medications and made around 3 billion purchase visits. Easy accessibility and low cost of medications are expected to aid market growth.

Key Companies & Market Share Insights

The market is highly competitive. Some of the major players are CVS Pharmacy, Walgreens, Health Mart, and Rite Aid. There are more than 29,881 pharmacies across 8 pharmacy chains in the US. Market players adopt this strategy to expand the outreach of their service in the market and increase the availability of their service in diverse geographical areas.

For instance, in December 2021, CVS Health collaborated with Microsoft on its Omni channel pharmacy capabilities and provide personalized, customized care recommendations for consumers. As part of this strategy, CVS is expected to utilize Microsoft's Azure cloud platform and data science. Some prominent players in the U.S. pharmacy market include:

• CVS Health

• Walgreens Boots Alliance, Inc.

• Walmart Stores, Inc

• Cigna Healthcare

• Rite Aid Corp

• The Kroger Company

• Albertsons Companies, Inc

• UnitedHealth Group (OptumRx)

• Cardinal Health, Inc

• Humana pharmacy solution

U.S. Pharmacy Market Report Scope

U.S. Pharmacy Market Report Segmentation

This report forecasts revenue growth at country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the U.S. pharmacy market report based on pharmacy type, product type, and ownership:

• Pharmacy Type Outlook (Revenue, USD Billion, 2018 - 2030)

  • Hospital Pharmacy

  • Retail Pharmacy

  • ePharmacy

  • Others

• Product Type Outlook (Revenue, USD Billion, 2018 - 2030)

  • Prescription

  • OTC

• Ownership Outlook (Revenue, USD Billion, 2018 - 2030)

  • Independent

  • Chain