US Pharmaceutical Market Size, Share, Trends Forecast to 2030

The US pharmaceutical market size is expected to grow from US$ 846.72 billion in 2022 to US$ 1,285.79 billion by 2030; the US pharmaceutical market forecast is estimated to record a CAGR 5.36% during 2022–2030.

Analyst’s Viewpoint

Rising workplace-associated disorders, rise in pharmaceutical production capacity, increased approvals of generic drugs, and escalating R&D investments in the pharmaceutical sector drive the US pharmaceutical market growth. However, the high cost of drug development and marketing approval hinders the market growth. The US pharmaceutical market forecast, by product, is segmented into vaccines, biologicals & biosimilars, and small molecules. The small molecules segment is further bifurcated into generic and branded. The small molecules segment held the largest market share in 2022. The biologicals & biosimilars segment is expected to register the highest CAGR during the forecast period.

Pharmaceutical is a broad segment that consolidates a group of chemicals classified based on their pharmacological effect and therapeutic use. For instance, alkaloids were the first pure pharmaceuticals derived from plants; they include quinine, nicotine, cocaine, atropine, and morphine. Similarly, some drugs are made of animal origin, which includes glandular extracts containing hormones. These pharmaceutical products diagnose, treat, and prevent chronic diseases such as cancer, diabetes, and genetic disorders.

Market Insights

Increased Approval of Generic Drugs

The demand for generic drugs, which serve as an alternative to branded drugs, has increased tremendously owing to their low costs. Many branded drug patents are nearing expiry, which is a major reason for the surged production of generics. In February 2023, Zydus Lifesciences received tentative approval from the US Food & Drug Administration (USFDA) for two generic drugs: bosentan tablets (32 mg) and canagliflozin tablets (100 mg and 300 mg). Bosentan tablet is indicated for the treatment of pulmonary arterial hypertension (PAH) in pediatric patients with age 3 years or above. The canagliflozin tablet is indicated to improve glycemic control in patients with type 2 diabetes mellitus. In July 2022, Glenmark PHARMACEUTICALs Inc. received approval from the USFDA for norethindrone acetate and ethinyl estradiol capsules, and ferrous fumarate capsules (1 mg/20 mcg). The approved drug is the generic version of Taytulla capsules offered by Allergan PHARMACEUTICALs International, which is a prescription birth control pill. In November 2022, the USFDA granted tentative approval for Lupin’s Abbreviated New Drug Application (ANDA) for drospirenone tablets, 4 mg, which is a generic version of Slynd Tablets, 4 mg, of Exeltis USA Inc.

Thus, the growing number of approvals of generic drugs drives the US pharmaceutical market share and demand for generic segment.

Escalating R&D Investments in Pharmaceutical Industry

Majority of investments in the US pharmaceutical market, companies primarily target drug discovery and development. According to the Pharmaceutical Research and Manufacturers Association (PhRMA), pharmaceutical companies in the US perform more than half of the world's R&D, with investments totaling ~US$ 75 billion, and they hold intellectual property rights on most of the new pharmaceuticals. In 2021, Pfizer Inc. invested US$ 13,829 million in research and development, recording an increase of US$ 4.4 billion from 2020 (US$ 9,393 million). Similarly, Johnson & Johnson invested US$ 14.7 billion in research and development in 2021, with an annual rise of 21% in its all-time-high investment recorded in 2020. These investments reflect the commitment of companies to creating life-enhancing innovations.

The research-based pharmaceutical industry is an important asset of the European economy; it is one of the top-performing high-technology segments in the region. As per the European Federation of Pharmaceutical Industries and Associations (EFPIA), the research-based pharmaceutical industry in Europe invested ~US$ 44,266.18 million (€ 41,500 million) in R&D in 2021. Similarly, governments of countries in Asia Pacific are focusing on pharmaceutical R&D activities. For instance, the Government of Thailand launched the “Thailand 4.0” initiative to facilitate the country’s shift from a “manufacturing hub” to an “innovation hub.” Additionally, as per the India Brand Equity Foundation, the foreign direct investment (FDI) inflows in the Indian drugs and pharmaceuticals sector reached US$ 1,414 million between 2021 and 2022.

Such high investments in R&D activities are driving the growth of the US pharmaceutical market share at present and also in future years.

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US Pharmaceutical Market: Strategic Insights

US Pharmaceutical Market

• Market Size 2022
  US$ 846.72 Billion
• Market Size 2030
  US$ 1,285.79 Billion

Market Dynamics

GROWTH DRIVERS

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FUTURE TRENDS

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OPPORTUNITIES

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Regional Overview

• United State

Market Segmentation

Product

• Vaccines
• Biologics & Biosimilars
• Small Molecules

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Future Trend

Increasing Adoption of AI-Based Tools for Drug Discovery

Artificial intelligence (AI) is emerging as an important tool in the healthcare sector, as it helps understand the action mechanism of drugs. The use of AI tools has already been proven to accelerate the process of discovering new candidate therapeutics; the process that earlier used to take years to complete can now be accomplished within months using AI. In addition to reducing the timelines of drug discovery, AI helps enhance the agility of the research process, increase the accuracy of predictions on drug safety and efficacy, and boost the speed and precision of discovery and preclinical testing, thereby providing a competitive edge to R&D strategies.

Many pharmaceutical companies are collaborating with AI companies to harness the benefits of AI in drug discovery. For instance, in 2019, Pfizer partnered with Concreto HealthAI to advance its work in precision oncology using AI and real-world data. The company believes that AI tools have tremendous potential in developing and using drugs to improve patient outcomes. Further, in 2022, Pfizer extended its partnership with CytoReason to leverage its AI technology for improving drug candidate discovery and drug development processes. Similarly, in 2019, Janssen collaborated with a French startup Iktos Pharmaceuticals to develop an AI-powered drug design system. Janssen's new drug design system will enhance the process of discovering new medications by accelerating the identification of molecules. Additionally, in January 2020, Bayer partnered with a UK-based AI-driven drug discovery company, where Bayer will use the AI drug discovery platform to identify and optimize novel structures as potential drug candidates to treat cardiovascular and oncological diseases. Similarly, GlaxoSmithKline (GSK) collaborated with Insilico Medicine, a Baltimore-based AI-driven company, to explore the AI capability of Insilico for easing the process of identification of novel biological targets.

Thus, the growing adoption of AI-based tools for drug discovery is likely to trigger the demand of the US pharmaceutical market analysis during the forecast period.

Market Opportunity

Rising Incidences of Chronic Diseases and Infectious Diseases

The Centers for Disease Control and Prevention (CDC) states that 6 in 10 adults in the US suffer from at least one chronic disease, such as cancer, heart disease, lung disease, stroke, neurological disease, diabetes, and kidney disease. Moreover, 4 in 10 adults in the country suffer from 2 or more chronic diseases. According to the CDC, ~1,752,735 new cancer cases were reported in the US in 2019. The most prevalent cancer types are breast cancer, lung and bronchus cancer, prostate cancer, colon and rectum cancer, melanoma cancer, and liver cancer. Further, according to data published by the American Diabetes Association, ~37.3 million people, representing 11.4% of Americans, were possibly diabetic in 2019. Among these, ~28.7 million people were diagnosed with diabetes, while ~8.5 million did not undergo a proper diagnostic procedure. Further, per the National Ambulatory Medical Care Survey: 2019, there were 10.2 million visits to physicians for the treatment of infectious and parasitic diseases.

According to the World Health Organization, chronic diseases represent 77% of the total disease burden and 86% of all deaths in Europe. Thus, 70–80% of the total healthcare costs are spent on the management of chronic diseases. The surging prevalence of infectious diseases, especially in Southeast Asia, is also likely to propel the demand for pharmaceuticals in the coming years, eventually driving the growth of the pharmaceutical market. For instance, as per the Revised National Tuberculosis Control Programme Report, ~4.4 lakh patients died due to tuberculosis in India in 2018, i.e., 29% of the total 1.5 million deaths caused by the disease across the world. Thus, the rising incidence of chronic diseases and infectious diseases bolsters the demand for drugs, which would continue to drive the US pharmaceutical market growth in the future.

Product-Based Insights

The US pharmaceutical market analysis, by product, is segmented into vaccines, biologicals & biosimilars, and small molecules. The small molecules segment is further bifurcated into generic and branded. The small molecules segment held the largest market share in 2022. The biologicals & biosimilars segment is expected to register the highest CAGR during the forecast period. In the US pharmaceutical market growth, biosimilars treat patients with cancers, kidney diseases, diabetes, and other autoimmune diseases such as rheumatoid arthritis and Crohn's disease. Biologics are the most expensive medicines in the US pharmaceutical market outlook, costing tens of thousands of dollars yearly per patient. Biosimilars are expected to be priced 15–30% lower than their reference product. In 2020 alone, biosimilars saved US$ 7.9 billion, with savings expected to grow significantly in the next few years as more biosimilars enter the market. According to Cardinal Health, it is expected that biosimilars are expected to reduce the US drug expenditure by US$ 133 billion by 2025. The recognition of biosimilars as efficacious and safe agents by patients, specialists, primary care clinicians, and other healthcare professionals is propelling the demand for biosimilars. In addition, biosimilars help improve the quality of life among millions of patients while saving billions of dollars for healthcare systems per year. They have come up as potent and cost-effective options for treating many diseases—including chronic skin conditions such as psoriasis; bowel diseases such as Crohn’s disease, irritable bowel syndrome, and colitis; diabetes; autoimmune disease; cancer; kidney conditions; and arthritis. During 2017–2018, the National Health Service (NHS) saved US$ 401.10 million by switching from 10 expensive medicines to better-value and equally effective alternatives such as biologics, with an expectation of even more savings in the future. The potential savings from using biosimilars can also be used to fund other new treatments. With the high prevalence of chronic diseases, the demand for biosimilars in treating life-threatening illnesses has surged rapidly over the last five years. Such a factor has assisted the growth of the US pharmaceutical market trends in the recent past and is expected to follow a similar trend during the forecast  period.

US Pharmaceutical Market Trends, by Product – 2022 and 2030

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Country Analysis

In recent years, pharmaceutical sales revenues in the US pharmaceutical market outlook have accounted for nearly half of the global total. Five of the 10 top US pharmaceutical market companies worldwide were from the US in 2021. Pfizer is one of the companies that provides prescription drug revenues worldwide, heavily boosted by its COVID-19 vaccine Comirnaty. AbbVie is another US pharmaceutical market participant that has made a great impression worldwide, with the pharmaceutical segment generating a record US$ 55 billion in 2021, driven especially by its longstanding top-seller brand Humira. Despite the influence of several emerging countries, the US has captured a dominant share of the pharmaceutical market globally. The US pharmaceutical market is home to a few major pharma companies worldwide. Most advanced US pharmaceutical market products are easily accessible to American consumers, albeit at a cost. 

The US pharmaceutical market accounts for about 45% of the global pharmaceutical market and 22% of global production. The US pharmaceuticals output and sales remained robust in 2022, driven by the global vaccination rollout and suppressed demand for essential and non-essential medical treatments. The US pharmaceutical market has made great strides over the past few decades due to a greater focus on research and development (R&D). Pharma companies spend over 21% of their revenues on R&D, and this sizeable investment is wasted if a medication does not receive regulatory approval. The R&D expenditure of the US pharmaceutical market totaled some US$ 102 billion in 2021. This figure will likely increase significantly in the coming years due to the costs of developing effective and safe COVID-19 treatments and vaccines.

Johnson & Johnson, Merck & Co Inc, Abbott Laboratories, Amgen Inc, Eli Lilly and Company, Bristol-Myers Squibb Company, Bayer AG, Takeda Pharmaceuticals, Zoetis Inc, Moderna Inc, AbbVie Inc,  Pfizer Inc, Gilead Sciences Inc, and Regeneron Pharmaceuticals Inc are a few of the key companies operating in the US pharmaceutical market report. Leading players in the US pharmaceutical market report focus on expanding and diversifying their market presence and clientele, tapping prevailing business opportunities. In August 2023, Bristol Myers Squibb acquired Mirati Therapeutics Inc. The goal of Mirati, a commercial-stage targeted oncology firm, is to find, create, and provide ground-breaking treatments that will improve the quality of life for cancer patients and their families. The assets of Mirati provide a compelling opportunity to expand Bristol Myers Squibb's oncology trademark, as they complement the company's portfolio and creative pipeline. By virtue of this acquisition, Bristol Myers Squibb will expand its commercial portfolio by incorporating KRAZATI, a significant lung cancer medication. The business obtains access to a number of intriguing clinical assets that enhance its pipeline for oncology treatments and make excellent prospects for both combination and single-agent development.

US Pharmaceutical Market Report Scope