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The compounding pharmacy market size is estimated to grow by USD 1.68 billion at a Compound annual growth rate (CAGR) of 2.18% between 2022 and 2027. The global compounding pharmacy market is driven by the rising popularity of Hormone Replacement Therapy (HRT), which fuels the demand for compounded medications. Additionally, the increasing prevalence of hormonal imbalance problems further propels market growth. Government regulations and initiatives also play a pivotal role in shaping the market landscape by ensuring safety standards and fostering innovation in compounding pharmacy practices.
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This market report extensively covers market segmentation by product (topical medications, oral medications, parenteral medications, and other medications), therapeutic area (pain management, hormone replacement, dermal disorders, and other therapeutic areas), and geography (North America, Europe, Asia, and Rest of World (ROW)).
The topical medications segment is estimated to witness significant growth during the forecast period. A wide range of dosages, including creams, emulsions, ointments, pastes, and gels, are beneficial for skin diseases. The ability of semi-solid topical drugs to adhere to the application surface for a reasonable period enables them to achieve extended release to a targeted area in a controlled and sustained manner. For its dosage, the goal is to be absorbed into the desired skin layers in sufficient amounts for therapeutic effects. For most skin diseases, the target site lies in the viable epidermis or upper dermis. The application of semi-solid topical drugs is effective as they reach the target site beneath the skin.
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The topical medications segment was the largest segment and was valued at USD 5.64 billion in 2017. In addition to the skin, semi-solid drugs can also be applied to the surface of other membranes, such as the cornea, the nasal mucosa, the rectal tissue, and the external lining of the ear. Due to the large number of benefits of semi-solid topical drugs, their adoption is expected to increase, which will drive the growth of the topical medications segment during the forecast period.
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Asia is estimated to contribute 37% to the growth of the global market during the forecast period. Another region offering significant growth opportunities to vendors is North America. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Due to the increasingly high prevalence and incidence of chronic diseases in North America, there is a significant presence of global and local pharmaceutical companies, which has increased the availability of drug molecules for various therapeutic applications. These companies are focusing on drug development and manufacturing, which is increasing the demand for compounding pharmacy solutions to minimize the counterfeiting of drugs in North America.
In addition, pharmaceutical companies are outsourcing the development and manufacturing of pharmaceutical drugs, yet another driver for the demand for compounding pharmacy solutions, thereby boosting the growth of the market in North America. The Drug Supply Chain Security Act (DSCSA) relates to the serialization of manufacturing drug products in the US and aims at tracking and tracing certain compounding drugs, which, in turn, has increased the demand for compounding pharmaceuticals, thus spurring the growth of the market in North America.
Compounding pharmacies play a pivotal role in addressing diverse healthcare needs, especially for rare/orphan diseases and gastrointestinal (GI) disorders. They provide both sterile-compounded medications and non-sterile compounding, ensuring patients receive tailored treatments. These pharmacies contribute to drug discovery and development by participating in clinical trials across Phase I, Phase II, and Phase III, collaborating with organizations like the Biotechnology Innovation Organization. However, safety concerns, exemplified by incidents such as the fungal meningitis outbreak, have raised consumer perception issues.
Despite this, compounding pharmacies remain crucial for medication adherence, catering to individual patient needs, and offering personalized solutions in therapeutic areas like hormone replacement therapy, pain management, dermatology, and nutritional supplements. They fill gaps left by discontinued medications and address shortages, providing specialized medications, including personalized beauty and anti-aging products, for various age cohorts, from pediatric to geriatric populations.
Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The surging demand for compounded medications, driven by the increasing popularity of Hormone Replacement Therapy (HRT), stands as a primary driver propelling market expansion. Compounded hormonal replacement therapy (HRT) medications are witnessing escalated demand, fueled by the rising preference for HRTs due to the accessibility of active pharmaceutical ingredients (APIs) in diverse dosages. Heightened awareness of critical health concerns like mood swings, hot flashes, acute depression, osteoporosis, breast and bone health, and erectile longevity has catalyzed the need for personalized HRTs.
This surge is particularly notable in the demand for hormones such as progesterone post-hysterectomy, testosterone replacement, and fertility-related hormones, owing to specific dosage requirements for tailored solutions. The mounting prevalence of lifestyle-related disorders among the younger demographic further amplifies this trend. Active pharmaceutical ingredients such as progesterone, estradiol, estrogen, and testosterone are currently witnessing heightened demand in the HRT market. Consequently, the availability of diverse drugs has surged, augmenting the demand for HRT medications utilized across various therapeutic interventions, thus driving market growth significantly during the forecast period.
The rising popularity of personalized medicines is a key trend in the market growth. Compounding pharmacies, involved in the development of personalized medicines, are growing in popularity as they can help in the early detection of diseases and the selection of accurate treatment methods, thus reducing the mortality rate. Microarray technology enables researchers to analyze critical biological complications, such as genomic variations and the nature of inherited syndromes that are responsible for several diseases, such as cardiovascular diseases and cancer. Therefore, the identification and assessment of the genetic composition of an individual play a vital role in determining his/her health and susceptibility to certain chronic diseases.
Besides, the growing awareness of genetic diseases is powering the advancement and development of compounding pharmacies that emphasize targeted drug development. The increase in the awareness of microarray technology can be attributed to the ability of modern microarray technologies that perform genetic profiling of individuals. By applying tissue microarray technologies in personalized medicine, it is easy to understand the risks in terms of clinical outcomes and individual responses to specific drugs. Therefore, the market is expected to witness significant adoption of microarray technologies, coupled with a gradual hike in the sales of personalized medicines, during the forecast period.
The unsafe usage of compounded drugs is challenging market growth. The main thing preventing people from using compounded pharmaceuticals is improper compounding techniques, which include contamination during compounding and disregard for GMP guidelines. This is particularly noticeable in sterile compounding for intravenous solutions and medications for injection.
Furthermore, the sales potential of compounded pharmaceuticals from complex drug pharmacies is anticipated to be negatively impacted by the rise in the number of prohibited drugs. In this regard, the US FDA announced that in June 2015, it had added four medications to its list of those that are "not allowed to be compounded" in large quantities by outside healthcare institutions. These include acetaminophen, aprotinin (Trasylol), ondansetron hydrochloride (Zofran), and bromocriptine mesylate (Tylenol). The demand for common compounded medications such as Tylenol may decrease if an order forbidding the compounding of these medicines is issued. The usage of compounded drugs is unsafe and is expected to hinder market growth during the forecast period.
The market growth analysis report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market research and growth report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Fresenius SE and Co. KGaA - The company offers compounding pharmacy products through its subsidiary Fresenius Kabi.
The market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 20 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market caters to diverse patient needs, offering customized medications for conditions such as allergies, intolerances, and rare diseases. It addresses medication shortages and provides specialty drugs for dermatology, gastrointestinal issues, and nutritional supplements. Compounding pharmacies play a crucial role in personalized healthcare, serving patients across age cohorts, including adults, pediatrics, and geriatrics. They ensure sterility in compounded medications and offer both sterile and non-sterile options. With Pharmaceutical Dosage Alteration (PDA) and Pharmaceutical Ingredient Alteration (PIA) capabilities, they address drug shortages and provide innovative solutions. Despite safety concerns highlighted by incidents like the fungal meningitis outbreak linked to the New England Compounding Center, compounding pharmacies contribute significantly to precision medicine initiatives, drug discovery, and clinical trials. As the geriatric population grows and healthcare expenditure rises, compounding pharmacies emerge as essential contributors to patient care and public health initiatives.
Compounding pharmacies are crucial for medication adherence, addressing individual patient needs, especially for rare or orphan diseases where commercially available options are limited. They play a vital role in providing alternatives for discontinued medications and offering personalized solutions for gastrointestinal issues and dermatological concerns, including personalized beauty and anti-aging products. These pharmacies produce both sterile and non-sterile compounded medications, filling gaps left by currently unavailable pharmaceutical manufacturing (CUPM) processes.
As contributors to drug discovery and development, they collaborate with organizations like the Biotechnology Innovation Organization, participating in clinical trials across Phase I, Phase II, and Phase III. Despite safety concerns highlighted by incidents like the New England Compounding Center, they remain a revenue contributor, particularly in addressing the medication needs of geriatric populations and patients with neurological disorders, cancer, and diabetes, aligning with the increasing healthcare demands of aging populations.
The market forecasting report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Compounding Pharmacy Market Scope |
|
Report Coverage |
Details |
Page number |
163 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 2.18% |
Market growth 2023-2027 |
USD 1.68 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
1.9 |
Regional analysis |
North America, Europe, Asia, and Rest of World (ROW) |
Performing market contribution |
Asia at 37% |
Key countries |
US, Canada, France, China, and Japan |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
ACPHARM QUEENSLAND Pty Ltd., Advance Pharmacy, Athenex Inc., B.Braun SE, Doughertys Pharmacy, Fagron NV, Fresenius SE and Co. KGaA, Institutional Pharmacy Solutions, ITC Compounding Pharmacy, Lee Silsby Compounding Pharmacy, McGuff Co. Inc., Nephron Pharmaceuticals Corp., Olympia Pharmacy, PenCol Specialty Pharmacy, QuVa Pharma Inc., Rx3 Compounding Pharmacy, Triangle Compounding Pharmacy, Valor Compounding Pharmacy, Village Compounding Pharmacy, and Wedgewood Village Pharmacy LLC |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period. |
Customization purview |
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