COMPOUNDING PHARMACIES MARKET ANALYSIS

Market Size and Trends

Global compounding pharmacies market is estimated to be valued at USD 11.18 Bn in 2024 and is expected to reach USD 16.92 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 6.1% from 2024 to 2031.

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Global compounding pharmacies market growth is driven by rising demand for compounded medicines due to growing geriatric population. Compounded medications provide customized treatment for various conditions that may not be addressed through traditional commercially available drugs. Rising chronic diseases and health issues is expected to boost demand for personalized medicines, and this provides numerous opportunities for the market players.

Increasing Demand for Hormone Replacement Therapy

Increasing demand for hormone replacement therapy (HRT) is expected to drive the global compounding pharmacies market growth over the forecast period. For instance, in September 2021, according to the data published by National Library of Medicine, in the U.S., about 4 out of 10 women aged 70-79 years had undergone hysterectomy in 2018.

Market Concentration and Competitive Landscape

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Increasing adoption of inorganic growth strategies such as acquisition is expected to drive the market growth over the forecast period. For instance, on April 10, 2024, Myonex, a global clinical trial company, announced that it had acquired Saveway Compounding Pharmacy, a U.S.-based compounding pharmacy. The acquisition helps Myonex to better supply patients in clinical trials with medication and equipment as needed. It will also help the company expand its clinical trial designs and include direct-to-patient and home healthcare provider capabilities.

Key Takeaways of Analyst

Global compounding pharmacies market is expected to witness growth significantly over the forecast period, owing to increasing patient preference for compounded drugs over conventional drugs. Limited insurance coverage and reimbursement scenario for compounded drugs can hamper the market growth. However, rising demand for personalized medications, and shortage of conventional drugs can offer growth opportunities for market players. The market is expected to witness growth due to expanding geriatric population and rising adoption of animal therapies involving compounding.

North America is expected to dominate the market in 2024 due to e large number of compounding pharmacies in the region, and is expected to continue its dominance. However, Asia Pacific region is expected to experience the fastest CAGR during the forecast years due to rising healthcare spending and increasing prevalence of chronic diseases. Strict regulations across some countries can hamper the market growth.

Strict regulations across some countries could pose a challenge to the market growth. The market also faces challenges due to the limited insurance coverage and reimbursement scenario for compounded drugs. However, rising demand for personalized medications, and shortage of conventional drugs will provide huge growth opportunities for players in the market. The market is also expected to receive a boost due to expanding geriatric population and rising adoption of animal therapies involving compounding. Technological advancements including advanced compounding equipment can also drive the market growth during the forecast period.

Market Challenge – Limited Insurance Coverage and Reimbursement for Compounded Drugs

Limited insurance coverage and reimbursement for compounded drugs can hamper the global compounding pharmacies market growth. Compounded drugs are not approved by the U.S. FDA, thus, these face restrictions in terms of insurance coverage and reimbursement policies. Many private and public insurance plans does not offer coverage or offer only partial coverage for compounded drugs. This significantly increases the out-of-pocket costs for patients requiring such customized medications. The lack of standardized formulas and quality control processes for compounded drugs as compared to FDA approved drugs leads insurance providers to be cautious in providing full coverage.

Market Opportunity – Growing Demand for Compounded Drugs Globally

Growing demand for compounded drugs globally can offer major opportunity for the global compounding pharmacies market growth. There has been an increasing focus on more personalized healthcare solutions for patients, especially those with special clinical needs that cannot be met by traditional commercially available pharmaceutical products. Compounded medications allow pharmacists to tailor-make medications to meet the unique chemical, medical, and delivery requirements of individual patients based on their specific conditions and needs. This shift towards more customized care opens the door for compounding pharmacies to develop innovative formulations and delivery methods that improve treatment outcomes for patients. Compounding pharmacies can work closely with doctors to understand patients' medical history and current symptoms in order to prepare specialized drug therapies. For example, some patients may need a compounded medication available in a liquid form due to an inability to swallow pills, while others require allergens or dyes to be removed from medications. The ability of compounding pharmacies to create specialized formulations positions these well to meet the rising demand for personalized care globally.

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Product type segment is sub-segmented into oral, topical, rectal, nasal, and ophthalmic. Oral segment is estimated to hold 41.6% of the market share in 2024, owing to its convenience of administration. Oral medications are the most popular form of drug delivery as these can be easily taken without assistance. Patients, especially those suffering from chronic conditions, prefer oral medications as these are less invasive and do not require administration through injection, infusion, or application of creams/lotions. Oral medications also have longer shelf lives and storage stability as compared to topical or injectables. From the provider perspective, oral drugs are relatively cheap and easy to manufacture at large scale through advanced capsule and tablet-making technologies. This allows large scale production to meet widespread demands. Due to their non-invasive nature, oral drugs causes minimal adverse effects or discomfort during administration. This enhances patient compliance for long-term treatments. The convenience of oral self-administration at any time drives its popularity over alternative delivery pathways.

Insights, By Therapeutic Area: Hormone needs sustain HRT segment leadership

Therapeutic area segment is sub-segmented into hormone replacement therapy, pain management, specialty drugs, nutritional supplements, and others. Hormone Replacement Therapy segment is estimated to hold 37.1% of the market share in 2024, due to growing hormonal deficiencies among aging populations. Hormone deficiencies related to menopause, menopause, osteoporosis and other conditions are rising worldwide as average life expectancies increases. These deficiencies can severely impact quality of life, if left untreated. Compounded hormone preparations play a vital role in customizing dosages and formulations to suit individual needs, especially for those who cannot tolerate standard HRT drugs. The ability to precisely match hormones helps to relieve many symptoms like hot flashes, night sweats, reduced libido and risks of diseases. This makes HRT the most sought-after therapeutic area in compounding pharmacies. Rising demand for specialized, low-dose hormones and hormone creams that are not widely available through traditional pharmaceutical firms can drive the segment growth.

Insights, By Application: Geriatric care drives growth in geriatric applications

Application segment is sub-segmented into pediatric, adults, geriatrics, and veterinary. Pediatric segment is estimated to hold 32.6% of the market share in 2024 due to growing healthcare needs of aging populations. As life expectancies rise globally, age-related healthcare issues also increases at an unprecedented rate. Seniors over 60 years of age have complex needs arising from chronic illnesses, multiple comorbidities, inability to swallow large pills, thus, requiring specialized formulations like liquids, creams or transdermal applications. Compounding pharmacies address such needs by creating formulations tailor-made to each senior's health conditions and abilities. This ability to customize medications and doses according to individual tolerances and convenience makes compounding highly beneficial for geriatric applications. Furthermore, rising demand for specialized drugs that are not commercially available can drive the segment growth. Palliative and long-term care facilities also increasingly rely on compounding to meet the intricate needs of their senior residents.

Regional Insights

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North America remains the dominant region in the global compounding pharmacies market and is estimated to hold 37.3% of the market share in 2024 due to strong industry presence and demand for compounded medications. Compounding pharmacies have proliferated across major markets like California, Texas, Florida and New York, catering to the personalized healthcare needs of patients. Strong reimbursement structure for compounded drugs under the Section 503A of the FDA has supported the growth of these pharmacies in the region. Moreover, the export of compounded medicines from the U.S. to international markets has further boosted revenues. However, regulatory changes can hamper the market growth.

Asia Pacific region is emerging as the fastest growing market for compounding pharmacies globally. Countries like India, China, Japan and Australia are witnessing huge demand particularly for veterinary and pediatric compounds. Rapidly aging populations and rising affluence in these nations have increased healthcare spending on specialty medications. Export hubs in India and China are leveraging their low-cost manufacturing advantages to cater to international customers. The region also benefits from favorable import policies and price parity for compounded drugs as compared to branded products. While regulatory frameworks need strengthening and quality standards adoption is variable, APAC's healthcare industry maturity and evolving policies will support the compounding pharmacies sector over the long term.

Market Report Scope

Key Developments

• On April 10, 2024, Myonex, a global clinical trial supply company, announced that it hadcompleted its acquisition of Saveway Compounding Pharmacy. The acquisition allow Myonex to better supply patients in clinical trials with medication and equipment as needed. It will also help the company expand its clinical trial designs and include direct-to-patient and home healthcare provider capabilities.
• In November 2023, Precision Compounding Pharmacy, a technology-enabled compounding pharmacy that fulfills telemedicine prescriptions, announced that it had received a seed investment from Right Side Capital Management, a technology investment firm. The funds will allow Precision Compounding Pharmacy to enhance its suite of services, broaden its reach, and drive innovation in the pharmacy industry.
• In July 2022, Fagron, the leading global player in pharmaceutical compounding, acquired a 503B outsourcing facility from Fresenius Kabi in Boston. With this acquisition, Fagron expanded its U.S. sterile compounding footprint.
• In June 2022, Osceola Capital, a private equity firm, announced the eighth addition to the Revelation Pharma Corporation platform by purchasing Wedgewood Pharmacy’s human health book of business. Wedgewood Pharmacy operates compounding pharmacies that offer sterile and non-sterile compounded medications for animal patients in 50 states.
• In March 2021, the National Association of Boards of Pharmacy (NABP) announced that it had launched Compounding Pharmacy Information-Sharing Project with U.S. Food and drug Administration
• In March 2021, Osceola Capital, a lower middle-market private equity firm, announced the formation of Revelation Pharma Corp. to pursue investments and partnerships across the pharmacy compounding market in partnership with industry executives

*Definition: The process of combining, blending, or changing substances to make a treatment specific to the requirements of a particular patient is known as drug compounding. Combining two or more medications is referred to as compounding. In dermatology, compounded drugs are frequently utilized to aid improve therapy outcomes by the targeted activities of a particular chemical combination. Additionally, amid national drug shortages, compounded drugs serve as a source of medication.

Market Segmentation

• Product Type Insights (Revenue, USD Bn, 2019 - 2031)
  • Oral 
    • Capsule
    • Tablets
    • Mixtures
    • Lollipops
    • Lozenges
  • Topical
    • Gels
    • Ointments
    • Cream
    • Lotions
  • Rectal
  • Nasal
  • Ophthalmic 
•  Therapeutic Area Insights (Revenue, USD Bn, 2019 - 2031)
  • Hormone Replacement Therapy
  • Pain Management
  • Specialty Drugs
  • Nutritional Supplements
  • Others
•  Application Insights (Revenue, USD Bn, 2019 - 2031)
  • Pediatric
  • Adults
  • Geriatrics 
  • Veterinary
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Key Players Insights
  • Avella Specialty Pharmacy
  • Central Admixture Pharmacy Services
  • Fagron
  • Fresenius Kabi AG
  • PharMEDium Services
  • Institutional Pharmacy Solutions
  • Cantrell Drug Company
  • Triangle Compounding Pharmacies
  • Lorraine’s Pharmacy
  • Rx3 Compounding Pharmacy
  • B Braun SE
  • Clinigen Group PLC
  • QuVa Pharma
  • ITC Compounding Pharmacy
  • Advanced Pharmacy
  • Myonex