Specialty Drug Distribution Market - By Type , By Application , By Distribution Channel , By Geography - Global Opportunity Analysis & Industry Forecast, 2024 - 2030

Specialty Drug Distribution Market Overview

Specialty Drug Distribution Market Size is forecast to reach $ 1093 Million by 2030, at a CAGR of 13.50% during forecast period 2024-2030. High cost, high complexity or high touch drugs are known as specialty drugs. The price for specialty drugs is higher or equal to $670 per month. Pharmaceuticals known as specialty drugs are prescribed to patients with chronic conditions like cancer, rheumatoid arthritis, lysosomal acid lipase deficiency, inflammatory bowel disease and multiple sclerosis. Specialty pharmaceuticals are expensive injectable or oral medications. High-complexity medications need specific distribution, handling and temperature management. The main drivers propelling the market's expansion are the rising prevalence of chronic diseases and the growing need for specialty medications around the world. According to the arthritis organization more than 54 million adults and almost 300,000 children have arthritis or another type of rheumatic disease in 2021. Additionally, by 2040, the number of adults in the U.S., diagnosed with arthritis is estimated to be more than 78.4 million.

Specialty wholesalers handle distribution to smaller specialty pharmacies and retail pharmacies. In the United States more than 32,000 pharmacy locations which are half of the entire U.S, the pharmacy industry act as contract pharmacies for the hospitals and other healthcare providers that participate in the 340B program. Section 340B of the Public Health Service Act requires pharmaceutical manufacturers participating in Medicaid to sell outpatient drugs at discounted prices to health care organizations that care for many uninsured and low-income patients. Such a growing number of specialty drug distributors drive the growth of the Specialty Drug Distribution Industry over the forecast period 2024-2030.

Specialty Drug Distribution Market Report Coverage

The report: “Specialty Drug Distribution Market Forecast (2024-2030)" by Industry ARC, covers an in-depth analysis of the following segments in the Specialty Drug Distribution Market.

Key Takeaways

• Geographically, North America held a dominant market share in the year 2021, owing to the growing prevalence of chronic diseases such as rheumatoid arthritis, lysosomal acid lipase deficiency, inflammatory bowel disease, multiple sclerosis and the growing demand for specialty drugs fuel the growth of the Specialty Drug Distribution Market Size in this region.
• The Specialty Drug Distribution Market is predicted to increase owing to the growing demand for specialty drugs and the increasing prevalence of chronic disease in the market.
• However, the high cost of transportation and low availability of cold chains may limit the growth of the Specialty Drug Distribution Market over the forecast period 2022-2027.
• A detailed analysis of strengths, weaknesses, opportunities and threats will be provided in the Specialty Drug Distribution Market Report.

Specialty Drug Distribution Market Segment Analysis - by Application

Specialty Drug Distribution Market based on the application can be further segmented into AIDS drugs, Hemophilia drugs, Multiple Sclerosis drugs, Oncology drugs, lysosomal acid lipase deficiency drugs, inflammatory bowel disease drugs and Rheumatoid Arthritis drugs. The Rheumatoid Arthritis drug segment held a dominant market share in the year 2021. This is owing to the variety of specialty drugs available to treat rheumatoid arthritis. For instance, in April 2022, the U.S. Food and Drug Administration (FDA) approved RINVOQ for the treatment of ankylosing spondylitis (AS) and Rheumatoid Arthritis. Such a number of specialty medicine launched by key market players to treat rheumatoid arthritis and the need for such drugs around the world drive the growth of the Specialty Drug Distribution Market Share.

However, Oncology drugs are estimated to grow with the fastest CAGR of 14.8% over the forecast period 2024-2030. This is owing to the growing cases of cancer patients and the need for specialty drugs for treatment. The American Society of Health-System Pharmacists (ASHP) predicts that the pipeline for specialty drugs would increase by 8% annually until 2025. In July 2022, the Food and Drug Administration (FDA), approved crizotinib for myofibroblastic tumors. In June 2022, FDA approved lisocabtagene maraleucel for adult patients with large B-cell lymphoma. Also, in June 2022, FDA approved dabrafenib (Tafinlar, Novartis) in combination with trametinib (Mekinist, Novartis) for the treatment of metastatic solid tumors. Such a growing number of drugs approved by the FDA for the treatment of cancer fuel the growth of the Specialty Drug Distribution Market Share over the forecast period 2024-2030.

Specialty Drug Distribution Market Segment Analysis - by Distribution Channel

Specialty Drug Distribution Market based on the distribution channel can be further segmented into Hospitals & Care Providers, Independent Pharmacies, Large Chain Pharmacies, Online Stores and Specialty Pharmacies. The Hospitals & Care Providers segment held a dominant market share in the year 2021. This is owing to the growing cases of chronic diseases and the increasing need for hospitalization. In order to diagnose and cure severe acute disease, hospital treatment is crucial. However, the majority of hospitalized older patients also have a number of chronic conditions that are unrelated to the original reason for hospitalization. Such growing cases of chronic disease and the need for specialty drugs drive the growth of the Specialty Drug Distribution Market Share.

However, Specialty Pharmacies are estimated to grow with the fastest CAGR of 15.2% over the forecast period 2024-2030. This is owing to the growing number of specialty pharmacies and the low cost of drugs compared to hospitals that provided specialty drugs. According to a recent America's Health Insurance Plans (AHIP) report, hospitals typically charge twice as much for some medications as specialized pharmacies charge. The study from 2018 to 2020, found that hospital-administered medications cost, on average, $7,000 more per single treatment than those purchased from specialty pharmacies. Such price differences between the hospitals and pharmacies fuel the cost of the specialized drug and surge demand for specialty pharmacies. Hence, cost-effective specialty drugs offered by specialty pharmacies fuel the growth of the Specialty Drug Distribution Market Share over the forecast period 2024-2030.

Specialty Drug Distribution Market Segment Analysis - by Geography

The Specialty Drug Distribution Market based on Geography can be further segmented into North America, Europe, Asia-Pacific, South America and the Rest of the World. North America held a dominant market share of 29% in the year 2021. This is owing to the developed healthcare sector in this region and the growing demand for specialty medicines owing to the rising prevalence of chronic diseases. According to Crohn’s Colitis Foundation, about 1.6 million Americans suffer from inflammatory bowel disease (IBD) - which includes Crohn's disease and ulcerative colitis. Additionally, well-developed logistic solutions further fuel the growth of the specialty drug distribution market in this region. According to Datex Corporation, business-to-business logistics technology solution, one-third of all the spending on drugs in America is on specialty medications. Such favorable conditions and raising demand fuel the growth of the Specialty Drug Distribution Market Size in this region.

Furthermore, Asia-Pacific is estimated to grow with the fastest CAGR over the forecast period 2024-2030. This is owing to the large population living in this region and the growing demand for specialty drugs to minimize mortality as a result of chronic diseases. According to OECD, cancer is the second cause of death after Cardiovascular Disease (CVD) in this region. As per Cancer Atlas, there is more than 5.2 million cancer deaths occurred in this region in 2019. Such growing cases of mortality due to chronic disease create demand for specialty medicine which fuels the growth of the Specialty Drug Distribution Market Size over the forecast period 2022-2027.

Specialty Drug Distribution Market Drivers:

Growing Demand for Specialty Medicine Drives the Market Growth.

The growing prevalence of chronic diseases such as rheumatoid arthritis, lysosomal acid lipase deficiency, inflammatory bowel disease, multiple sclerosis, diabetes and others, create demand for specialty drugs for treatment. According to the National Multiple Sclerosis Society, about 2.3 million people live with multiple sclerosis around the world. Also, as per a research article published by ‘Ampersand Health’ in May 2022; 1 in every 123 people in the UK lives with either Crohn’s disease or ulcerative colitis. For the treatment of inflammatory bowel disease, drugs like Mesalamine, Corticosteroids, Immunomodulating drugs and others are used depending on the patient's treatment and condition. Such a growing prevalence of chronic disease surges demands for specialty medicines and fuels the growth of the Specialty Drug Distribution Industry over the forecast period 2024-2030.

Better Logistic Facilities Enhances Industry Expansion.

Pharmaceutical distributors are at the heart of the healthcare ecosystem. With the growing adoption of technology in every field, the logistic and delivery system upgrades itself with automation and software with new innovative technology. Healthcare logistics such as Bollore, DSV and others plays an important role in distributing medicine from producers to pharmacies and retailers. The new innovation, technologies, partnerships and collaborations are responsible for the growth of logistics as well as specialty drug distribution systems. For instance, in March 2022, DSV opened a 95000 m² warehouse and office premises near Copenhagen. In July 2022, Bolloré Logistics and Air France KLM Martinair Cargo signed an agreement aimed at continuing and further expanding both parties’ sustainability partnership. Such growth in key logistics market players drives the growth of the Specialty Drug Distribution Industry over the forecast period 2024-2030.

Specialty Drug Distribution Market Challenges

Low Availability of Cold Chains Hampers Market Growth

The specialty medicines are very sensitive to heat and to distribute such highly sensitive medicines cold chain is necessary. The cold chain includes various types of refrigerators, cold storage facilities, disposable cold boxes and many more things for operation. Sensitive medications are kept within a specified temperature range as they circulate through the supply system via a properly operating cold chain delivery system. Unless medication is certified stable at other temperature ranges, the US Food and Drug Administration mandates that refrigerated biologics be stored and transported between 2°C and 8°C (36°F and 46°F). Temperature changes during transportation cause the worldwide pharmaceuticals business to lose medicines valued at more than $15 billion each year, as per India Brand Equity Foundation (IBEF) report 2020. Such a huge loss of pharmaceuticals owing to the low availability of cold chains may hamper the growth of the Specialty Drug Distribution Industry over the forecast period 2024-2030.

Specialty Drug Distribution Industry Outlook

Product launches, mergers and acquisitions, joint ventures and geographical expansions are key strategies adopted by players in the Specialty Drug Distribution Market. The top 10 companies in the Specialty Drug Distribution Market are:

1. H.D. Smith
2. Morris & Dickson
3. Wal-Mart
4. MSC Industrial
5. W. W. Grainger Inc.
6. Fastenal Company
7. Cintas Corporation
8. Amerisource Bergen
9. Mckesson Corporation
10. Cardinal Health

Recent Developments

• In June 2022, MSC INDUSTRIAL SUPPLY CO, a premier distributor of Metalworking and Maintenance, Repair and Operations supplies to industrial customers throughout North America, announced to acquisition Engman-Taylor, a distributor of metalworking tools and supplies. Under the agreement, Engman-Taylor will continue to do business under its current name after becoming an MSC company. Engman-Taylor will be able to offer customers access to MSC's 2 million-plus products, inventory management and other supply chain solutions.
• In January 2022, Walmart announced a strategic partnership with Ribbit Capital to create a fintech start-up. This new venture will develop and offer innovative and affordable financial solutions” to customers and employees of Walmart.
• In June 2020, Grainger, the leading broad line supplier of maintenance, repair and operating (MRO) products serving businesses and institutions announced it has entered into a definitive agreement to sell its distribution business in China, Grainger China LLC. This divestiture will better enable Grainger to focus on its key businesses and geographies.

Key Market Players:

The Top 5 companies in the Specialty Drug Distribution Market are:

1. Smith Drug Company
2. Morris & Dickson
3. Walmart
4. Cencora, Inc.
5. MCKESSON CORPORATION

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