According to a new EY report ‘e-pharma: delivering healthier outcomes’, e-pharma players are expected to attain a combined market size of US$2.7 billion by 2023 from about US$360 million currently in the next four years. The key growth drivers for e-pharma market are increase in internet penetration and smartphone ownership along with the ease of ordering medications through an e-commerce platform, increase in chronic diseases, rising per capita income and resultant healthcare spend.
e-pharma presents a total addressable market size of US$9.3 billion as of 2019 and is estimated to grow at a CAGR of 18.1% to reach US$18.1billion by 2023. Interestingly, 35% of the domestic pharmaceutical market relates to chronic medications and the remaining 65% to acute medicines. Out of this, e-pharmacies are expected to target 85% of the chronic market and 40% of the acute medicine market (up from 25% in 2019) by 2023. This expected rise in the acute target market by e-pharmacies, can be attributed to an improvement in last mile logistics through collaboration with local pharmacies and integrating into existing hyperlocal model.
Based on EY analysis, some of the other key findings from the report are:
- Cash burn in the e-pharma industry is common, because the discounts (up to 35% for some) exceed the margins in the chain (about 30-32%).
- e-pharmacies have other potential revenue generating opportunities that can further increase their overall market beyond the estimated US$2.7 billion by 2023.
- e-pharma companies are likely to rely on innovative digital marketing strategies to increase their customer base, user engagement and transactions/user.
