The Pharmacy Sector is comprised of several distinct sub-sectors which all continue to the supply chain of medications from manufacturer to the patient. These include retail, institutional, compounding and specialty pharmacy operations. In recent years, the distribution channels have expanded to include on-line mail order and home delivery. These sectors all have unique opportunities… and challenges as they serve a surging breadth of medicines and their administration to the patient.
Retail
The Pharmacy and Drug Store Franchises industry comprises operators that retail a range of prescription and over-the-counter medications, beauty items, toiletries and consumable goods directly to consumers. Operators in this industry are retail locations that function under franchise agreements dictating, to varying degrees, the terms and conditions under which these retailers may market themselves and operate. Over the five years to 2021, the industry has exhibited relatively stable growth. During this five-year period, the industry has grown at an annualized rate of 1.1% to $5.8 billion in 2021. In 2021 alone, industry revenue is anticipated to increase 3.7%, as patients resume regular healthcare visits
The U.S. drugstore/pharmacy market in North America and predominantly in the United States has become a multi-faceted entity, selling not only medicines, but also items such as confectionery, cosmetics and groceries. In 2015, pharmacy and drug store sales amounted to approximately 263.47 billion U.S. dollars. In 2015, CVS Health was the second leading drug store chain in the United States, generating about 153.3 billion U.S. dollars as a corporation; about 52.5 billion U.S. dollars of that total was generated solely by Rx sales.
Institutional
This industry comprises pharmacies that provide a range of services to residents of nursing homes, hospitals or hospice environments that do not have an onsite pharmacy. In addition to providing pharmaceuticals, institutional pharmacies also provide consulting services, which include monitoring the control, distribution and administration of drugs and assisting with regulation compliance.
Compounding
Over the five years to 2020, the Compounding Pharmacies industry has exhibited growth due to several favorable factors, including an increase in the number of dispensed prescriptions and increased total health expenditure. As the burgeoning elderly population has dealt with various chronic illnesses that require medication, demand for compounded pharmaceuticals has risen. For example, patients have used compounded prescriptions to access medications with alternative dosages; routes of administration; ingredients, due to patient allergies; and flavorings that are not otherwise commercially available.
Specialty
Specialty pharmacies are distinct from traditional pharmacies in coordinating many aspects of patient care and disease management. They are designed to efficiently deliver medications with special handling, storage, and distribution requirements with standardized processes that permit economies of scale. Specialty pharmacies are also designed to improve clinical and economic outcomes for patients with complex, often chronic and rare conditions, with close contact and management by clinicians. Health care professionals employed by specialty pharmacies provide patient education, help ensure appropriate medication use, promote adherence, and attempt to avoid unnecessary costs. Other support systems coordinate sharing of information among clinicians treating patients and help patients locate resources to provide financial assistance with out-of-pocket expenditures.
M&A Transaction Activity
Below are M&A transaction activities which has been compiled from our work with these companies and research in publicly available information. For additional information, please contact us here.
