Worldwide

EvaluatePharma estimates the size of the worldwide pharmaceutical market in 2019 to be $844 billion, of which 9.4% is generics1, which is broadly in agreement with a 2018 report from Efpia which estimated the worldwide market size to be $853 billion in 20172. By comparison, IQVIA estimates the total value of the worldwide pharmaceutical market in 2020 to be ~$1.27 trillion3 and the value of the top 10 markets by total sales to be $893 billion in 2019 (see table below)4.

This graphic from Efpia shows their estimate of the contribution to pharmaceutical revenue by region2.

Where I was able to find publicly available and credible information detailing the size of the pharmaceutical market in a specific region I have included it in the below sections.

North American pharmaceutical market

US pharmaceutical market

The US is by far the most important single pharmaceutical market in the world for drug developers, with a total size generally estimated to be in the range of $400-500 billion annually. Both EvaluatePharma5 and OECD6 data estimate ~$400 billion in 2018/2019, with IQVIA47 estimating ~$500 billion in 2019.

Overall, the US accounts for 40-50% of total pharmaceutical product revenue (specific estimates vary e.g. 45%8, 48%5). However, the split of US vs. rest of world revenues differs significantly by product and indication principally because the US has historically had free pricing rather than health technology assessment driven reimbursement, which tends to affect certain indications more than others, for example:5

  • Solid tumour indications, cardiology, vaccines and infectious diseases are among the therapy areas with more even US vs. rest of world revenues
  • Revenue from immunology, dermatology and hematologic malignancies tend to be heavily weighted towards the US

Additionally, the US often represents a higher share of revenue (~60%) for new launches (i.e. launches in past 5 years)2, in part because time to reimbursement and revenue is slower in many other markets and global launches are generally sequential rather than simultaneous.

Canadian pharmaceutical market

Government sources report the size of the Canadian pharmaceutical market to be approximately $25 billion as of 2019 (30 billion Canadian dollars)9. This is broad agreement with IQVIA’s2 estimate of $22.6 billion in 2019 and the OECD6 estimate of $33 billion in 2019.

European pharmaceutical market

The total estimated size of the pharmaceutical market for various European regions is given below:

  • Europe as a whole:
    • $241 billion (Efpia using IQVIA data, 2016)2
  • The 27 member states of the European union:
    • $195 billion (estimation from World Bank health expenditure data)
  • The EU5 (Germany, France, UK, Spain, Italy):
    • $148 billion (Efpia using IQVIA data, 2016)2
    • $159 billion (Statista, 2018)10
    • $168 billion (estimation from World Bank health expenditure data)
    • $171 billion (IQVIA, 2019)4
    • $178 billion (IQVIA, 2018)11
    • $218 billion (OECD, 2018)6
  • Nordics (Norway, Sweden, Denmark, Finland, Iceland):
    • $13 billion (Efpia using IQVIA data, 2016)2
    • $13.1 billion (OECD, 2018)6
  • Benelux (Belgium, Netherlands, Luxembourg):
    • $11.9 billion (Efpia using IQVIA data, 2016 - not including Luxembourg)2
    • $13.5 billion (OECD, 2018 - not including Luxembourg)6

This table from an Efpia report below (which uses IQVIA data) shows the breakdown of estimated pharmaceutical market sizes in European countries in 20162. From this data it can be derived that the EU5 have a market value of €121,505 billion in total, ~71% of the total revenue from EU member states plus the UK and ~61% of the total revenue of all the countries represented in the table.

Asian pharmaceutical market

Chinese pharmaceutical market

The Chinese pharmaceutical market has been growing rapidly in recent years and is now the second largest market for pharmaceuticals, after the US.

IQVIA estimated the total value of the Chinese market to be $137 billion in 201811, estimates from other sources are generally in the same range plus or minus $20 billion. IQVIA’s lower estimate of $94.9 billion in the table above includes the hospital market only4. However, there are outlier estimates such as one from Statista10 with an estimate of $232 billion in 2018 and estimation from World Bank health expenditure data which gives an estimate of $86 billion.

Japanese pharmaceutical market

Japan has historically been the most important Asian market for pharmaceuticals and is considered a member of the 7 “major markets” along with the US and EU5, although this is changing as China recently eclipsed Japan as the 2nd largest market overall. IQVIA variously estimates a total market size of ~$79 billion in 20194 or $86 billion in 201811, Statista10 $94.6 billion in 2018 and the OECD6 ~$101 billion in 2017.

Latin American pharmaceutical market

The below graph from Statista12 shows 2019 market size estimates for major Latin American countries which together represent ~91% of the total population of Latin America. The sum of the values in the below graph is $45.12 billion, which if we assume accounts for 91% of the Latin American market (based on population) places the value of the total Latin American market at ~$50 billion in 2019 (approximately 4% of the worldwide pharmaceutical market, in concordance with Efpia estimates2 and [[#^1ef90d|estimation from World Bank health expenditure data]]). OECD data puts the size of the Mexican pharmaceutical market in 2018 at ~$32 billion and the Colombian market at ~$9 billion in 2017, however these are likely overestimates considering the above data6

African pharmaceutical market

Data on the African pharmaceutical market is limited, but a 2015 McKinsey report estimated the value of the market to be $20.8 billion in 201313

Australian market size

Government sources report the size of the Australian pharmaceutical market to be $17.4 billion (22.3 Australian dollars) as of 201814. By comparison, the OECD6 estimates a total market size of $16.5 billion in 2017.

How correlated is market size with healthcare expenditure?

The below plot uses healthcare expenditure data from the World Bank15 plotted against the available pharmaceutical market size data described above (US and China are extreme outliers and so are not shown). The correlation of the two variables is high (\(r^2\) = 0.92), implying that 12.3% of healthcare expenditure is a reasonably good estimator of the size of the pharmaceutical market in a given country.

Summary table: approximate percentage contribution of specific regions to overall total pharmaceutical market

Region Percent contribution to total pharmaceutical revenue Estimated annual pharmaceutical market value
United States 43% $500 billion
EU5 15% $170 billion
China 12% $140 billion
Japan 7% $85 billion
Latin America 4% $50 billion
Canada 2% $25 billion
Middle East & North Africa* ~2% ~$25 billion
Australia and Oceania* ~2% ~$20 billion
India* ~2% ~$20 billion
Nordics 1% $13 billion
Benelux 1% $13 billion
Sub-Saharan Africa* ~1% ~$11 billion
Rest of Europe (incl. Russia, Turkey)* ~5% ~$60 billion
Rest of Asia (incl. Korea, Singapore) ~3% ~$35 billion

*No high quality data source identified, using rough estimate and/or values based on World Bank healthcare expenditure data

Last updated: May 2021

  1. World Preview 2019, Outlook to 2024 https://info.evaluate.com/rs/607-YGS-364/images/EvaluatePharma_World_Preview_2019.pdf ↩

  2. The Pharmaceutical Industry in Figures https://www.efpia.eu/media/361960/efpia-pharmafigures2018_v07-hq.pdf ↩ ↩2 ↩3 ↩4 ↩5 ↩6 ↩7 ↩8 ↩9 ↩10

  3. https://www.statista.com/topics/1764/global-pharmaceutical-industry/#dossierSummary ↩

  4. IQVIA MIDAS https://www.iqvia.com/-/media/iqvia/pdfs/canada/2019-trends/top10worldwidesales_en_19.pdf?la=en&hash=5B6D9922E053B42D9F2A1FD7A1883A87 ↩ ↩2 ↩3 ↩4 ↩5

  5. EvaluatePharma data 2020 ↩ ↩2 ↩3

  6. OECD Pharmaceutical spending https://data.oecd.org/healthres/pharmaceutical-spending.htm ↩ ↩2 ↩3 ↩4 ↩5 ↩6 ↩7 ↩8

  7. IQVIA Medicine Spending and Affordability in the U.S. 2020 https://www.iqvia.com/insights/the-iqvia-institute/reports/medicine-spending-and-affordability-in-the-us ↩

  8. https://www.abpi.org.uk/facts-and-figures/global-pharmaceutical-market/shares-of-the-global-pharmaceutical-markets/#abe40e62 ↩

  9. https://www.ic.gc.ca/eic/site/lsg-pdsv.nsf/eng/h_hn01703.html ↩

  10. https://www.statista.com/statistics/1085570/pharmaceutical-market-size-by-region/ ↩ ↩2 ↩3

  11. The Global Use of Medicine in 2019 and Outlook to 2023, IQVIA https://www.iqvia.com/insights/the-iqvia-institute/reports/the-global-use-of-medicine-in-2019-and-outlook-to-2023 ↩ ↩2 ↩3

  12. Statista 2019 data https://www.statista.com/statistics/418021/revenue-from-pharmaceutical-industry-in-latin-america-by-major-country/ ↩

  13. Africa: A continent of opportunity for pharma and patients https://www.mckinsey.com/~/media/McKinsey/Industries/Pharmaceuticals%20and%20Medical%20Products/Our%20Insights/Africa%20A%20continent%20of%20opportunity%20for%20pharma%20and%20patients/Africa_a_continent_of_opportunity_for_pharma_and_patients.pdf ↩

  14. Medicines in the health system - Australian Institute of Health and Welfare https://www.aihw.gov.au/reports/australias-health/medicines-in-the-health-system ↩

  15. https://data.worldbank.org/indicator/SH.XPD.CHEX.PC.CD ↩