e-Pharma: the rise of online pharmacy

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e-Pharma: the rise of online pharmacy

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e-Pharma: the rise of online pharmacy

e-Pharma: the rise of online pharmacy

Key Takeaways

Australia has a significant pharmacy market which has been growing steadily. With an ageing population, and a nation that is becoming increasingly health-conscious, the pharmaceutical industry revenue is expected to grow at around 2.9% per annum over the next 5 years to reach $22.2bn by 2025.

We anticipate that online pharmaceutical spend will reach around $3.0bn by 2025, which represents around 14% of the total pharmaceutical expenditure. Regulatory changes, user convenience and COVID-19 are expected to result in a substantial uplift in the online fulfilment of prescription drugs and the purchase of OTC and general pharmaceutical products. Getting to 14% online penetration represents a ‘catch-up’ in online penetration, and is roughly equal to Australia’s current online penetration of non-food retail.

An aging population in Australia will result in pharmaceutical expenditure growing faster than the population. Frequency of dispensing ranges widely with those over 60 years fulfilling around 33 prescriptions a year, versus those under 34 only fulfilling around 3 per year.

There are currently around 5,800 pharmacies in Australia, which have an average revenue of around $3.3m. We anticipate ongoing growth in the number of pharmacies (0.8% per annum in the next five years) and modest consolidation in revenue of pharmacies (growing to $3.7m by 2025).

The average pharmacist dispenses around 60,000 prescriptions a year and the PBS is their main source of their revenues. The PBS (Pharmaceutical’s Benefit Scheme) represents over 60% of the total funding versus the co-payment and Section 100 funding.

 

Key Statistics

Australia has a significant pharmacy market and has been growing steadily. With an ageing population, and a nation that is becoming increasingly health-conscious, the pharmaceutical industry revenue is expected to grow at around 2.9% per annum over the next 5 years to reach $22.2bn by 2025. Electronic prescriptions are being introduced as a new way to fulfill prescriptions under two models: the Token Model and the Active Script List Model. Under the National Health Act 1953, Pharmaceutical benefits can only be prescribed by doctors, dentists, optometrists, midwives and nurse practitioners who are approved to prescribe PBS medicines. Electronic prescribing aims to provide convenience and choice to patients while improving PBS efficiency, compliance and drug safety.

Online Penetration

We anticipate that online pharmaceutical spend will reach around $3.0bn by 2025, which represents around 14% of total pharmaceutical expenditure. Regulatory changes, user convenience and COVID-19 are expected to result in a substantial uplift in the online fulfilment of prescription drugs and purchase of OTC and general pharmaceutical products. Getting to 14% online penetration represents ‘catch-up’ online penetration, and is roughly equal to the penetration of non-food retail in Australia presently.

Pharmacy Expenditure by State

NSW and Victoria make up around 59.4% of total expenditure in Australia. This is projected to grow to roughly 60.3% by 2025 in line with the future projected population growth.

Pharmacy Numbers

There are currently around 5,800 Pharmacies across Australia. This is expected to grow to only 6,027 by 2025, resulting in consolidation in revenue to $3.7m per pharmacy.

Pharmaceutical Dispensary

There are currently around 350m prescriptions dispensed each year which is expected to grow to around 375m a year by 2025. This is at a CAGR growth rate of 1.57% for the next 5 years.

Venture Insights Dashboards

Venture Insights interactive dashboards allow significant benefits including:
  • changing data ranges and forecast periods
  • reviewing the forecast numbers (by hovering over the charts)
  • change the chart views by removing various series
The interactive version of the below analysis can be found here.