Pharma Outlook: Trends and Market Insights for 2025

In 2024, the pharmaceutical industry saw significant growth in several key segments, including cardiovascular treatment, oncology, and biopharmaceuticals. Additionally, the previous year witnessed exponential growth in the generic drug market, with India playing a pivotal role and becoming a global hub for generic pharmaceutical manufacturing. Pharma experts predict that this growth trajectory will continue into 2025.

From artificial intelligence and machine learning revolutionizing drug discovery to biologics, the pharmaceutical industry will embrace innovation to deliver targeted treatments and enhance efficiency. This article explores the outlook for the pharmaceutical industry in 2025.

Three Market Trends Coming in Focus

Personalized Medicine

The COVID-19 pandemic significantly changed how people view medicine. The one-size-fits-all formula for medicine is slowly becoming outdated, as people are becoming tired of the traditional care that fails to meet expectations, schedules and each individual’s unique requirements. Many patients are seeking more tailored and personalized healthcare solutions, leading companies to explore the personalized medicine segment.

2024 saw several breakthroughs in personalized medicine. Notably, Mayo Clinic’s research team developed an artificial intelligence (AI)-based system to deliver personalized medication alerts based on patient-specific genomic data. A research team from the Dana-Farber Cancer Institute in Boston developed personalized vaccines for renal cell carcinoma. Such breakthroughs are driving the personalized medicine sector.

In the following year, experts predict that the market size of personalized medicine will increase. According to recent reports, the global market size of personalized medicine ($386.27 billion in 2024) will increase to $426.82 billion in 2025. The following years will see a compound annual growth rate (CAGR) of 11.6%, with the market size increasing to $662.67 billion by 2029.

The primary driver of this growth is the increase in the prevalence of rare diseases. According to a report, approximately 300 million people are living with a rare disease. Unlike common disorders, identifying and treating the root cause of rare diseases may be the only way to treat the patient. Precision medicine has shown extraordinary advantages to this end. Genomic sequencing can be used to address the root cause of the condition with targeted therapy.

Biologics and Biosimilars

Biosimilars are safe, effective, and similar versions of approved biologics (a biologics drug produced from living cells). Biosimilars, while similar, are not identical to biologics; hence, their entry into the market has been highly controlled by regulatory bodies. Currently, biosimilars can only be manufactured and sold in the market only after the patent for the original biologic has expired.

In the pre-pandemic era, the market entry of biosimilars (even after patent expiry) was highly controlled due to the lack of clear product guidelines and healthcare professional (HCP) caution. However, during the pandemic, regulatory bodies diverted their attention from drug pipelines to developing cost-effective solutions to the lack of API availability, resulting in an increase in biosimilar sales after the pandemic. For example, Pfizer reported a 53.4% year-on-year growth in its biosimilar segment in 2020-2021.

In the following years (2021-2024), this growth trajectory has continued. Between 2023 and 2030, the biosimilar segment is expected to increase at a CAGR of 17.3%. In the following year, similar growth can be expected due to various drivers:

• Patent expiration: While a biologics patent typically lasts 20 years, this is enough time for other pharma manufacturers to develop biosimilars. Since 2020, patents for various popular biologics have expired, allowing biosimilars to be entered into the market. This patent expiration will boost the market.
• Strategic partnerships: Considering their upcoming patent expirations, various Big Pharma companies are partnering with local or international small- and mid-sized pharma manufacturers to get an early start in the biosimilars market. For example, Johnson & Johnson has partnered with South Korea-based Celltrion to market the biosimilar of Stelara (Johnson & Johnson’s medication for autoimmune disease) in the USA.
• Reduced cost: As biologics production is expensive, biosimilars can be used as less expensive alternatives. The price of biosimilars is 15-35% lower than the cost of the respective biologics, decreasing the out-of-pocket cost for patients, which is further driving the growth in this market.

Telemedicine and E-Pharmacies

Telemedicine and e-pharmacies have slowly gained popularity in recent years. A report found that the e-drug store market in India grew at a CAGR of 63%  between 2018 and 2022. 2024 saw several breakthroughs in the telemedicine and e-pharmacy segments. For example, many pharma companies expanded their direct-to-customer services by integrating telemedicine. Pfizer launched the PfizerForAll platform that connects patients to doctors, supports medication delivery, provides diagnostic services, and schedules vaccine appointments. CVS, a popular American pharmacy chain, also launched an app to optimize customer convenience.

This momentum from 2024 is expected to continue in 2025. The online pharmacy market (valued at $112.46 billion in 2024) is expected to increase to $131.65 billion in 2025. It is expected to continue growing at a CAGR of 17.06% between 2025 and 2033, finally reaching a size of $543.36 billion by 2023. This growth has several drivers:

• Increased prevalence of chronic diseases: The number of people living with chronic diseases has increased in the past decades. For such patients, e-pharmacies and telemedicine are indispensable. They can get the required medication delivered quickly through an online pharmacy. As the prevalence of chronic diseases increases, the demand for telemedicine and e-pharmacy services will also increase.
• Ageing population: Similar is the case in countries with an ageing population. Elderly people can rely on the convenience and speed of e-pharmacies and telemedicine services to get the necessary healthcare, further boosting the market.
• Strategic partnerships: Health insurance companies have partnered with online pharmacies to provide coverage in their outpatient departments. In the future, such partnerships with other stakeholders, such as hospitals and pharma companies, will also boost the telemedicine and e-pharmacy segments.
• Increased government support: In select countries, government support for telemedicine and e-pharmacies has increased as governments hope to increase healthcare access in rural areas. For example, the Indian Ministry of Health and Family Welfare has undertaken several key initiatives to promote telemedicine, such as the National Medical College Network and National Telemedicine Network. Such initiatives will boost the development of telemedicine and e-pharmacy segments.

While each segment has its unique drivers, there’s one goal driving the growth of all three: sustainability.



Sustainability Initiatives: A Hidden Driver, Easily Ignored

In the wake of recent publications revealing the shocking pollution levels and environmental footprint of the pharma industry, pharma companies and regulators alike have been under increased pressure to make their operations and products more sustainable.

Pharma companies are increasingly adopting sustainability initiatives to reduce their environmental footprint. For example, green chemistry, carbon neutrality, waste management, sustainable sourcing, and ethical business practices are some of the key sustainability initiatives announced by pharma companies. Pfizer has announced that it aims to achieve net-zero emissions by 2040, with a 25% decrease in business travel-related emissions in 2025. On the other hand, Johnson and Johnson achieved 100% renewable energy use on all sites in the USA and Canada in 2024 and will be expanding similar goals to other international sites. Novartis has announced that it wishes to be water-neutral by 2030.

As other pharma companies follow suit and announce their sustainability initiatives, new trends and segments are likely to emerge. In the following year, the pharma sector may realize the full potential of many existing segments, make significant developments in new segments, and even find new areas for better patient care. 

Statistical data is referred from Business Research Company, The Lancet Global Health, and Fortune Business Insights.