Compounding Pharmacies in the US - Market Research Report (2014-2029)
New York, United States
Last Updated: September 2024
NAICS OD5706Revenue
$19.0bn
Past 5-Year Growth
Profit
$XXX.Xm
Employees
33,983
Businesses
1,159
Wages
$X.Xbn
Compounding Pharmacies in the US industry analysis
The compounding pharmacy industry finds itself increasingly at the center of legal actions initiated by pharmaceutical manufacturers. These lawsuits primarily focus on intellectual property violations, where manufacturers accuse compounding pharmacies of stepping beyond their regulatory boundaries by reproducing commercially available drugs. This uptick in litigation corresponds with the rise in compounding practices over the last five years despite the stricter regulatory framework under Section 503A of the Federal Food, Drug and Cosmetic Act, which stipulates the conditions under which compounded drugs do not require FDA approval.
Trends and Insights
- Compounding pharmacies are facing a surge in lawsuits from pharmaceutical manufacturers over intellectual property and unfair competition issues. These legal actions highlight tensions between the growing prevalence of compounding practices and the restricted scope intended under federal regulations.
- An increasing population of older adults enables compounding pharmacies to capitalize on steady demand. As this market grows, medical expenses rise as well, providing a boon to compounding pharmacies.
- Compounding pharmacies operate near hospitals and other key downstream markets. Dense populations in states like New York and California are crucial hubs for compound pharmaceutical activity.
- The lack of one-to-one substitutes shields compound pharmacies from external competition. This results in more intense internal competition as pharmacies fiercely compete with one another on price and based on reputation.
Industry Overview
Market size and recent performance (2014-2029)
Industry revenue has grown at a CAGR of 4.3 % over the past five years, to reach an estimated $19.0bn in 2024.
Trends and Insights
Compounding pharmacies are seeing a rise in lawsuits from pharmaceutical manufacturers
- The rise in legal actions has been driven by the growing prevalence of compounding practices over the past five years, despite the heightened regulatory oversight imposed on 503A compounding at the federal level. Section 503A of the FDC Act outline conditions under which compounded drugs are exempt from certain federal requirements.
- Additional trends and insights available with purchase
Source: IBISWorld
Industry outlook (2024-2029)
Market size is projected to grow over the next five years.
Trends and Insights
As the population ages, demand for medications will continue to grow
- As the US population becomes older, there is expected to be a corresponding increase in age-related health issues such as arthritis, heart disease and cognitive disorders. Older adults often have unique medication needs that off-the-shelf drugs cannot always meet, necessitating customized medications in specific dosages or delivery forms.
Biggest companies in the Compounding Pharmacies in the US
| Company | Market Share (%)
2024 | Revenue ($short_0)
2024 | Profit ($short_0)
2024 | Profit Margin (%)
2024 |
|---|
There are no companies that hold a large enough market share in the Compounding Pharmacies in the US industry for IBISWorld to include in this product.
Products & Services Segmentation
Source: IBISWorld
Industry revenue is measured across several distinct product and services lines, including Drugs compounded for specific patients , Drugs compounded for hospitals and Drugs compounded for ambulatory setting. Drugs compounded for specific patients is the largest segment of the Compounding Pharmacies in the US.
Trends and Insights
An aging population provides steady demand for drugs compounded for specific patients
- This product segment typically encompasses drugs that are compounded to meet specific patient needs, such as allergies and patients' inability to take medications via particular routes of administration. For example, some compounded drugs may enable patients to take multiple drugs in one sitting.
- More insights available in the full report
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Competitors
- Brand Name Pharmaceutical Manufacturing in the US
- Generic Pharmaceutical Manufacturing in the US
- Drug, Cosmetic & Toiletry Wholesaling in the US
- Pharmacies & Drug Stores in the US
Complementors
- Primary Care Doctors in the US
- Specialist Doctors in the US
International industries
- Pharmacies & Drug Stores in Canada
- Pharmacies in Australia
- Pharmaceutical, Cosmetic and Toiletry Goods Retailing in New Zealand
- Dispensing Chemists in the UK
- Dispensing Chemists in Ireland
Table of Contents
About this industry
Industry definition
This industry includes stores that make and sell compounded medications that are not commercially available. Compounded medications are those that are prescribed and written by physicians and prepared by pharmacists for individual patients. This industry does not include pharmacies that outsource compounding services to third parties.
What's included in this industry?
Drugs compounded for specific patientsDrugs compounded for hospitalsDrugs compounded for ambulatory settingCompanies
Purchase this report to view all major companies in this industry.
Related Terms
PHARMACEUTICAL COMPOUNDINGMORTAR AND PESTLEFOOD AND DRUG ADMINISTRATION (FDA)TRANSDERMALIndustry Code
NAICS 44611 - Compounding Pharmacies in the US
Performance
Get an indication of the industry's health through historical, current and forward-looking trends in the performance indicators that make or break businesses.
Analyst insights
Compounding pharmacies are facing a surge in lawsuits from pharmaceutical manufacturers over intellectual property and unfair competition issues. These legal actions highligh...
In this chapter (4)
- Current Performance
- Outlook
- Volatility
- Life Cycle
Key metrics
- Annual Revenue, Recent Growth, Forecast, Revenue Volatility
- Number of Employees, Recent Growth, Forecast, Employees per Business, Revenue per Employee
- Number of Businesses, Recent Growth, Forecast, Employees per Business, Revenue per Business
- Total Profit, Profit Margin, Profit per Business
Charts
- Revenue, including historical (2014-2023) and forecast (2024-2029)
- Employees, including historical (2014-2023) and forecast (2024-2029)
- Businesses, including historical (2014-2023) and forecast (2024-2029)
- Profit, including historical (2014-2024)
- Industry Volatility vs. Revenue Growth
- Industry Life Cycle
Detailed analysis
- Trends in supply, demand and current events that are driving current industry performance
- Expected trends, economic factors and ongoing events that drive the industry's outlook
- Key success factors for businesses to overcome volatility
- How contribution to GDP, industry saturation, innovation, consolidation, and technology and systems influence the industry's life cycle phase.
Products and Markets
Learn about an industry's products and services, markets and trends in international trade.
Analyst insight
An increasing population of older adults enables compounding pharmacies to capitalize on steady demand. As this market grows, medical expenses rise as well, providing a boon ...
In this chapter
- Products & Services
- Major Markets
Key metrics
- Largest market segment and value in 2024
- Product innovation level
Charts
- Products & services segmentation in 2024
- Major market segmentation in 2024
Detailed analysis
- Trends impacting the recent performance of the industry's various segments
- Innovations in the industry's product or service offering, specialization or delivery method
- Key factors that successful businesses consider in their offerings
- Buying segments and key trends influencing demand for industry products and services
Geographic Breakdown
Discover where business activity is most concentrated in an industry and the factors driving these trends to find opportunities and conduct regional benchmarking.
Analyst insights
Compounding pharmacies operate near hospitals and other key downstream markets. Dense populations in states like New York and California are crucial hubs for compound pharmac...
In this chapter (1)
- Business Locations
Charts
- Share of revenue, establishment, wages and employment in each state
- Share of population compared to establishments in each region in 2024
Tables
- Number and share of establishments in each state in 2024
- Number and share of revenue each state accounts for in 2024
- Number and share of wages each state accounts for in 2024
- Number and share of employees in each state in 2024
Detailed analysis
- Geographic spread of the industry across North America, and trends associated with changes in the business landscape
- Key success factors for businesses to use location to their advantage
Competitive Forces
Get data and insights on what's driving competition in an industry and the challenges industry operators and new entrants may face, with analysis built around Porter's Five Forces framework.
Analyst insights
The lack of one-to-one substitutes shields compound pharmacies from external competition. This results in more intense internal competition as pharmacies fiercely compete wit...
In this chapter (4)
- Concentration
- Barriers to Entry
- Substitutes
- Buyer & Supplier Analysis
Key metrics
- Industry concentration level
- Industry competition level and trend
- Barriers to entry level and trend
- Substitutes level and trend
- Buyer power level and trend
- Supplier power level and trend
Charts
- Market share concentration among the top 4 suppliers from 2019-2024
- Supply chain including upstream supplying industries and downstream buying industries, flow chart
Detailed analysis
- Factors impacting the industry’s level of concentration, such as business distribution, new entrants, or merger and acquisition activity.
- Key success factors for businesses to manage the competitive environment of the industry.
- Challenges that potential industry entrants face such as legal, start-up costs, differentiation, labor/capital intensity and capital expenses.
- Key success factors for potential entrants to overcome barriers to entry.
- Competitive threats from potential substitutes for the industry’s own products and services.
- Key success factors for how successful businesses can compete with substitutes.
- Advantages that buyers have to keep favorable purchasing conditions.
- Advantages that suppliers have to maintain favorable selling conditions.
- Key success factors for how businesses can navigate buyer and supplier power.
Companies
Learn about the performance of the top companies in the industry.
Analyst insights
There are no major companies. Varying regulations lead to localized demand that stifles cross-state activity, and the specialized nature of compounded medications lessens the...
In this chapter
- Market Share Concentration
- Companies
- Company Spotlights
Charts
- Industry market share by company in 2020 through 2024
- Major companies in the industry, including market share, revenue, profit and profit margin in 2024
Detailed analysis
External Environment
Understand the demographic, economic and regulatory factors that shape how businesses in an industry perform.
Analyst insights
The FDA allows some flexibility in compounding regulations during drug shortages, suspending certain restrictions that usually apply to compounded drugs. This exemption helps...
In this chapter
- External Drivers
- Regulation & Policy
- Assistance
Key metrics
- Regulation & policy level and trend
- Assistance level and trend
Charts
- Regulation & Policy historical data and forecast (2014-2029)
- Assistance historical data and forecast (2014-2029)
Detailed analysis
- Demographic and macroeconomic factors influencing the industry, including Regulation & Policy and Assistance
- Major types of regulations, regulatory bodies, industry standards or specific regulations impacting requirements for industry operators
- Key governmental and non-governmental groups or policies that may provide some relief for industry operators.
Financial Benchmarks
View average costs for industry operators and compare financial data against an industry's financial benchmarks over time.
Analyst insights
Regulatory compliance and skill requirements elevate labor costs. Compounding pharmacies require skilled pharmacists and technicians trained in sterile and non-sterile compou...
In this chapter
- Cost Structure
- Financial Ratios
- Key Ratios
Key metrics
- Profit margin, and how it compares to the sector-wide margin
- Average wages, and how it compares to the sector-wide average wage
- Largest cost component as a percentage of revenue
- Industry average ratios for days' receivables, industry coverage and debt-to-net-worth ratio
Charts
- Average industry operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2024
- Average sector operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2024
- Investment vs. share of economy
Data tables
- Industry Multiples (2017-2022)
- Industry Tax Structure (2017-2022)
- Income Statement (2017-2022)
- Balance Sheet (2017-2022)
- Liquidity Ratios (2017-2022)
- Coverage Ratios (2017-2022)
- Leverage Ratios (2017-2022)
- Operating Ratios (2017-2022)
- Cash Flow & Debt Service Ratios (2014-2029)
- Revenue per Employee (2014-2029)
- Revenue per Enterprise (2014-2029)
- Employees per Establishment (2014-2029)
- Employees per Enterprise (2014-2029)
- Average Wage (2014-2029)
- Wages/Revenue (2014-2029)
- Establishments per Enterprise (2014-2029)
- IVA/Revenue (2014-2029)
- Imports/Demand (2014-2029)
- Exports/Revenue (2014-2029)
Detailed analysis
- Trends in the cost component for industry operators and their impact on industry costs and profitability
Key Statistics
Industry Data
Data Tables
Including values and annual change:
- Revenue (2014-2029)
- IVA (2014-2029)
- Establishments (2014-2029)
- Enterprises (2014-2029)
- Employment (2014-2029)
- Exports (2014-2029)
- Imports (2014-2029)
- Wages (2014-2029)
Methodology
How are IBISWorld reports created?
IBISWorld has been a leading provider of trusted industry research for over 50 years to the most successful companies worldwide. With offices in Australia, the United States, the United Kingdom, Germany and China, we are proud to have local teams of analysts that conduct research, data analysis and forecasting to produce data-driven industry reports.
Our analysts start with official, verified and publicly available sources of data to build the most accurate picture of each industry. Analysts then leverage their expertise and knowledge of the local markets to synthesize trends into digestible content for IBISWorld readers. Finally, each report is reviewed by one of IBISWorld’s editors, who provide quality assurance to ensure accuracy and readability.
IBISWorld relies on human-verified data and human-written analysis to compile each standard industry report. We do not use generative AI tools to write insights, although members can choose to leverage AI-based tools within the platform to generate additional analysis formats.
What data sources do IBISWorld analysts use?
Each industry report incorporates data and research from government databases, industry-specific sources, industry contacts, and our own proprietary database of statistics and analysis to provide balanced, independent and accurate insights.
Key data sources in the US include:
- US Census Bureau
- US Bureau of Labor Statistics
- US International Trade Commission
Analysts also use industry specific sources to complement catch-all sources, although their perspective may focus on a particular organization or representative body, rather than a clear overview of all industry operations. However, when balanced against other perspectives, industry-specific sources provide insights into industry trends.
These sources include:
- Industry and trade associations
- Industry federations or regulators
- Major industry players annual or quarterly filings
Finally, IBISWorld’s global data scientists maintain a proprietary database of macroeconomic and demand drivers, which our analysts use to help inform industry data and trends. They also maintain a database of statistics and analysis on thousands of industries, which has been built over our more than 50-year history and offers comprehensive insights into long-term trends.
How does IBISWorld forecast its data?
IBISWorld’s analysts and data scientists use the sources above to create forecasts for our proprietary datasets and industry statistics. Depending on the dataset, they may use regression analysis, multivariate analysis, time-series analysis or exponential smoothing techniques to project future data for the industry or driver. Additionally, analysts will leverage their local knowledge of industry operating and regulatory conditions to impart their best judgment on the forecast model.
IBISWorld prides itself on being a trusted, independent source of data, with over 50 years of experience building and maintaining rich datasets and forecasting tools. We are proud to be the keystone source of industry information for thousands of companies across the world.
Learn more about our methodology and data sourcing on the Help Center.
Frequently Asked Questions
Unlock comprehensive answers and precise data upon purchase. View purchase options.
What is the market size of the Compounding Pharmacies in the US industry in United States in 2024?
The market size of the Compounding Pharmacies in the US industry in United States is $19.0bn in 2024.
How many businesses are there in the Compounding Pharmacies in the US industry in 2024?
There are 1,159 businesses in the Compounding Pharmacies in the US industry in United States, which has grown at a CAGR of 2.3 % between 2019 and 2024.
Has the Compounding Pharmacies in the US industry in United States grown or declined over the past 5 years?
The market size of the Compounding Pharmacies in the US industry in United States has been growing at a CAGR of 4.3 % between 2019 and 2024.
What is the forecast growth of the Compounding Pharmacies in the US industry in United States over the next 5 years?
Over the next five years, the Compounding Pharmacies in the US industry in United States is expected to grow.
What does the Compounding Pharmacies in the US in United States include?
Drugs compounded for specific patients and Drugs compounded for hospitals are part of the Compounding Pharmacies in the US industry.
How competitive is the Compounding Pharmacies in the US industry in United States?
The level of competition is moderate and steady in the Compounding Pharmacies in the US industry in United States.
