PHARMACEUTICAL retailing revenue in Australia is forecast to grow by 3.9% over the next five years, to reach $16.4 billion in 2020-21, according to a new pharmacy Industry Overview Report published by Bankwest as part of its Business Insights series.
The report states that the landscape of the pharmaceutical retailing industry is set for a period of growth, with Australia's ageing population and positive attitude to health and well-being assisting the growth of the industry.
Bankwest said disposable income is a key component in pharmaceutical retail expenditure, particularly for OTC items such as vitamins and skin care products.
However, the report also set out challenges facing the industry over the next five years, which include an intensifying of competitive pressures, falling prices due to price disclosure, ongoing discounting tactics and the looming patent cliff.
Wholesalers are also covered, with the report confirming the majority of supplier terms for retail pharmacy are under 30 days, as an outcome of the reforms of the CSO.
"Retail pharmacy has largely adapted with the formation of buying groups along with short trading terms with favourable discounts," the report added.
Bankwest executive gm, Business Banking Sinead Taylor said the report, which complements the Bankwest UTS Community Pharmacy Barometer, identified several important drivers behind the industry's predicted growth.
"It's pleasing to see the relative health of the pharmaceutical retail industry, but what's especially useful is that a report like this is able to chart the drivers as well as the challenges facing the industry," Taylor said.
Revenue per established pharmaceutical retailer is forecast to decline over the next five years, with the report also noting a massive 30.1% increase in pharmaceutical exports over the last 12 months - but despite this exports are still lower than in 2012.
The report also collates data on the number of pharmaceutical retailing establishments, industry employment and gives a state-by-state breakdown of the sector.
See www.bankwest.com.au.
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