“Legal” Marijuana Market

Although the Federal government considers possession of marijuana illegal and classifies marijuana as a Schedule I substance, one that has “no currently accepted medical use and a high potential for abuse” according to the Controlled Substances Act of 1970, all but eleven of the 50 states have decriminalized the possession of small amounts of marijuana at the state level. As of the end of 2016, twenty-four states have legalized some form of medical marijuana and eight states and the District of Columbia have legalized marijuana for recreational use. While the legalization of marijuana for recreational use is a new phenomenon—Colorado and Washington were the first states to legalize this activity in 2012—decriminalization at the state level began in 1973 and California was the first to legalize medical marijuana in 1996. Despite legalizing this drug, some states and municipalities are struggling with how to regulate this new industry. In Michigan, where medical marijuana has been legal since 2008, the governor didn’t sign legislation to regulate the industry until September 2016. Under the new regulations, the House Fiscal Agency estimates that annual medical marijuana sales will total $771 million, generating $21.3 million in state tax revenue. Michigan has 244,125 registered medical marijuana users and 40,702 registered caregivers.

Today’s market size shows the amount of revenue generated from legal medicinal and recreational marijuana sales in the United States in 2016 and projected sales for 2021.

Geographic reference: United States
Year: 2016 and 2021
Market size: $6.8 billion and $21.6 billion respectively
Sources: Kathleen Gray and Paul Egan, “Medical Pot Laws Creating a Frenzy,” Lansing State Journal, March 26, 2017, pages 1A, 15A and 17A; “Legality of Cannabis by U.S. Jurisdiction,” Wikipedia, available online here; “Timeline of Cannabis Laws in the United States,” Wikipedia, available online here; “Drug Schedules,” United States Drug Enforcement Administration, United States Department of Justice, available online here.
Original source: Arcview Market Research
Image source: Rexmedlen, “Cannabis-hemp-marijuana-1382955,” Pixabay, May 12, 2016 available online here.

Methamphetamine Laboratory Cleanup

MethLabs

The societal costs of the methamphetamine—crystal meth or simply meth for short—drug business, if we can call the trade in this illegal drug a business, is very difficult to calculate. It negatively impacts the health and welfare of the participants and the communities in which it is most active. These tend to be rural communities located in the mid-section of the country. The states fighting the largest battles with the meth trade are Missouri, Tennessee, Indiana and Kentucky.

The graph shows the number of methamphetamine laboratory incidents reported by the Drug Enforcement Administration (DEA) over the period 2004–2012. An incident is any seizure of a meth lab, a dump site or stashes of chemical and glassware. The graph also shows the quantity of methamphetamine seized by the DEA over this period.

There is one cost associated with the meth trade, of so many costs to society, that has been a stimulus to a legal business activity. That is the cost of cleaning up clandestine laboratories in which this drug is produced, or cooked in the vernacular of this trade. The methods used to make this drug also produce a lot of hazardous fumes and byproducts. Therefore, meth labs must be handled carefully and then thoroughly cleaned up after a seizure. The cost of such cleanups depends greatly on the size of the facility but it can run anywhere from $1,000 per site to $25,000 per site or even more in some extreme cases. Specially certified waste management firms and environmental consulting firms are contracted to carry out this cleanup work.

Today’s market size is the estimated amount spent in the United States cleaning up meth labs in 2012. Worth noting is the fact that this money was concentrated in the ten states in which most meth trade occurs. Together these ten states represent 82.4% of all meth lab incidents. For more details on which states have the highest level of meth activity, go to the DOJ website listed as the third source below.

Geographic reference: United States
Year: 2012
Market size: $29 million
Sources: (1) Jonah Engle, “Merchants of Meth,” Mother Jones, July/August 2013, page 33. (2) “DEA Domestic Drug Seizures,” part of a U.S. Department of Justice web site available online here. (3) “Methamphetamine Lab Incidents, 2004–2012,” another DOJ offering on its website here.
Original source: U.S. Department of Justice
Posted on November 22, 2013

Pharmacy Benefit Managers

The cost of prescription drugs in the United States is a subject about which there is much controversy. As the Affordable Care Act—or, Obamacare—gets off to a rocky start across the nation, we decided to look at just one small part of the prescription drug distribution network, about which most people are not particularly conscious. That is the segment made up of Pharmacy Benefit Managers (PBMs), middlemen who stand in a central position in the prescription drug supply chain and who, it turns out, have carved out for themselves a rather lucrative business. The three largest PBMs—Express Scripts, CVS Caremark, and OptumRx—together control about 70% of all prescriptions filled in the United States.

PBMs are firms that provide an administrative service to insurance companies, large self-insured employers, and government benefit providers. They develop and maintain drug formularies—lists of specific drugs to be covered and the prices for each—for their insurance providing customers. They also negotiate with pharmaceutical companies for preferred pricing on the drugs covered in those formularies and they negotiate with retailers to accept those terms and participate in the PBM’s network of preferred pharmacies.

According to an article in Fortune magazine, “PBMs started as paper pushers: They began hand-processing medical claims in the 1970s and evolved into middlemen who touted their ability to use corporate customers’ combined purchasing power to negotiate huge discounts from pharmaceutical companies. Today the top PBMs are as big as or bigger than their clients.” The United States has a unique health care delivery system, one which is significantly fuller of lucrative middleman-businesses than the systems present in other industrialized nations.

Today’s market size is the total estimated revenue earned by Pharmacy Benefit Managers in the United States in 2012.

Geographic reference: United States
Year: 2012
Market size: $250 billion
Source: Katherine Eban, “Painful Prescription,” Fortune, October 28, 2013, pages 202-207.
Original source: J.P. Morgan analysts
Posted on November 4, 2013

The Sleep Business

In 2012, approximately three-fourths of internet users searched online for health information. Half of them searched specifically for sleep remedies. According to the National Sleep Foundation, only 56% of Americans report getting a “good night’s sleep” on a typical night. Some sleep studies have found a link between insufficient sleep and hypertension, depression, diabetes, and other illnesses. Spending related to sleep has increased 8.8% yearly since 2008. Spending on over-the-counter sleep aids increased 31% from 2006 to 2011, with the biggest increase being spending on natural and homeopathic products.

Today’s market size is the estimated amount spent in the United States, in 2012, on things designed to aid sleep, from pills and medical devices to sleep consultants who work with hospitals and deluxe mattresses made with tension-relieving foams.

Wishing all our readers a sound night’s sleep!

Geographic reference: United States
Year: 2012
Market size: $32 billion
Source: Kit Yarrow, “The Sleep Industry: Why We’re Paying Big Bucks for Something That’s Free,” Time, January 28, 2013, available online here.
Posted on March 1, 2013

Growing Market for Epinephrine

Anyone with a child in school these days is likely to be very aware of the growing concerns related to food allergies. In many elementary schools in the United States, special tables in the lunch room are set aside for children whose lunches contain any nuts, like the traditional peanut butter and jelly sandwich. In some schools, foods containing nuts of any kind are banned entirely. This is because of a rising number of children who suffer from food allergies, particularly nut allergies, and the rising severity of their allergic reactions.

Nut allergies have been the fastest growing food allergies in recent years. In 1997, approximately 278,000 children under the age of 18 in the United States (0.04% of the age group) suffered from an allergy to peanuts. In 2008, that number had risen to over a million (1.5% of children in the age group).

Today’s market size is the estimated number of children (under the age of 18 years) in the United States who suffer severe food allergies. It is a calculation based on a study that showed that one in thirteen children suffer food allergies and that nearly 40 percent of those children suffer severe allergic reactions, severe enough to require the use of a drug like epinephrine to combat the reaction and save their lives.

Geographic reference: United States
Year: 2010
Market size: 2.28 million
Source: Katie Thomas, “Tiny Lifesavers for a Growing Worry,” The New York Times, September 8, 2012, page B1. Population data used to calculate today’s market size are from “Table 1. Population by Sex and Selected Age Groups: 2000 and 2010,” Age and Sex Composition: 2010, May 2011, one of the Census Bureau’s reports on the 2010 Census of the United States, available here.
Original source: A study published in the journal Pediatrics and referenced in the source article listed above.
Posted on September 12, 2012

Vitamin Sales

Today’s market size comes from a report about U.S. vitamin purchases published by a consumer analytics firm. The report goes into some detail about where people make purchases of vitamins and how that has been changing over the past few years.

Geographic reference: United States
Year: 2012
Market size: $12.2 billion
Source: “Vitamin Market Survey Sees Buyer Deficiency,” Progressive Grocer, August 3, 2012, available online here.
Original source: TABS Group
Posted on August 20, 2012

Pharmacy & Drug Stores

Drug Retailing

The sale of drugs, whether over-the-counter or prescription drugs, has been a healthy, growing business for a long time in the United States. The sale of these products through pharmacies and drug stores is the subject of our post today. The graph presents sales of these retailers over the period 1992–2010. The annual growth rate in sales over this period was 10.3%, a third faster than the economy as a whole, which grew at 7.2% annually.

Worth noting is the fact that over this same time period, the number of retail outlets selling drugs has increased as Big Box stores, grocery stores and others have gotten into the business of selling drugs with enthusiasm. Consequently, the role of pharmacies and drug stores in total drug sales has actually declined over this period.

Geographic reference: United States
Year: 2000 and 2010
Market size: $130.87 billion and $222.26 billion respectively
Source: Annual Retail Trade Survey 2009, and updates from the Monthly Retail Trade Reports from the same reporting series, U.S. Census Bureau, available online here.
Original source: U.S. Department of Commerce, Bureau of the Census
Posted on April 4, 2012

Prescription Drug Sales

Expenditures on health care in the United States have been much in the news for years now. The prices for prescription drugs are among the fastest growing of the segments of this overall industry. And yet, prescription drugs make up only around 10 percent of all expenditures on health care.

Today’s market size is the size of the market for prescription drugs sold through retail outlets in 2000 and 2010. In 2000 58 percent of the prescription drugs sold through retail outlets were brand name drugs. In 2010 brand-name drugs accounted for 29 percent of those sales.

Geographic reference: United States
Year: 2000 and 2010
Market size: $145.57 and $266.39 billion respectively
Source: Table 159. Retail Prescription Drug Sales,” Statistical Abstract of the United States 2012, page 113, U.S. Census Bureau, September 27, 2011, available here.
Original source: National Association of Chain Drug Stores
Posted on January 24, 2012

DTC Drug Advertising

Ad Spending

Direct-to-consumer (DTC) advertising of prescription drugs is a big business in the United States, as it is in New Zealand, the only other country in which this activity is legal. Anyone who watches TV for more than an hour or two a week will be more than familiar with the sorts of ads we are talking about, those that invariably end with an ominous list of potential side effects of the very drugs being pushed.

Until the late 1990s this advertising was quite limited by FDA regulations but in 1997 the FDA announced changes to those regulations (implemented in 1999) that freed up the pharmaceutical industry to start producing stylish ad campaigns for its most popular prescription drugs. The industry took full advantage, as the graph above clearly shows. Industry analysts suggest that the slowdown in spending starting in 2007 had more to do with the expiration of important brand name drugs (and their replacement with generics for which such spending is not done) than with the beginning of the recession.

Today’s market size is the amount spent by pharmaceutical companies on DTC prescription drug advertising in 2008.

Geographic reference: United States
Year: 2008
Market size: $4.57 billion
Source: For the data from 1989 through 2001: Francis B. Palumbo and C. Daniel Mullins, “The Development of Direct-to-Consumer Prescription Drug Advertising Regulations, Food and Drug Law Journal, Volume 57, Number 2, 2002. For the data from 2002 through 2005: Donahue Ph.D., Julie M., Marisa Cevasco, B.A. and Meredith B. Rosenthan, Ph.D., “A Decade of Direct-to-Consumer Advertising of Prescription Drugs,” The New England Journal of Medicine, August 16, 2007. For data from 2006 through 2008 the data are from Nielsen Media press releases.
Posted on January 20, 2012

Medical Marijuana

As of March 2011 there were laws in seven U.S. states that made it legal to sell and use marijuana for medicinal purposes. Those states were California, Colorado, Michigan, Montana, New Mexico, Oregon, and Washington. Four additional states and the District of Columbia are scheduled to open markets for medical marijuana before the end of 2011: Arizona, Maine, New Jersey and Rhode Island. The laws regulating the sale and use of marijuana in these states vary widely which makes tracking the market a complicated task. But as a fast growing market the motivation to track it is present and the task is made easier by the fact that marijuana is a highly regulated commodity and is therefore tracked carefully by most of the states in which its use for medical purposes is legal.

Today’s market size is the estimated value of marijuana sold legally in the United States. As a point of comparison, and according to the source, the sale of Viagra in the United States in 2010 was valued at $1.93 billion.

Geographic reference: Select states within the United States
Year: 2011
Market size: $1.7 billion
Source: Wayne Heilman, “Report: Medical Marijuana Sales to Reach $1.7B This Year,” The Gazette, Colorado Springs, March 24, 2011, available online here.
Original source: See Change Strategy and Medical Marijuana Markets

Drug Company R&D

The market size presented here is an estimate of the dollars spent by the pharmaceutical industry on research and development in 2009. This is a thorny and complex subject—what costs are included in R&D and how do pharmaceutical companies decide what to spend on developing new drugs and to modify old ones. For anyone interested in the subject beyond this quick snapshot, we recommend a report titled “Research and Development in the Pharmaceutical Industry,” published in 2006 by the Congressional Budget Office, and available online here.

Geographic reference: World
Year: 2009
Market size: $45.8 billion
Source: “New Federal Research Center Will Help Develop Medicines,” The New York Times, January 23, 2011, page 1.
Original source: Industry estimate

IBD Drug Market

IBD stands for Inflammatory Bowel Disease. An estimated 1.2 million Americans suffer from IBD. Leading brand name drugs designed to treat this disease include Asacol HD, Shire Lialda, Shire Pentasa and Prometheus Entocort EC.

Geographic reference: United States
Year: 2009
Market size: $1.56 billion
Source: “Santaris,” January 11, 2010.
Original source: IMS Health

Lice Treatments

With recent news about the reemergence of a bedbug infestation, we are reminded that the little pests that infest our lives from time to time must be dealt with over and over again. Lice are such pests and while not spoken of very often, the size of the market for lice treatments suggests that many battle these little pests in silence, behind closed doors.

Geographic reference: United States
Year: 2009
Market size: $65.88 million
Source: MMR, April 19, 2010, page 69.
Original source: SymphonyIRI

Allergy Treatments

The size of the market for drugs to treat allergies has fallen during the first decade of the 2000s. The likely reason for this decline in the value of sales is not a decline in the number of people suffering from allergies, rather it has to do with the fact that generic drugs have come onto the scene to compete with the leading name brand drugs. This was possible because the patents on several of those name brand drugs expired in the middle of the decade.

Geographic reference: United States
Year: 2003 and 2007
Market size: $7.5 billion and $5.1 billion respectively
Source: Medical Marketing & Media, May 2008, page 64.
Original source: IMS Health

Antipsychotic Drug Market

Just two decades ago antipsychotic drugs were a minor part of the overall pharmaceutical business. Today, according to The New York Times article from which this market size was taken, antipsychotics lead all other drug classes in term of revenue generated. One’s first thought upon reading this may be that we must be getting way more psychotic but it turns out that these strong drugs are now prescribed for a much broader range of ills.

The top-selling brand of this drug category is Seroquel, produced by AstraZeneca. Other leading brands include Abilify, Geoden, Leponex, Risperdal and Zyprexa. Some of these drug names may be familiar to you even though they are prescription drugs and even though you may never have used one. That has to do with direct-to-consumer advertising (DTC advertising) which was made legal in the United States in 1997. Since then, we have all become far more educated about brand name prescription drugs. Interestingly, only one other nation in the world (New Zealand) allows the direct-to-consumer advertising of prescription drugs.

Geographic reference: United States
Year: 2009
Market size: $14.6 billion
Source: The New York Times, October 3, 2010, page B1.

OTC Drug Market

Within the over-the-counter (OTC) drug market in Spain, cough and cold remedies are the largest category of drugs (32.1% of the market) followed by analgesics (21.9%) and digestives (17.8%).

Geographic reference: Spain
Year: 2009
Market size: $1.7 billion
Source: Spain Pharmaceuticals and Healthcare Report, March 2010, page 70
Original source: IMS Health, Business Monitor International and the Association of European Self-Medication Industry

Compounding Pharmacies in the United States

Data show the number of compounding pharmacies in the United States in 2010. Compounding pharmacists mix raw ingredients to prepare customized medications to meet the specific needs of patients. Between 1 and 5 percent of the population needs medications that are not commercially available. For example, compounding pharmacies can prepare gluten-free and lactose-free medications, specialized hormone therapy, or specialized doses of pain medication. Of the 400 compounding pharmacies in the United States, only 76 are nationally accredited by the Pharmacy Compounding Accreditation Board.

Geographic reference: United States
Year: 2010
Market size: 400
Source: Rebecca Jones, “Custom Cures,” Wayne State, Spring 2010, page 14. The publication is accessible online here.

Specialty Pharmacies, 2011

Data show predicted revenue for the year 2011. Specialty Pharmacies are a new type of pharmacy category. These firms offer more interactive services and emphasize their status as a health care provider more than a retail outlet. Here is a quote from a press release by Walgreens regarding their new line of Specialty Pharmacies:

“Walgreens Specialty Pharmacy provides personalized care and services through dedicated fulfillment centers across the country and electronically linked Walgreens pharmacies, including locations in academic medical centers, community hospitals and physician office buildings. Walgreens Specialty Pharmacy assists patients in obtaining medications, coordinates insurance benefits and provides individualized therapy management and clinical support. For more information, visit www.walgreenshealth.com/specialty.”

Geographic reference: United States
Year: 2011
Market size: $100 billion
Source: Rebecca Jones, “Custom Cures,” Wayne State, Spring 2010, page 13. The publication is accessible online here.
Original source: Walgreens

Prescription Drug Market

Data show the number of prescriptions filled in the United States in 2009.

Geographic reference: United States
Year: 2009
Market size: 3.5 billion
Source: Rebecca Jones, “Custom Cures,” Wayne State, Spring 2010, p. 13. The publication is accessible online here.