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Healthcare eCommerce Market in North America, Forecast to 2022

  • Report

  • 116 Pages
  • March 2019
  • Region: North America
  • Frost & Sullivan
  • ID: 4758238

Drug and Device eCommerce Growth Opportunities in the Changing Paradigm of Healthcare Consumerism

Healthcare, as an industry, is entering a phase of rapid transformation. Digitization of products, services, and commerce models is democratizing current healthcare systems and unlocking new previously inaccessible segments. The fundamental convergence of healthcare with IT and retail industry continues to shift eCommerce from simple search portals for buying products to the digital marketplace that provides personalized experience and informed purchase decision making. This is manifesting into a new era of healthcare consumerism; today hospital buyers and patients are equally expecting a retail-like buying experience. Furthermore, as tech-savvy millennials are expected to overtake boomers, in terms of population, in 2019, eCommerce models with personalized UX/UI will be the preferred marketing channels for medical products and services. Entailing this, North America’s healthcare eCommerce market for pharma drugs and medical devices is projected to cross $200 billion by 2022, growing at a CAGR of 10% to 15%. The author defines healthcare electronic commerce (eCommerce) as “the application of communication and information-sharing technologies during the process of marketing, exchanging, servicing, buying, and selling of healthcare products, professional services, funds, and information over an electronic network, primarily by phone and Internet connectivity. It combines business and electronic infrastructure which allows traditional business transactions to be conducted electronically, ignoring the physical or geographic boundaries separating them”.

Furthermore, it’s critical to understand that, eCommerce is not a software or IT platform feature. It is an evolving ecosystem that digitally-led emerging business models such as servicization, amazonization, uberization, and shared-economy among others.

Trends in both, demand (cost and pricing pressures) and supply side (health consumerization), coupled with increasing competition from non-traditional participants (e.g., Amazon, Ali Health, Apple, and so on) are fuelling the adoption of eCommerce. This compels drug/device Original Equipment Manufacturers (OEMs), wholesalers, GPOs, PBMs, distributors, and retailers to operate differently by leveraging on eCommerce to achieve much-needed operational efficiencies, standardize purchasing process, optimize supply chain inefficiencies, and improve end-user experience. Additionally, digital marketplace scalability provides drug/device companies the opportunity to differentiate with value-add services, such as free shipping, same-day delivery, online payment, product quality certificate, discounts, customer feedback on services, as well as the ability to connect 24x7, which is an important element in the overall buying experience. There is no one-size-fits-all eCommerce strategy for healthcare products. Drug and device OEMs and other supply chain participants should prioritize their eCommerce strategy based on the maturity of their buyers by using a suitable mix of available digital tools for educating, researching product information, and management of order and payment. Apart from drug/device types and purchase volumes, factors such as market positioning, target end user, and reimbursement play a critical role in eCommerce channel selection and success.

Research Scope
This research service analyzes the key trends and developments around healthcare eCommerce with specific focus on the eCommerce market for pharma drugs and medical devices in North America. The study also provides market projections, opportunity analysis by supply chain participants, strategic imperatives, and select industry best practices or case studies, both for pharma drugs and medical device segments.

Key Issues Addressed

  • What are the macro to micro factors driving healthcare eCommerce trends?
  • What is the current and expected eCommerce market penetration (percentage) by drug and device sales ($) for the North American region?
  • What product (drug and device) segments and supply chain participants will be the most impacted by eCommerce?
  • What are the key factors considered to succeed in the eCommerce strategy by key commerce models for select healthcare products and services?
  • What will be the impact of Amazon on the healthcare industry? How will the convergence of retail, IT, and healthcare industries disrupt traditional commerce models?
  • What are the key eCommerce opportunities for drug and device companies? Which are some of the industry best practices (examples/case studies)?

Table of Contents

1. Executive Summary
  • Macro to Micro Visioning - Healthcare eCommerce
  • Healthcare eCommerce - Drug and Device Market Overview
  • Medical Device eCommerce - Strategic Priorities and Preferred Channels
  • eCommerce Opportunity Analysis by Medical Device Portfolio
  • Pharma Drug eCommerce - Strategic Priorities and Preferred Channels
  • eCommerce Opportunity Analysis by Pharma Drugs and Therapeutic Types

2. Research Scope and Definition
  • Research Objective and Methodology
  • Research Scope and Definition
  • The Difference Between eCommerce and eBusiness

3. Macro to Micro Visioning - Key Themes Driving Healthcare eCommerce
  • Demand- and Supply-side Trends Driving eCommerce in Healthcare
  • Increasing Cost and Pricing Pressure
  • Healthcare Interactions - Patients as Consumers
  • Business Model Shifts
  • Technology Shifts
  • Healthcare Digital Transformation Attractiveness Luring New Entrants
  • Growth Opportunity - Emerging Business Models in Healthcare
  • Heat Map - Emerging Business Models in the Healthcare Space
  • Amazonization Implication for Traditional Segments and Participants
  • Amazon - Well Positioned to Disrupt the Home-health Space
  • Possible Business Model - Direct-to-consumer Healthcare

4. Healthcare eCommerce Market Revenue Projections
  • Revenue Forecast by Sales Channel - Medical Device eCommerce Market
  • Revenue Forecast Assumption - Medical Device eCommerce Market
  • Medical Device eCommerce Channels Preference by Device Type
  • Medical Device eCommerce Channels Preference by Service Scope
  • Revenue Forecast by Sales Channel - Pharma Drugs eCommerce Market
  • Revenue Forecast Assumption - Pharma Drugs eCommerce Market
  • Pharma eCommerce Channels Preference by Drug Type
  • Pharma Drugs eCommerce Channels Preference by Service Scope

5. Medical Device eCommerce Opportunity Analysis by Supply Chain Participants
  • US Medical Device eCommerce Evolution Timeline
  • Supply Chain Evolution Factors for Medical Device Industry
  • Traditional Medical Device Distribution Model by Major Stakeholders
  • Classification of Medical Device eCommerce Strategy by Supply Chain Participants
  • Medical Device Manufacturer Challenges and Role of eCommerce
  • Case Example - Medical Device eCommerce and Scope of Process Optimization
  • Select Global Medical Device Manufacturer eCommerce Play
  • GPO Market Challenges and Role of eCommerce (US)
  • Select GPOs Manufacturer eCommerce Play (US)
  • Select Medical Supplies Distributors eCommerce Play (US)
  • Digital Marketplace Models Reshaping the US Medical Device Industry
  • Case Study - Guthrie Health System Partners With OpenMarkets to Improve Capital Equipment Procurement Process

6. Medical Device eCommerce - Strategic Imperatives and Select Case Studies
  • Providers and Suppliers - Current Commerce Model Pain Points
  • eCommerce Platforms to Optimize Supply Chain Inefficiencies
  • Medical Device eCommerce - Adoption by Digital Channels Types
  • Limitation With EDI and Benefits of Digital B2B eCommerce
  • eCommerce Opportunity Analysis by Medical Device Portfolio
  • eCommerce Strategy by Medical Device Type
  • Classification of eCommerce Strategy by Medical Device Types for Hospital Buyers
  • Case Study - Amazon’s B2B Play: The Ecommerce Expert’s Strategies
  • Case Study - Abbott: Direct to Consumer Medical-grade CGM
  • Case Study - Valedo: Gamifing Back Pain Therapy for Home Care
  • Case Study - Syncera: Rep-free Orthopedic Supply Chain Model
  • Case Study - WestCMR’s Reverse eCommerce Play
  • Case Study - SikkaSoft’s Cloud-based App Platform
  • Case Study - Medline Industries eCommerce Play
  • Case Study - Stryker Performance Solutions JointCOACH
  • Case Study - OPM: On-demand 3D Printed Medical Implants
  • Case Study - Cohealo: Medical Equipment Collaborative Consumption
  • Concluding Thoughts - Why Medical Device Manufacturers Need eCommerce?

7. Pharma Drug eCommerce Opportunity Analysis by Major Supply Chain Participants
  • Drug Supply Chain Analysis (US)
  • Classification of B2B Pharma eCommerce Strategy by Stakeholder
  • Pharma eCommerce - From Patient Communication to Engagement
  • Baxter’s SHARESOURCE Telehealth Platform for Home Dialysis Patients
  • Wholesalers - Shifting Momentum Toward Specialty Pharma
  • Cardinal Health - Stepping up to Support Pharmacies in eCommerce Revolution
  • Pharmacies - Diversifying Services and Delivering Care
  • CVS Health Specialty Medication eCommerce Platform
  • Pharmacy Benefit Managers - Managing Risk to Stay Relevant
  • Select PBM eCommerce Play - Recalibrating Toward Value-based Healthcare
  • Amazonization Implication for Pharma Supply Chain Participants

8. Pharma Drugs eCommerce - Strategic Imperatives and Select Case Studies
  • Key Challenges Facing the Pharmaceutical Industry
  • Addressing the Challenges Through eCommerce
  • Regulatory Trends
  • Pricing Trends (US)
  • Therapeutic Trends
  • eCommerce Opportunity Analysis by Pharma Drugs and Therapeutic Types
  • Opportunity Analysis Framework - Emerging eCommerce Models
  • eCommerce Strategies to Address the Existing Challenges
  • Key Success Factors for eCommerce by Pharma Drug Types
  • Classification of Pharma eCommerce Strategy by Drug Type
  • Strategic Imperatives - Pharma Drugs eCommerce
  • Case Study - Mango Health: Gamifing Health
  • Case Study - Digital Pharmacist Inc.: Omni-channel Patient Communication Platform
  • Case Study - Capsules: From Commodity to Experience Delivering
  • Case Study - GoodRx and Sproxil: Transparency in Supply Chain to Prices
  • Case Study - Addicaid: Engaging Addiction Care Program
  • Case Study - GlaxoSmithKline Australia
  • Concluding Thoughts
  • Legal Disclaimer

9. Appendix
  • List of Acronyms and Explanations
  • Revenue Forecast Assumption - Total Medical Device and Pharma Drugs Market, North America, 2018
  • Evolving Medical Device Service-based Business Model
  • Evolution of Pharmaceutical Landscape - Risk-based Everything
  • MedTech eCommerce Strategy for Patient Centricity
  • List of Exhibits

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Abbott
  • Addicaid
  • Amazon
  • Baxter
  • Cardinal Health
  • Cohealo
  • CVS
  • Digital Pharmacist Inc.
  • GlaxoSmithKline Australia
  • GoodRx
  • Guthrie Health System
  • Mango Health
  • Medline Industries
  • OpenMarkets
  • OPM
  • SikkaSoft
  • Sproxil
  • Stryker
  • Syncera
  • Valedo
  • WestCMR