Healthcare & Life Sciences - Industry - Global Market, Share and Trends 2023-2028

Summary of Healthcare & Life Sciences

The healthcare and life sciences industry has shown remarkable resilience even amidst the challenges posed by the COVID-19 pandemic. As populations age and chronic diseases become more prevalent globally, demand for healthcare services and medical innovation continues to rise steadily. Key trends shaping the current landscape include greater focus on personalized and preventive care, rapid adoption of digital health technologies, growing role of real-world evidence in clinical decision making and emergence of new care delivery and payment models. The global Healthcare and Life Science market size was valued at USD 10,800 billion in 2023 and is expected to expand at a CAGR of 5.78% during the forecast period, reaching USD 15,142.5 billion by 2029.

After strong years propelled by rapid innovation and strong demand during the height of the COVID-19 pandemic, most HCLS companies faced business and economic headwinds during 2022, and deal making in various subsectors dropped back toward pre-pandemic levels. Another winter surge of COVID-19 cases at the beginning of the year continued to strain the resources of hospitals and physician practices, which faced employee shortages, supply chain delays, and rapidly rising costs, while life sciences companies faced their own intimidating worries.

Chief among those was passage of the Inflation Reduction Act (IRA), which opens the door for price negotiation for best-selling drugs. The invasion of Ukraine, surging inflation, and rapid interest rate hikes that led to steep improvements in borrowing costs added further complications.

Yet these are changed industries, with advances achieved at remarkable speed during the pandemic now shaping the way forward in many areas. From telehealth and decentralized diagnostic testing to cell and gene therapies and digital therapeutics, rapid innovation continues, leading to strategic repositioning by companies in many subsectors. Despite the astonishing challenges of 2022, deal making continued, often in the form of smaller acquisitions, partnerships, and licensing agreements.

Recent Trends and Insights

As obesity, diabetes, cardiovascular diseases have risen globally, there is growing prioritization of integrated care models and solutions that empower patients in self-managing chronic conditions.

The pandemic prompted unprecedented levels of virtual care adoption and highlighted the importance of telehealth, remote patient monitoring and other digital health tools. This shift to remote and digital care models is expected to persist even post-pandemic.

Both private and public payers are exploring alternative payment models that incentivize quality and health outcomes over volume. This includes growing emphasis on bundled payments, capitation contracts and risk-based population health programs.

From gene therapies to digital therapeutics to microbiome science, novel areas of medical research and new classes of treatment modalities continue to emerge. Substantial capital is also flowing into areas like regenerative medicine, immuno-oncology and precision medicine.

These trends are shaping the future of healthcare, emphasizing wellness and preventive medicine and addressing global health inequities. The life sciences market is attracting investments– with 60% of investors expecting more deals in 2023 than in 2022. The industry’s growth is influenced by a confluence of factors, including scientific advancements, economic conditions and the need for innovative solutions in healthcare and life sciences.

Product Insights

This remains the largest segment by revenue and includes small molecule drugs, biologics, vaccines and other prescription and OTC medicines across major therapeutic areas. Top-selling drug classes include those treating cancer, diabetes, respiratory diseases and autoimmune disorders.

Ranging from basic disposable supplies to advanced diagnostic imaging systems, medical devices see steady demand driven by aging populations and technological innovation. Key categories are–surgical/medical instruments, orthopedic and prosthetic devices, diagnostic imaging equipment and patient monitoring systems.

Digital health saw a major boost during the pandemic and includes electronic health records, telehealth solutions, remote patient monitoring platforms, clinical decision support systems and other health-related software. Healthcare AI and analytics are also growing areas.

This segment involves– diagnostic and clinical laboratory testing services for diseases, drugs, and wellness/preventive health. It spans specialty diagnostic tests, clinical trials testing services and anatomic pathology services.

Over-the-counter medicines, medical supplies, fitness/nutrition products and other items for personal healthcare represent a sizable retail market segment. e-Commerce is gaining prominence here.

Key Companies

Some major players within this vast domain of industry are

• IBM
• Microsoft
• AWS
• Inovalon
• Dolbey
• SAS Institute
• Oracle
• Averis
• IQVIA
• DSM

Regional Analysis

Within North America—certain countries represent the largest share of the global healthcare and life sciences market at an estimated $2.6 trillion in combined spending seen in recent times. Other countries face ongoing cost challenges with healthcare expenditures accounting for nearly 20% of GDP.

Within this region– like the southeast experience positive conditions for life sciences manufacturing and clinical research hubs. The APAC region’s market is expected to grow at the highest CAGR of 8.6% through 2026 to reach $560 billion, based on estimates.

Other countries with APAC– represent major country-level opportunities, supported by their large populations, growing health expenditures and investments in medical infrastructure and innovation.

In Europe—certain countries have well-established life sciences clusters and spend around 10% of GDP on healthcare on average. Digital health adoption is increasing across Europe to enhance healthcare delivery– access and efficiency.

In Latin America, Middle East, Africa– These regions show potential for growth driven by rising incomes, health reforms, urbanization and the need for innovative solutions (WHO).

The industry’s growth is influenced by a confluence of factors– including scientific advancements, economic conditions and the need for innovative solutions in healthcare and life sciences. mHealth and telehealth can help address infrastructure challenges in expanding access to care.

Market Segmentation

By Type:

• Pharmaceuticals
• Medical Devices
• Healthcare IT
• Diagnostics
• Biotechnology

By Product Type:

• Knowledge Management Tools
• Data Analysis Platforms (Structural & Functional)
• Services
• Others

By End User:

• Hospitals and Clinics
• Research Laboratories
• Diagnostic Centers
• Others

By Enterprise Size:

• Large Industries
• Small & Medium Industries

By Region:

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East and Africa

Our Methodology

We have offered a well-founded review of the global healthcare and life sciences market along with ongoing trends and upcoming projections to highlight proximate investment opportunities in this report. Moreover, an extensive analysis of any future prospects, challenges, competitors, or navigating aspects is also provided. A methodical detailed regional examination is presented.

Primary Research  

Our multi-pronged research approach includes interviews with industry leaders and a global survey of advanced manufacturing professionals to gain qualitative insights. We utilize our proprietary databases encompassing key performance indicators worldwide in order to collate relevant data points. A multivariate forecasting framework considering historical performance, current dynamics and qualitative factors are utilized to develop market sizing and growth projections through 2029.

We supplement our primary research with a careful examination of secondary materials such as– case studies, news stories and references from other sources. Organizations can benefit from the strategic advice and conclusions offered because they will be better equipped to respond to the dynamic nature of this industry and seize emerging possibilities.

We employ a comprehensive and iterative research methodology focused on minimizing deviation to provide the most accurate market estimates. Our research utilizes a combination of bottom-up and top-down approaches across segments and utilizes databases, primary research insights and industry experts for analysis.

Raw data is obtained from multiple sources and thoroughly filtered to ensure only authenticated and validated sources are considered. We collect data from raw material suppliers, industry associations, technology providers, and buyers to gain a holistic perspective.

Quantitative Analysis

Our market estimates are derived through statistical models, beginning with collection of historical data and analysis of macro- and micro-economic factors influencing the market. Gathered information on market dynamics, technology and pricing trends are utilised to build the models.

Econometric and technological models are applied to project short- and long-term market potential respectively. A bottom-up approach is preferred to minimize errors. Key parameters considered include market drivers and restraints, material pricing trends, regulatory scenarios, and capacity additions.

Weights are assigned to these parameters based on impact analysis and market forecasting is performed via statistical tools and techniques. We believe this methodology results in an accurate and realistic market picture.