The market for pharmaceuticals counts as one of the new e-commerce growth drivers since its deregulation in 2004. In this first part of his guest post, Matthias Storch, founder and CEO of the medicine comparison engine Apomio, gives an overview on the market for online pharmacies. In the second part, he will give his view on future developments. 

The Online Pharmacy Market in Figures

The revenue from over-the-counter (OTC) medicines of the German mail-order industry was 486 million euro in 2008, in comparison to 397 million euro in 2007. That is an increase of 22 percent.

Since the market for prescription-free products decreased slightly in that time period, it suggests a shift [of buying behaviour] from offline to online.

German regulatory bodies have allowed pharmacies since 2004 to sell “pharmacy only” medicines by mail-order (not necessarily prescription drugs, but nonetheless products which are restricted for sale only by a qualified pharmacist).

To this day, 2,300 pharmacy mail-order licenses have been issued. About 300 – 500 pharmacies actively use their licences to mail out pharmaceutical products, however only about 3 percent of them (about 12-15 online pharmacies) manage to send out more than 1000 shipments per day.

Even so, the mail-order business of pharmacy controlled products (albeit prescription-free) has managed to establish itself.

Prescription drugs, due to the complicated ordering process and pricing controls, are expected to take an inferior role by most online pharmacies for now and into the future.

According to a study by IMS Healthcare (German PDF) on the OTC (over-the-counter) product trade, the portion sold by mail lies on average at 3-4 %. For specific products, especially large packages, the ratio can rise to up to 20%.

The portion of OTC revenue from mail-order business should exceed the 10 percent mark at latest by 2010.

Particularly interesting for the online business are large and expensive packages, where the consumer can save up to 60%. For example: an 800 pack Wobenzym, PZN (pharmaceutical product number) 3968699, suggested retail price: 138.75 euro, online: 86.28 euro.

In the second part of his guest post, Mattias Storch will describe current and future market strategies.

Originally posted in German by Matthias Storch for excitingcommerce.de, adapted for excitingcommerce.com by Jason Soo.