April 12, 2024
Taxable Retail Market

Taxable Retail Market Poised to Grow Substantially due to Technological Innovations in Drug Formulation and Delivery Systems

The taxable retail market comprises pharmaceutical products such as prescription drugs, over-the-counter drugs, herbal and alternative medicines that can be purchased without a prescription from a licensed healthcare professional. These medicines provide relief from common health conditions affecting various body systems such as digestive health, pain relief, respiratory infections, skin problems and more. Advancements in drug formulation have enabled development of convenient delivery systems like transdermal patches, sublingual tablets, orodispersible films etc. that facilitate self-administration and improve patient compliance.

The global taxable retail market is estimated to be valued at US$15.55 billion in 2024 and is expected to exhibit a CAGR of 5.3% over the forecast period of 2024 to 2030.

Key Takeaways
Key players operating in The Taxable Retail Market are Allergan, Novartis, Pfizer, Takeda Pharmaceutical Company, Cook Medical, Medtronic, Johnson & Johnson, AstraZeneca, GlaxoSmithKline, Sanofi, Merck, Abbott Laboratories, Bayer, Astellas Pharma, Aurobindo Pharma, Ferring Pharmaceuticals, Salix Pharmaceuticals, Eli Lilly, Bristol-Myers Squibb, Boehringer Ingelheim. These players are focusing on new product launches, strategic collaborations and acquisitions to strengthen their market position.

The taxable retail market provides significant opportunities for industry players in terms of exploring new therapeutic areas, expanding in developing markets and upgrading sales and distribution networks. Technological developments like advanced coating techniques, nanotechnology and 3D printing offer possibilities for developing innovative galenic forms of medicines.

Continuous R&D into novel drug delivery systems, enhancement of bioavailability and miniaturization of drug formulation will further fuel the growth of taxable retail market. Initiatives directed towards awareness generation about self-medication of common illnesses also present a major growth driver.

Market Drivers
Rising prevalence of chronic diseases worldwide on account of shifting lifestyles and increasing geriatric population forms a key market driver. Easy availability of medicines without prescription also propels the demand for taxable retail products. Growing patient preference for convenient self-administrable drug formulations is another factor contributing to market expansion. Improving access to healthcare in developing regions additionally augments the adoption of taxable retail medications.

Current challenges in Taxable Retail Market:
The taxable retail market is currently facing challenges like increasing burden of taxes across products and services, complex tax codes across regions and countries leading to compliance issues, transparency issues in tax collection framework. The burden of multiple indirect and direct taxes is increasing the operating costs for retailers.

SWOT Analysis
Strength: Tax collecting authorities have set up robust digital infrastructure for tax collection and compliance. Complex product categories are standardized with set tax rates.

Weakness: Frequent changes in tax rates impact retailers’ pricing and profitability. Lack of harmonization of tax systems across regions leads to compliance issues for multi-regional retailers.

Opportunity: Development of analytics driven tools for retailers to analyze impact of tax changes and optimize pricing. Scope for tax authorities to introduce transparent and stable tax regimes to improve ease of doing business.

Threats: Increasing tax evasion especially in cash dominated segments impacts tax collection. Global economic slowdowns can reduce governments’ tax revenues.

Geographical regions
North America region accounts for the largest share in the global taxable retail market, primarily led by the US. Asia Pacific is the fastest growing region led by countries like India, China and Indonesia with expanding middle class population and taxable consumption.

Another fastest growing region for the taxable retail market is Latin America led by Brazil and Mexico. Urbanization, rising disposable incomes and developing organized retail infrastructure is supporting the market growth in this region over the forecast period.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it