Online Healthcare Market Looks Energized

According to research by Jupiter Communications, the online consumer healthcare market is expected to grow to $1.7 billion by 2003, despite regulatory hurdles, limited product offerings, and product and distribution complexities.

Jupiter also anticipates further marriages of online content providers and health-related commerce sites in the future, because more money is available in the commerce arena than in advertising.

Jupiter’s research divides the consumer online health industry into four segments, prescription pharmaceuticals; over-the-counter (OTC) drugs; nutraceuticals, (i.e., vitamins, and herbal supplements); and personal care products — and estimates that the total online/offline market for consumer health goods is expected to be $205.2 billion by 2003.

According to Jupiter, online prescription drug spending will reach $966 million by 2003, which is only 0.6 percent of the total retail prescription drug market. But Jupiter also found that the overall prescription drug market is so vast, that even a small channel shift to online purchasing creates a substantial market.

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In the OTC market, Jupiter projects consumers will spend $314 million by 2003, which represents a compound annual growth rate of 215.8 percent. Without institutional barriers, Jupiter expects the channel shift to online buying for this portion of the market to be higher than for offline buying.

The online nutraceutical market will reach $434 million by 2003, up from $1 million in 1998. Repeat purchases will drive online buying for this channel, according to Jupiter.

Traditional brick-and-mortar retailers experience roughly a 50/50 split between the back-end pharmacy and front-end products, according to Jupiter. But online drugstores will have to put extra emphasis on personal care items while the issues surrounding selling prescriptions over the Internet are worked out. The online personal care market will grow from $8 million in 1998 to $706 million by 2003, with a compounded growth rate of 145 percent.

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