Web Swallows Chunk of Prescription Sales
Online sales won't capture huge market share, but Web-influenced drug buys will have a bigger impact.
Any Internet user with an inbox full of spam knows that prescription drugs are readily available online, and Jupiter Research (a unit of this site’s corporate parent) estimates that pharmaceuticals will experience the fastest growth in online sales compared with other health categories, increasing from $3.2 billion in 2003 to $13.8 billion in 2007.
Still, online prescription drug sales will only account for 4 percent of the total market in 2007. This small share is likely attributed to the fact that those who would benefit most from lower-cost pharmaceuticals are also the groups least likely to have Internet access – seniors, low earners, and the uninsured.
The bigger impact will be seen in Web-influenced sales, where, driven primarily by online ordering and in-store pickup of prescriptions, the market will grow from $25.7 billion in sales in 2003 to $53.2 billion in 2007.
| Prescription Drug Spending (in billions) | |||
|---|---|---|---|
| Online Spending | Web-influenced Spending |
Percentage of U.S. Spending |
|
| 2003 | $3.2 | $25.7 | 12% |
| 2004 | $5.1 | $31.6 | 13% |
| 2005 | $7.4 | $38.3 | 15% |
| 2006 | $10.3 | $45.5 | 16% |
| 2007 | $13.8 | $53.2 | 17% |
| Source: Jupiter Research | |||
The numbers have already gone up over the last year. A September 2003 Wall Street Journal Online/Harris Interactive poll of more than 2,000 Americans revealed that 7 percent of respondents bought prescription drugs from another country – either by Internet, mail, or in person – compared to 5 percent in November 2002. Furthermore, 48 percent indicated that they would buy drugs from another country – up from 40 percent in late 2002.
While health, beauty and wellness retailers, such as Drugstore.com, Walgreens, Rite Aid, and CVS, are among the biggest traffic-getters in October 2003, according to Hitwise, a number of other sites primarily devoted to filling prescriptions – with some in other countries not actually requiring a prescription – rounded out the top 20 in the category that encompasses pharmacies, chemists and druggists.
| Top Pharmacy Sites Ranked by Visits, U.S. October 2003 |
|
|---|---|
| Retailer | Market Share |
| Drugstore.com | 15.21% |
| MedcoHealth.com | 13.19% |
| Walgreens.com | 11.38% |
| Rite Aid | 6.28% |
| CVS.com | 3.54% |
| Express Scripts Members | 3.12% |
| The Kroger Company | 2.47% |
| Express-Scripts.com | 2.35% |
| Canada Pharmacy | 2.30% |
| PrescriptionDrugs.com | 2.27% |
| Source: Hitwise | |
Hitwise’s profile of the average online pharmacy visitor is a female (58 percent), over the age of 55 (33 percent), who accesses the Internet from home (74 percent) where the annual household income is above $75,000 (37 percent). Further analysis from Hitwise indicates that California, Texas, New York, Florida, and Pennsylvania boast the highest number of pharmacy site visitors.
