FMI's Latest Report | What Is The Status And Prospect Of The Drug Labeling Market?

FMI's latest report | What is the status and prospect of the drug labeling market?

According to a report by Future Market Insights (FMI), the healthcare and laboratory labels market will be valued at USD 9.2 billion in 2022. By 2030, this figure will rise to $13.5 billion, with a compound annual growth rate (CAGR) of 4.9% over the next eight years. While there may be challenges ahead with tightening pharmaceutical regulations and concerns over adjacent industries and supply chains, the pandemic, demographic shifts and advances in medical technology are likely to continue to drive this growth.

01

Changes brought about by the epidemic

The pandemic has caused a major shift in the way consumers interact with and relate to all products, especially all medicines. Increased awareness of disease transmission through contact with surfaces, especially at the start of the outbreak, before this was considered a low-risk route of transmission for SARS-CoV-2, drove the demand for contactless solutions across industries.

The possible impact of this, the FMI suggests, is the use of labels to support contactless healthcare, allowing the transfer of data between healthcare workers and patients while minimising contact and potential transmission of infection. This could mean changes, such as the way doctors and pharmacists label and prescribe medicines accordingly.

Consumers appear to have become more aware of digital integration through methods such as QR codes, which are used, for example, to "check in" on premises so that anyone exposed to the virus can be tracked and traced. However, as the rate of new coronavirus infections continues to rise, it has become more difficult to track, trace and record data, especially as the health care sector is under increasing pressure due to issues such as staffing shortages. In the future, the use of digital labels may help simplify interactions between healthcare professionals and patients.

In addition, lab labels have become a requirement for applications such as national coronavirus testing programs. As research into infectious diseases such as COVID-19 may also become an expanding field, FMI points to the importance of laboratory labels in helping the safety and efficacy of ongoing and future research. Behind these factors, the COVID-19 pandemic has boosted the growth of the market, and the demand for labels will remain high during the COVID-19 pandemic.

02

Drivers of population growth

Medical labeling is already a mature and essential industry. Labels support patients in many ways—for example, understanding how to use, store or maintain medical equipment or medications safely. FMI added that patients need to understand the risks and benefits of medical assistance in a way they can understand, and labelling is a key part of enabling this communication.

As such, the main driver of the industry's growth appears to be guided by changes in the healthcare industry and the way patients are treated. The increasing use of complex medical devices and treatments in the home, supported by the R&D of new and updated technologies by competitive pharmaceutical companies, will obviously make safe and effective medical labeling even more important.

Importantly, the medical industry is experimenting with new devices and drugs at scale in multiple locations around the world. It will also drive up demand for healthcare and laboratory labels, as companies need to ensure they provide relevant information during production, storage, shipping and distribution. Labels also need to be printed in multiple languages to ensure clear, localized communication, again adding to demand, FMI said.

There are some major demographic changes taking place that are changing the way people interact with their country's healthcare system, again having a knock-on effect on labels. As the population of many countries ages, the demand for healthcare is likely to increase, driving the demand for healthcare labels. A recent study by the University of Waterloo in Ontario, Canada found that older adults are willing to use smart packaging, which may include RFID or NFC tags, if it is easy to use, consistent and inexpensive.

As for millennials, FMI claims this generation prioritizes healthcare labels. This group is said to be more likely to research products before making a buying decision and will gravitate towards brands that are transparent about environmental and social issues. FMI says healthcare labeling is important for communicating brand authenticity to millennial consumers and providing an enhanced flow of information, such as a supporting app for labeling solutions.

Millennials are also interested in healthcare solutions that promote healthy lifestyles, such as nutraceuticals. Again, this seems to require brands to ensure clear and transparent labelling to appeal to this demographic and the growth potential it offers. It seems that brands are taking notice; Berocca, for example, recently received a redesign of Free the Birds aimed at making its scientific aspects more accessible to consumers.

03

Development of the industry and its materials

In terms of material composition for healthcare labels, FMI predicts that paper labels will remain the most popular material type. Paper labels are reported to be readily available and affordable, accounting for nearly 65% of the medical label market value. Polyolefin-based labels are expected to generate an incremental opportunity of $1.45 million between 2022 and 2030. Such labels attribute this to the strong adhesive properties of polyolefin-based labels, which are especially important for growing segments such as nutraceuticals.

In terms of regional distribution, North America is expected to remain the dominant market for healthcare labels. The region is said to account for nearly 30% of the healthcare label market share, which FMI attributes to its emphasis on safety in the healthcare and pharmaceutical industries, such as stringent FDA regulations.

East Asia is the second largest market for healthcare labels. According to FMI, the region "shows significant growth potential" as healthcare spending increases, likely due to its population growth and the popularity of so-called wellness tourism in places like India, China, Malaysia and Thailand. At the same time, the healthcare label industry can also achieve a similar expansion in South Asia at a CAGR of 7.5%.

FMI also identified Europe as a region likely to experience significant market expansion in healthcare labeling. In Europe, the UK, Belgium, Denmark, Italy, Germany and France are clearly leading the way in terms of demand. In the region, FMI expects demand for advanced pharmaceuticals and nutraceuticals to drive research and development of product and labeling opportunities. FMI expects the clinical research market to expand in NAFTA countries as well. The healthcare and laboratory labeling market is a fragmented one. Major players in the market are focusing on expanding their research globally, diversifying their product portfolio, and rapid product development to gain a competitive advantage.

04

future challenges

The healthcare and laboratory labeling markets are not without challenges. Labeling companies must consider location-specific regulations, which means that labels may have to be changed depending on the region where the product is sold, which increases operating costs and time. Legal conundrums have drawn attention to medical devices and diagnostic products to be sold in EU and non-EU countries. The space on the label is limited and needs to contain a lot of information. The translation may need to be technically accurate, but most of the time it is literal. The issue is also likely to be compounded by Brexit, which has created many difficulties in various packaging sectors due to a lack of clarity on import and export regulations and pricing issues.

The ever-changing needs of end-users are also complicating the material composition, size and printing of medical labels. Some medical labeling companies seem to see this as a constraint because it makes operations unpredictable. There are emerging solutions to these challenges. For example, Schreiner MediPharm recently announced a Freeze-lock cryogenic label with an interlocking layer solution that enhances its bond strength to deep-frozen pharmaceutical containers. The company offers labels with expandable booklets to leave room for more information, which obviously makes these solutions especially suitable for clinical trials in different regions.

However, FINAT recently released a report on the European labeling industry, which indicated that shortages of raw materials, tight supply chains and ongoing strikes could dampen the increased demand for the labeling market. In addition, the war in Ukraine could further disrupt the supply of materials such as wood and drive up energy prices in energy-intensive industries such as paper and plastics (the two main materials used in medical labels) that could account for a significant portion beat. That could mean typography will soon be unable to fulfill orders, with bottlenecks and label shortages likely to impact essential industries such as drug labelling in the weeks and months ahead, FINAT said.