The veterinary drugs compounding market involves the customization of medications for animals according to an individual veterinarian's prescription. Compounded veterinary drugs are generally used when an FDA-approved drug may not be suitable for certain pets or when a specific strength or dosage form is necessary. Common compounded medications include gels, transdermal products, flavored medications, implants, and sterile and non-sterile compounded medications. Compounded drugs are useful as they allow adjustments to be made to existing drugs to improve palatability or develop formulations suitable for unique animal conditions and species. The global veterinary drugs compounding market is highly fragmented with many local pharmacies providing such customized services along with large animal health companies.

The Global Veterinary Drugs Compounding Market Size is estimated to be valued at US$ 1512.63 Mn in 2024 and is expected to exhibit a CAGR of 6.5% over the forecast period 2024 to 2030.

Key Takeaways

Key players operating in the veterinary drugs compounding market are BASF SE, Huntsman Corporation, The Dow Chemical Company, 3M Company, DuPont, Aditya Birla Chemicals Ltd (Thailand), Momentive Specialty Chemicals Inc, Nan Ya Plastics Corporation, Kukdo Chemical Ltd., and NAMA Chemicals. These players are focusing on manufacturing novel excipients and new formulations for improving existing products.

The growing demand for compounding veterinary drugs can be attributed to the rise in pet healthcare expenditures and surge in pet adoption worldwide. According to recent data, over 85 million American families own at least 1 pet. Thus, the increase in pet ownership has been a major factor driving the demand for specialized drugs and compounding services.

With rising pet commerce and strong growth in the veterinary sector globally, many key compounding players are exploring opportunities to expand in international markets. For example, North America dominates currently due to favorable regulations and advanced animal healthcare infrastructure, while Asian countries like India and China are expected to witness high growth on account of increasing pet care awareness.

Market drivers

One of the key drivers for the veterinary drugs compounding market is the increasing cases of niche medication requirements in animals. Growing prevalence of chronic diseases in pets, requirement of specialized formulations for particular animal species or breeds and development of antibiotic-resistant pathogens have boosted the need for customized veterinary drugs. Further, rising pet obesity levels have necessitated newer drug delivery systems and flavors incorporated in compounded drugs to enable pet owners to effectively administer the medication. The unique benefits of compounded drugs over generic drugs in addressing such complex veterinary needs continue to drive the market growth significantly.

The current geopolitical situation is impacting the growth of the veterinary drugs compounding market. With rising conflicts and economic uncertainties around the world, cross-border trade and investment flows are experiencing more volatility. This indirectly affects the procurement of active pharmaceutical ingredients and other raw materials by compounding pharmacies. They are facing supply chain disruptions and price fluctuations of key inputs. As a result, production costs are rising for compounding pharmacies. This may constrain the expansion plans of some small and medium players in the near term.

To ensure steady growth in such a scenario, companies in the veterinary drugs compounding market need to diversify their sourcing networks. They must look for alternative suppliers in different geographic regions to reduce over-reliance on any single source. Collaboration with local ingredient producers can also help address input supply vulnerabilities. Market players also need to devise hedging strategies and maintain higher inventory levels of critical materials to offset raw material price volatility. Adopting a more decentralized manufacturing footprint and contract manufacturing partnerships can improve resilience.

Geographically, North America currently holds the leading share in the global veterinary drugs compounding market in terms of value. This is owing to the high rate of pet ownership and growing expendable incomes in countries like the US and Canada. Pet owners in the region also exhibit high willingness to spend on their animals. Europe stands as the second largest regional market supported by rising awareness about customized medication and established status of compounding pharmacies.

Asia Pacific is poised to witness the fastest growth in the veterinary drugs compounding market during the forecast period. Factors such as a growing middle class, increasing pet adoption supported by rising affluence, and ramping up of veterinary infrastructure will drive the regional market. In addition, expansion of multinational companies in Asia's pet care industry will also augment regional demand creation for compounded medications and help accelerate market growth.

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