Consumer health: Exploring market opportunities and challenges

In recent years, growing consumer willingness to manage their own health, coupled with increasing empowerment and opportunity, has rapidly transformed the consumer health industry. Our Future of Diagnostics report highlighted how the rise of patient consumerisation in Europe has transformed the diagnostic testing landscape, with direct-to-consumer (DTC) testing increasing five-fold from the start of the pandemic and clinicians across Europe seeing patients increasingly engaged with their health. Furthermore, 41 per cent of the public say COVID-19 has changed their attitude to the way they access healthcare services and 31 per cent of people who would not have visited a pharmacy for advice before COVID-19 are more likely to now, according to research conducted by PAGB.¹ As an introduction to our upcoming research series focused on the consumer health industry, this week’s blog provides an overview of the current market landscape, including key opportunities and challenges for the future.

Defining consumer health

The consumer health industry is an important contributor to the sustainability of global healthcare systems in addition to improving individual health outcomes and access to care. It is estimated that global healthcare systems currently save $120 billion annually as a result of increasing self-care practices, and is projected to rise to $180 billion if the potential of this industry continues to be realised.²

Although recognised as a growing industry of increasing importance, definitions of ‘consumer health’ vary. Broadly, it refers to the decisions and actions that individuals take regarding their health and wellbeing. Increasingly it has become synonymous with ‘self-care’; the conscious and choiceful practice of consumers using or taking a directly accessible product or service they perceive will improve or maintain their health and wellbeing. Crucially, consumer health and self-care ‘empowers individuals to look after their own health efficiently and conveniently, in collaboration with health and social care professionals as needed’.³

The industry therefore encompasses a broad spectrum of products, sold via a range of channels, aiming to benefit the wellbeing of diverse demographics of individuals. Further, global variations in regulation, healthcare access and consumer attitudes mean that the consumer health industry has varying maturity and market composition between geographies. To help understand and navigate this market, Figure 1 provides examples of a number of dimensions that can be used to segment consumer health.

Figure 1. Consumer health can be viewed from various dimensions that help to navigate its complex landscape

Source: Deloitte analysis

Consumer health is a fragmented but rapidly growing industry

Currently valued at $228 billion, the global consumer health market is predicted to increase at a CAGR of 7.2 per cent to reach $323 billion over the next five years.⁴ This overall growth is fuelled by trends such as:

• the prescription to over the counter (Rx to OTC) drugs switch - increasing demand for and availability of OTC drugs is driving this market segment at an estimated CAGR of 5.6 per cent over the next ten years⁵
• consumers increasingly investing in dietary supplements, vitamins and minerals as a way of increasing immunity and maintaining a healthy lifestyle - in 2022, 1.3 billion packs of vitamins and minerals were bought by consumers in Europe alone⁶
• the global digital health market is expected to grow at a CAGR of over 27 per cent from 2022 to 2030, to reach $1.5 trillion in 2030.⁷ Many digital health technologies are sold direct to the consumer and over 40 per cent of adults now have access to a wearable device capable of measuring at least one health parameter.⁸

The consumer health industry is currently very fragmented, with no single company dominating. Indeed, the top ten players currently hold a 27 per cent share of the market, with the largest player holding just six per cent.⁹ The rise in demand for consumer health and lack of dominating market players has been met with a shift in business models for several large pharmaceutical companies, who have spun-out their consumer health divisions to cater to the changing needs of the consumer. This separation strategy is increasingly being considered by large corporate players due to it enabling a greater flexibility of focus, the ability to adapt to emerging wellness trends and the opportunity to directly target consumers and retailers.¹⁰

The future of health is consumer-driven and prevention-focused

The industry will continue to undergo significant transformation, driven by a shift in focus from reactive ‘symptom’-based models to proactive prevention. This presents an opportunity to deliver an end-to-end consumer journey from preventative healthy living to early diagnosis, treatment and long-term condition management.

Despite the opportunities presented, many challenges remain to ensuring this pandemic-era self-care momentum is maintained. A November 2022 report by the UK consumer healthcare industry association PAGB found that the number of individuals considering self-care as their first option had declined from 69 per cent in 2021 to 64 per cent in 2022.¹¹ Furthermore, a recent survey of UK adults by the NHS Confederation and Google Health found that although 97 per cent of individuals consider themselves responsible for their health and wellbeing, and 83 per cent currently use technology for their health management, many respondents felt they lacked the confidence, tools and technologies to take control of their health as much as they would like.¹²

Companies, in partnership with policymakers and healthcare systems, have an important role to play in supporting consumers to make confident and informed decisions about their health. The ‘Self-Care Readiness Index’ (SCRI) highlights a ‘widespread lack of a coherent view of self-care and its benefits’.¹³ The initiative recognises four crucial enablers of self-care that markets must address to ensure maximised benefit:

• stakeholder support and adoption, centred around trust from consumers and healthcare providers
• consumer and patient empowerment, including health literacy and access to personal health data
• self-care health policy, recognising the economic value of self-care through reimbursement and incentivisation for example
• regulatory environment, including approval of Rx-to-OTC switches, advertising and pricing.

Intrinsically linking these enablers is the core concept of trust. Consumer trust in consumer health industry players will be central to their attitudes and purchasing decisions as the industry evolves. Who, what, where and how consumers are influenced will increasingly be based on trusted evidence, with professionals playing a central role in decision making, and regulation evolving to safeguard consumers.

Conclusions

Empowered consumers are increasingly seeking holistic, personalised health solutions that are convenient, transparent and affordable. As the consumer health industry continues to grow and evolve, market players are presented with many opportunities but also many challenges. Fundamentally, companies will need to understand what the health and wellbeing needs of their consumers are, how consumers want to access services and how to ensure access is equitable. In our upcoming consumer health research series we will continue to explore how companies can grow and maintain market share in this highly competitive market, by adapting business and operating models to build trust, engagement and relationships with consumers.