AI in pharma market set for explosive growth: Report

The global Artificial Intelligence (AI) in pharma market reached a value of nearly $699.3 million in 2020, having increased at a Compound Annual Growth Rate (CAGR) of 31.8 per cent since 2015, according to the recent report from The Business Research Company. The market is expected to grow from $699.3 million in 2020 to $2,895.5 million in 2025 and reach $9,142.7 million in 2030. The market’s growth comes from increased healthcare expenditure, strong economic expansion in emerging markets and government initiatives in developing economies. Going forward, the growing adoption of AI for clinical trials, increasing use of AI for tracking medication adherence, and COVID-19 will drive the market’s growth. Factors that could hinder the growth of the market in the future include incompatible legacy health IT infrastructure.

The COVID-19 pandemic has accelerated digital transformation across the industry. With the emergence of big datasets, combined with innovation in robotics, sensors and computational power, there is an increasing challenge of identifying hidden patterns and taking decisions to counter the post-pandemic effects, which increases demand for AI in healthcare. The use of AI in pharma allows for higher productivity, improved efficiency and faster production of life-saving drugs.

The AI in pharma market is segmented by technology into four groups: context-aware processing, natural language processing, querying method and deep learning. Deep learning was the largest segment of the AI in pharma market segmented by technology, accounting for 33.2 per cent of the total in 2020. Going forward, the querying method segment is expected to be the fastest-growing segment in the AI in pharma market segmented by technology, at a CAGR of 32.74 per cent during 2020-2025.

The AI in pharma market is also segmented by drug type into small molecules and large molecules. The small molecules market was the largest segment of the AI in pharma market segmented by drug type, accounting for 65.4 per cent of the total in 2020. Going forward, the large molecules segment is expected to be the fastest-growing segment in the AI in pharma market segmented by drug type, at a CAGR of 36.3 per cent during 2020-2025. This is due to the growing importance of biological treatments within pharma and their great complexity, making them an ideal subject for AI research and development techniques.

The AI in pharma market is also segmented by area of application into diagnosis, clinical trial research, drug discovery, research and development and epidemic prediction. Drug discovery was the largest segment of the AI in pharma market segmented by application, accounting for 80.4 per cent of the total in 2020. Going forward, the clinical trial research segment is expected to be the fastest-growing segment in the AI in pharma market segmented by application, at a CAGR of 37.8 per cent during 2020-2025.

North America was the largest region in the AI in pharma market, accounting for 43.2 per cent of the total in 2020. It was followed by Western Europe, Asia-Pacific and then the other regions. Going forward, the fastest growing regions in the AI in pharma market will be South America and Asia Pacific where growth will be at CAGRs of 42.7 per cent and 38.6 per cent, respectively during 2020-2025. These will be followed by Africa and Western Europe, where the markets are expected to register CAGRs of 35.77 per cent and 34.72 per cent, respectively during 2020-2025. The global AI in pharma market is fairly concentrated. The top 10 competitors in the market made up approximately 69.42 per cent of the total market in 2020. This is because of the challenges and expense of developing AI technologies, creating barriers to entry to the market. Major players in the market include IBM Watson Health, Alphabet Inc, Concreto HealthAI, Nvidia Corporation and PathAI.

The top opportunities in the AI in pharma market segmented by technology will arise in the deep learning segment, which will gain $721.5 million of global annual sales by 2025. The top opportunities in the AI in pharma market segmented by application will arise in the drug discovery segment, which will gain $1,710.0 million of global annual sales by 2025. The AI in pharma market size will grow the most in the USA, with an expected $665.1 million in sales.

Market trend-based strategies for the AI in pharma market include leveraging AI for clinical trials, AI offering diagnosis and precision medicine for rare diseases, AI for improving drug adherence to enhance product development, investments in AI-driven biotech firms, focus on acquiring smaller AI-based companies, investing in new AI-powered tools, partnership with CROs to become more efficient in their drug discovery processes and creating AI innovation labs.