Key drivers of pharmaceutical sales in OECD countries

Background: The pharmaceutical industry is constantly evolving, and the increasing growth in pharmaceutical sales has multiple economic and sociological implications. Namely, it has been a long time since prescription drugs accounted for the majority of sales in the pharmaceutical industry, which makes this industry interesting from both investor and regulatory policy perspective. Purpose: This paper aims to analyse the determinants of pharmaceutical sales at the county level in order to identify fertile markets. A deeper insight into the issue could help managers in this growing industry to discover fruitful markets and policy makers to adjust their policies and regulations for the (online) sale of pharmaceuticals. Study design/methodology/approach: The empirical part of the paper is based on a panel data analysis conducted for 31 OECD countries in the period from 2010 to 2022. The data was extracted from the OECD Data Explorer database and processed with Stata 13.1. Furthermore, pooled ordinary least squares models, fixed effect model and random effect model were formed, with pharmaceutical sales per person as the dependent variable. Findings/conclusions: The results show that GDP per capita, the proportion of the population aged 65 and over and the proportion of people who have purchased online in the last 12 months have a positive impact on pharmaceutical sales, while life expectancy and the proportion of people who perceived their health as good/very good do not appear to affect it. Only the results on the effect of employment level indicate a negative influence on pharmaceutical sales. Limitations/future research: Future analyses should provide a more detailed insight into pharmaceutical sales by expanding the sample, including additional explanatory variables and analysing the determinants of the different categories; i.e. an analysis of pharmaceutical consumption by different disease classes influenced by economic, sociological and medical reasons would be a fruitful future scientific path.