The uptake of medication inventory management solutions is accelerating worldwide and the next several years are expected to see strong growth in this market. IHS Markit estimates the number of sites who have adopted this technology will grow from just under 5,000 in 2017 to over 7,000 in 2021. That said, there are substantial geographical differences both in the number of live sites as well as in the pace of adopting this technology. United States is leading the global market with just over 2900 live sites. The European market is substantially less penetrated, with stable gains expected over the next 4 years. Latin America and Asia remain attractive regions for future gains, however, budgeting constraints are currently slowing down the adoption of technology. IHS Markit estimates that the global market for medication inventory management robots was worth $203 million in 2017 and is expected to see 19.1% CAGR from 2017 to 2021. There are several drivers which will accelerate the adoption of this technology over the next 4 years, namely: 1) the need to reduce dispensing errors; 2) rising labour costs; 3) resolving stock issues:
Even though the instances of medication dispensing errors have been declining slowly over the past several decades, error rate still remains high. According to the U.S. Food and Drug Administration, medication errors cause at least one death every day and injure approximately 1.3 million people annually in the United States. The National Reporting and Learning System, a central database of patient safety incident reports in the NHS system (United Kingdom), found 525,186 incidents were reported between 2005 and 2010 in their review of medication error incidents. Of these, 86,821 (16%) reported actual patient harm, 822 (0.9%) resulted in death or severe harm. Among the most common factors causing these errors to occur is the human factor. As national health systems are becoming increasingly aware of this, regulations are being established to ensure that facilities adhere to medication controls, the thirst for purchasing medication dispensing robots is increasing. These robots largely eliminate the human error factor and are almost 100% accurate.
Rising labour costs
The labour costs are rising across the globe as can be seen from the graph below. Labour costs represent one of the highest expenses in any healthcare institution, pressing the management to increase efficiency and automate the processes as much as possible.This is driving the need for adopting an automated dispensing technology. Additionally, healthcare institutions as well as retail pharmacies are increasingly recognizing the need to free up the pharmacists’ time to increase patient facing time, and shift their focus towards more value adding activities with the patients. The adoption of medication dispensing solutions enables this.
Another benefit of using robotic solutions is the decrease of medication going out of date as the robots operate on the “first in first out” basis, thus decreasing the costs.
Who benefits the most?
There are three main categories of healthcare institutions which benefit the most from this technology. IHS Markit expects that these will be the ones driving the demand over the next 4 years, namely – large acute care hospitals with 200+ beds, dispensing hubs, in addition to retail pharmacies that dispense more than 10,000 prescriptions per month.
Additionally, there are regional variances in demand for various types of robots. The driving demand in China differ significantly from the United States and Europe, where preventing the dispensing errors and increasing efficiency are top priorities. In China, a very large volume of dispensing occurs within the dispensing hubs; the primary goal is to increase the speed of dispensing, so their focus is in purchasing only extremely high-speed dispensing robots.
There are several factors slowing down the adoption of technology. One is the cost of investment. As there are different sizes of the robots with prices ranging from $80,000 - $700,000 there is a solution to match varying needs; that said, the cost is nonetheless significant, and will remain an important barrier over the short term – especially in Latin America in addition to Asia (excluding Singapore, Japan and partially China). Penetration rate in Latin America and Asia remain very low. Another factor is the change management necessary as a result of switching from manual processes to the automated dispensing practice. It is rarely the case of simply installing a robot, it also requires managing expectations, staff training and having a new plan in place.
Insight posted by Dasha Lukiniha, Senior Consultant Medical Technology