Animal Health Market Trends

Growth Drivers

• Rising government spending on zoonotic disease prevention: Governments are prioritizing more on the animal health as a frontline defense against the zoonotic diseases that threaten public health and economic stability. The World Organization for Animal Health report in April 2024 states that nearly 75% of the infectious human diseases have animal origin, prompting sustained public investment in surveillance and control systems. In the U.S., the USDA 2023 data shows that nearly USD 384 million is allocated for animal health inspection service, with a significant portion directed toward veterinary biologics, veterinary diagnostics, zoonotic disease management, and more. Similarly, the European Commission has increased the funding under its EU4Health and Horizon Europe programs to strengthen the cross-border animal disease monitoring.

Animal Health Inspection Service (millions of dollars)

Source: USDA 2023

• Expansion of livestock production: Food security policies are driving the livestock expansion mainly in Asia and Africa, increasing the demand for preventive and therapeutic animal health solutions. The FAO data in June 2023 shows that the global meat production reached 364 million tons, and the milk production reached 944 million tons, largely supported by the productivity-focused government programs. India’s Department of Animal Husbandry and Diarying continue to scale national livestock health schemes under the Rashtriya Gokul Mission, while China’s Ministry of Agriculture emphasizes disease control to stabilize pork supply following African swine fever disruptions. Further, the global market is expected to grow and is driven by government-backed livestock productivity initiatives across Asia and Europe.
• Increased budget allocation for veterinary public health infrastructure: Governments are investing in veterinary laboratories, diagnostic networks, and field services to improve the outbreak response times. The Health for Animals in April 2023 report indicates that the livestock disease losses represent the production loss of USD 358.4 billion. Further, the multilateral programs such as the Global Animal Health Security initiative support national lab capacity building across Africa and Southeast Asia. The U.S. USDA’s National Animal Health Laboratory Network continues to receive federal funding to expand the real-time diagnostic coverage. These investments create sustained institutional demand for testing kits, reference reagents, and laboratory services, benefiting suppliers aligned with government procurement cycles rather than discretionary private spending.

Challenges

• High R&D costs and lengthy timelines:  Developing a new animal health product requires immense capital and patience. The journey from discovery to commercial launch might take a decade and exceed millions. This creates a significant barrier in the animal health market, mainly for the smaller firms. The top players in the market exemplify managing this via scale, investing some amount in R&D to sustain a robust pipeline. Smaller biotechs often partner with the major players and focus on niche indications to share the burden and risks.
• Relationship barrier in sales & marketing: In key segments, vets are the primary prescribers and influencers. Established players have deep, long-term relationships built via technical support, education, and direct sales teams. The newcomers in the market initially struggled with the commercial uptake of novel pet therapeutics despite FDA approval, partly due to limited vet channel penetration, demonstrating that a great product is not enough without commercial reach.