Animal Therapeutics and Diagnostics Market Size & Share, Product Type (Vaccines, Pharmaceuticals, Feed Additives); Diagnostic Services, End User - Global Supply & Demand Analysis, Growth Forecasts, Statistical Report 2025-2037

Animal Therapeutics and Diagnostics Market Growth Drivers and Challenges:

Growth Drivers

• Government and personal spending on animal health: Medicare in the U.S. does not cover animal health totally, whereas government supports indirectly through USDA APHIS and NIH grants. The USDA has allocated over USD 315 million to diagnostic infrastructure, animal disease prevention, and surveillance systems in their Budget in 2023. Pet owners' direct spending on veterinary care increased to USD 410.2 per pet per year, a 16.5% rise over the past five years, as per the AVMA report.
• Patient pool and disease prevalence: North America and Europe have a huge population on pet animal, with the AVMA stating over 140.2 million dogs and cats in the U.S. further, in Europe, there is 27.4% increase in bacterial infections and veterinary-relevant parasitic in livestock between 2018 and 2025 especially in Germany, prompting expanded demand for diagnostics and anti-infectives EU Animal Health Reports. This increase in population of pet animals have enhanced the clinical caseload for veterinary doctors and also fueled the demand for advanced diagnostics and therapeutics. Furthermore, this rise has also led to the high expense per animal specially in preventive care and chronic disease management.

Historical Patient Growth Driving Market Expansion 

Over the past decade, the global animal therapeutics and diagnostics market has experienced growth and is shaped primarily by the rising companion animal ownership, intensification of commercial livestock operations, and increased awareness of zoonotic diseases. Markets in Japan, the U.S., and Germany have noted an increase in veterinary services and biologics spending for both food-producing and companion animals. Whereas in China and India, rising middle classes and state-led initiatives are taken to safeguard livestock health and boost ATD adoption. Meanwhile, other countries also show a steady rise in the agricultural sectors and animal welfare regulations.

Historical Patient Growth (2014-2024) in Key Markets

The market is actively growing, shaped by specific expansion models to align with the local regulatory frameworks, public health priorities, and supply chain logistics of every region. Manufacturers have implemented partnership-led, government-aligned, and localized manufacturing models to scale up their operations effectively. India partnered with regional agricultural co-operatives and veterinary hospitals and achieved a revenue growth of 12.3% from 2022 to 2024, supported by the programs under ICAR and DAHD. Whereas the U.S. manufacturers witnessed a revenue boost of 16.4% through the FDA’s MUMS program. Simultaneously, Australia’s livestock sector noted a 10.8% diagnostics-based revenue rise (2021–2023) via export rebates and vet tech alliances.

Challenges 

• Price regulation in high-income countries: Many developed markets in the EU have strict government imposed pricing on animal therapeutics and diagnostics products. As national health authority in Germany has enforced tighter reimbursement thresholds for diagnostics and vaccines used to control diseases in livestock. These pricing limitations have delayed the flexibility and launch of several ATD products and made the manufacturers struggle to meet the financial and regulatory criteria. These price caps reduced incentives for innovation and market entry, leading to slowed expansion in a market expected to grow steadily due to rising zoonotic threats.
• Delayed regulatory approval timelines: The regulatory approval is a long process and impacts the arrival of new ATD products to the market.  The Pharmaceuticals and Medical Devices Agency in Japan has made a strict and safe compliance regulation and has extended the approval timelines for vaccines of livestock to six months in 2022. This delay has slowed down the market and affected the revenue cycles of many manufacturers. The product made in this cycle was limited especially during the disease outbreaks.