Encephalitis Drugs Market Outlook:
Encephalitis Drugs Market size was valued at USD 1.25 billion in 2024 and is projected to reach USD 2.85 billion by the end of 2037, rising at a CAGR of 6.8% during the forecast period, i.e., 2025-2037. In 2025, the industry size of encephalitis drugs is assessed at USD 1.34 billion.
The worldwide number of encephalitis patients remains significant, with almost 6.52 million. In Western countries, acute encephalitis cases reached 7.5 per 100,000 people yearly. Other than this, in tropical countries, annually, 6.2 cases occur per 100,000, and the most common is herpes simplex encephalitis. Additionally, Japanese encephalitis is prevailing in Southeast Asia, registering 68,500 cases yearly. The fatality rate for the encephalitis ranges from 21%-31%. In order to avoid long-term disabilities such as epilepsy and fatalities, vaccination and early treatment are imperative.
Additionally, the supply chain for the treatment of encephalitis includes the distribution and production of antiviral medication. The medication mainly includes ganciclovir and acyclovir, and associated medical devices. There has been a huge investment in research and development conducted by Encephalitis International in alliance with various health institutions to upgrade the treatment of encephalitis. Various governments are funding research initiatives and arranging yearly conferences to enable the exchange of knowledge among professionals. Additionally, organizations are collaborating with the World Health Organization and other healthcare bodies to develop a standard protocol for the treatment.
Encephalitis Drugs Market - Growth Drivers and Challenges
Growth Drivers
- Government spending on encephalitis drugs: Medicare Part B supplies limited coverage for encephalitis diseases, and the spending has increased with an average annual rate of 9.3% in 2021 from the last decade. In the year 2021, part B drug expenditure reached USD 33.2 billion, accounting for 27.8% of total Medicare drug spending. The growth in spending can be attributed to the introduction of the novel and high-cost drugs. The amount of expenditure is significant, with the topmost drugs accounting for 51% of the expenditure. These expenditures highlight the significant financial commitment by the government to making a well-structured treatment for patients.
- Biosimilar competition and cost saving: The advent of the biosimilar technique has made treatments more affordable and accessible. The original form of treatment is often exorbitant on the back of high research and development costs. The biosimilars are highly similar but less costly versions of the biologics, and further increased the competition. This compels the parent companies to lower the prices. For instance, in 2023, competition for biosimilar medicines in Medicare Part B reduced by 62.3% on various biologics. This helped in saving the beneficiaries almost USD 2000 on average. The widespread options for biosimilars for the treatment of encephalitis increase the accessibility and affordability.
- Healthcare quality improvement initiatives: There has been more spending on Medicare Part B drugs, showcasing an enhanced focus on upgrading the quality of healthcare. The rising spending on drugs administered by clinicians pushes treatments for better outcomes for patients, and can be administered in controlled settings. The World Health Organization has launched an initiative called encephalitis management protocols to lower the misdiagnosis and conduct timely treatment. Also, hospitals are adopting advanced testing options such as MRI scans and CSF analysis, leading to an increased rate of detection and demand for the drugs.
Challenges
- High cost of treatment limits the insurance coverage: In the U.S., the average cost of hospitalization for an adult is USD 15,580. Also, the cost for antimicrobial medication reached USD 1,145. These exorbitant costs often surpass the rates of reimbursement and limit the coverage and access to patients.
- Limited infrastructure for diagnostics: There is limited access to advanced diagnostic tools such as CSF PCR testing. The limited diagnostic facilities hamper the market by hindering the accurate identification of the diseases. In fact, in underdeveloped regions, misdiagnosis is also a prevalent issue.
Encephalitis Drugs Market Size and Forecast:
| Report Attribute | Details |
|---|---|
|
Base Year |
2024 |
|
Forecast Year |
2025-2037 |
|
CAGR |
6.8% |
|
Base Year Market Size (2024) |
USD 1.25 billion |
|
Forecast Year Market Size (2037) |
USD 2.85 billion |
|
Regional Scope |
|
Encephalitis Drugs Market Segmentation:
Disease Type Segment Analysis
The primary encephalitis is projected to hold 69.7% of the encephalitis drugs market share by 2037, owing to the rising prevalence of the infections. The surge in vector-borne diseases, due to the change in the climate, aggravates the cases. According to the World Health Organization in 2023, primary encephalitis accounts for 71% of the global cases, with 50,000 deaths per year. Other than this, primary encephalitis is considered to be 5 times more prevalent than other varieties. There is availability of targeted antiviral treatments, upgrading the management of the cases of primary encephalitis.
Treatment Type Segment Analysis
The antiviral agents’ segment is projected to garner 40.6% of the share by 2037 due to their efficiency in treating viral encephalitis diseases. Countries such as Japan and India include antivirals in national essential medicine lists for outbreaks of encephalitis. In India, the Indian Council of Medical Research (ICMR) tests remdesivir as a repurposed antiviral. The outbreaks in Japan for encephalitis cause 5000+ cases per year, fueling the demand for a wide range of anti-viral medicines such as favipiravir. Also, in the U.S., acyclovir antiviral, lowers the mortality for HSV encephalitis by 10-21%, fueling its adoption.
Our in-depth analysis of the global encephalitis drugs market includes the following segments:
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Segment |
Subsegment |
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Disease Type |
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Treatment Type |
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Administration |
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End user |
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Distribution Channel |
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Encephalitis Drugs Market - Regional Analysis
Asia Pacific Market Insights
The encephalitis drugs market in Asia Pacific is projected to register 35.2% of the market share, garnering 6.7% of the CAGR during 2025-2037. The growth is propelled by burgeoning healthcare expenditure and upgraded surveillance for the disease across the region. Japan is pioneering the market with a staggering investment, infusing 12.4% of the healthcare budget in 2024, which is a USD 3.1 billion higher from 2022. In China, the National Medical Products Administration has permitted to use of novel 24 drugs, showcasing the commitment to lowering the severity of rare diseases such as encephalitis.
Similarly, in India, between 2015 to 2023, the government expenditure on the drugs for encephalitis grew by 18.2%, with almost 2.42 million patients getting adequate treatment. Additionally, in South Korea, the spending on pharmaceuticals is rising exponentially, with the Ministry of Health and Welfare making policies to upgrade the accessibility of the drug. Also, the market in Malaysia is experiencing remarkable growth on the back of increased healthcare spending. The region has increased awareness of the diseases which is also acting as a growth catalyzing factor.
North America Market Insights
The encephalitis drugs market in North America is anticipated to capture 28.4% of the market share by 2037, garnering a CAGR of 5.1% from 2025 to 2037. The growth of the market in the region is fueled by rising government funding and the presence of varied types of treatments. In the U.S., the market growth is propelled by federal funding to support research for the treatment of encephalitis. Additionally, there are rising policies for reimbursement and broader coverage of Medicaid spending on the drugs. For instance, there is a USD 2,010 cap on the costly drugs to enhance the affordability of the patient.
In Canada, the rising healthcare funding is bolstering the encephalitis drugs market growth owing to rising healthcare funding across territories. The government bodies, such as the Public Health Agency of Canada, have prioritized the treatment of encephalitis by infusing a plethora of resources to acknowledge the repercussions of the disease. These efforts highlight the commitment of the government to upgrade the care for encephalitis. The federal and provincial authorities have joined hands to make a comprehensive approach to handle the diseases across the country.
Key Encephalitis Drugs Market Players:
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
The competitive landscape of the encephalitis drugs market is rapidly evolving as established key players, pharmaceutical giants, and new entrants are investing in research and development. Key players in the market are focused on developing new technologies and products that cater to the stringent regulatory norms and consumer demand. These key players are adopting several strategies such as mergers and acquisitions, joint ventures, partnerships, and novel product launches to enhance their product base and strengthen their market position.
Top 15 Global Manufacturers in the Encephalitis Drugs Market
|
Company Name |
Country |
Market Share (2024) |
|
Sanofi Pasteur |
France |
25% |
|
Valneva SE |
France |
20% |
|
Pfizer Inc. |
USA |
10% |
|
Bharat Biotech |
India |
5% |
|
Chengdu Institute of Biological Products |
China |
4% |
|
Wuhan Institute of Biological Products |
China |
xx |
|
Lanzhou Institute of Biological Products |
China |
xx |
|
Chugai Pharmaceuticals |
Japan |
xx |
|
GlaxoSmithKline plc |
UK |
xx |
|
Merck & Co., Inc. |
USA |
xx |
|
F. Hoffmann-La Roche Ltd. |
Switzerland |
xx |
|
Novartis AG |
Switzerland |
xx |
|
Takeda Pharmaceutical Company Limited |
Japan |
xx |
|
Seqirus (Australia) Pty Ltd |
Australia |
xx |
|
Yisheng Bio |
China |
xx |
|
Tiantan Biological Products |
China |
xx |
|
Liaoning Chengda |
China |
xx |
|
Zhejiang Tianyuan Bio-Pharmaceutical |
China |
xx |
|
Lundbeck |
Denmark |
xx |
|
CSL Limited |
Australia |
xx |
Below are the areas covered for each company in the encephalitis drugs market:
Recent Developments
- In March 2024, GSK introduced Zovirax, which is an enhanced formulation of acyclovir with almost 30% faster blood-brain barrier. The company captured 18.2% of the U.S. antiviral encephalitis market in Q2 2024.
- In January 2024, Bharat Biotech launched JENVAC, an adjuvanted Japanese Encephalitis vaccine. It has 98% efficacy in the trials conducted in Phase 4, targeting India’s endemic region. The vaccine has been adopted by the country’s Universal Immunization Program, with 5 million doses.
- Report ID: 3436
- Published Date: Jun 19, 2025
- Report Format: PDF, PPT
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