Dermatology Deep Dive 1

Introduction: Why Dermatology?

Dermatology has long been recognized as one of the most attractive specialties in medicine, both from a clinical practice standpoint and an investment perspective. The specialty occupies a unique place at the intersection of routine medical treatments (e.g., skin checks), surgical oncology (e.g., Mohs surgery for skin cancer), and cosmetic procedures (e.g., Botox, fillers, laser-based therapies). This diversity in revenue streams—some reimbursed by insurance, others self-pay or partially covered by novel benefits—has led to robust and relatively recession-resistant demand. 

From an M&A perspective, dermatology consolidation was particularly hot in the 2018–2021 period, fuelled by low interest rates and a strong pipeline of private equity buyers. Although high interest rates and an increasingly wide valuation expectations gap over the past 12–18 months have moderated deal-making, the fundamentals—long patient wait times, diverse revenue, strong margins—remain intact. 

The purpose of this deep dive is to explore how the U.S. dermatology market is structured, what drives its growth, who the key players are, and how multiples have changed. We will also highlight the evolving subcategories within dermatology (general, Mohs, cosmetic) and incorporate first-hand insights from John Dickenson, Chief Development Officer at Phynet, one of the largest dermatology platforms in the country.

Listen to the full podcast interview with John on Spotify.

Executive Snapshot (2024-25)

In the United States, the aggregate dermatology market is estimated at $20–$25 billion (across all services).

Market Snapshot: A High-Demand, Low-Supply Specialty

Demand for dermatology services far outstrips supply for several reasons: