Pharmacy Benefit Management Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Pharmacy Benefit Management Market is Segmented by Service (Specialty Pharmacy, Drug Formulatory Management, Benefit Plan Design and Consultation and Other Services), by Business Model (Government Health Programs, Employer-Sponsored Programs and Health Insurance Management), by End User (Pharmacy Benefit Management Organization, Mail Order Pharmacies, Retail Pharmacies and Other End Users), and Geography (North America, Europe, Asia-Pacific, Middle-East and Africa and South America). The report offers the value (in USD million) for the above segments.

Market Snapshot

Market Snapshot
Study Period: 2019-2027
Base Year: 2021
Fastest Growing Market: Asia-Pacific
Largest Market: North America
CAGR: >5.1 %

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Market Overview

The pharmacy benefit management market is expected to register a CAGR of nearly 5.1% over the forecast period, (2022- 2027).

The COVID-19 pandemic is an unprecedented health issue and has significantly impacted the pharmacy benefit management market. According to a March 2020 update, the Pharmaceutical Care Management Association (PCMA) issued a letter to the Trump Administration's COVID-19 Task Force confirming the preparedness of pharmacy benefit managers (PBMs) to address the COVID-19 outbreak. PCMA is focused on supporting public health authorities, working with health care providers and paramedics, and government programs to ensure that patients receive the treatment they need at an affordable cost. In addition, several market players such as OptumRx, Inc., and Cigna, reported significant revenue growth. For example, OptumRx saw a 17.8% increase in 2020 and a 4.4% increase in 2021 compared to 2019. Thus, the COVID-19 pandemic has positively affected the growth of the market.

The major factors driving the growth of the market are increasing preference for pharmacy benefit management (PBMS), increasing healthcare expenditure as well as increasing demand for prescription drugs.

Rising inclination towards pharmacy benefits management is contributing to the growth of the market. For example, according to a March 2022 update from the Pharmaceutical Care Management Association (PCMA), the Pharmaceutical Care Management Association (PCMA) announced that Elixir, Rite Aid's pharmacy benefit manager (PBM), is joining the trade association. The addition of Elixir to PCMA demonstrates how dynamic the PBM industry has become and represents a commitment to PCMA's work on behalf of patients to improve access to affordable prescription drugs. In addition, Emsana Health aims to serve as an innovation studio in October 2021 to develop new products and solutions designed with input from PBGH employer members.

Additionally, in October 2021, a nonprofit coalition of nearly 40 companies, including the United States retailers Walmart and Costco, launched a new firm that would offer pharmacy benefit management (PBM) services to employers. Additionally, in October 2021, Mark Cuban's new generic company announced the launch of its own pharmacy benefit management company. Thus, such developments indicate that there is an increasing use of pharmacy benefit management services, which contributes to the growth of the market.

However, reluctance to adopt pharmacy automation systems and stringent regulatory procedures are the factors hindering the market growth.

Scope of the Report

As per the scope of the report, the pharmacy benefit management market plays a significant role in the healthcare industry and uniquely administers the pharmacy product and focuses on real-time interaction. Pharmacy benefit managers (PBMs) are companies that manage prescription drug benefits on behalf of health insurers, Medicare Part D drug plans, large employers, and other payers. The pharmacy benefit management market is segmented by Service (Specialty Pharmacy, Drug Formulatory Management, Benefit Plan Design and Consultation, and Other Services), by Business Model (Government Health Programs, Employer-Sponsored Programs, and Health Insurance Management), by End User (Pharmacy Benefit Management Organization, Mail Order Pharmacies, Retail Pharmacies, and Other End Users), and Geography (North America, Europe, Asia-Pacific, Middle-East and Africa and South America). The market report also covers the estimated market sizes and trends for 17 different countries across major regions, globally. The report offers the value (in USD million) for the above segments.

By Service
Specialty Pharmacy
Drug Formulatory Management
Benefit Plan Design and Consultation
Other Services
By Business Model
Government Health Programs
Employer-Sponsored Programs
Health Insurance Management
By End User
Pharmacy Benefit Management Organization
Mail Order Pharmacies
Retail Pharmacies
Other End Users
Geography
North America
United States
Canada
Mexico
Europe
Germany
United Kingdom
France
Italy
Spain
Rest of Europe
Asia-Pacific
China
Japan
India
Australia
South Korea
Rest of Asia-Pacific
Middle East and Africa
GCC
South Africa
Rest of Middle East and Africa
South America
Brazil
Argentina
Rest of South America

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Key Market Trends

Specialty Pharmacy Segment is Expected to Witness Growth Over the Forecast Period

Based on service type, the specialty pharmacy segment is expected to hold a significant market share. Specialty pharmacies provide drugs to treat rare or complex medical conditions and are designed to efficiently supply drugs with special handling, storage and distribution requirements with standardized processes.

Several market players are involved in implementing strategic initiatives thereby contributing to the growth of the market. For example, in February 2021, Navitus Health Solutions, a full-service pharmacy benefit manager (PBM), announced that Lumicera Health Services, its wholly-owned specialty pharmacy, purchased a specialty pharmacy from CareMetx, a leading technology center. the service company is committed to improving patient access to specialty drugs. Based in Gaithersburg, Maryland, CareMetx Health's specialty pharmacy will enable Lumicera to better serve patients in the eastern United States. In addition, in February 2022, Southern Scripts, one of the leading pharmacy benefit managers (PBMs), highly regarded for its transparent pricing, launched RxCompass, a new solution designed to support companies in the United States and their employees in reducing the high costs of specialty medicines.

Thus, due to the above-mentioned factors, the segment is expected to witness a significant growth over the forecast period.

1

North America is is Expected to Dominate the Pharmacy Benefit Management Market

North America is expected to dominate the overall pharmacy benefit management market throughout the forecast period. The major factors driving the growth of the market are the increasing number of medication errors, increasing adoption of pharmacy benefit management, and rising healthcare expenditure. For example, about 7,000 to 9,000 people die each year in the United States due to medication errors, according to a study titled “Medication Errors and Prevention” released by the National Library of Medicine in July 2022. The report also stated that the total patient care costs associated with medication errors are more than USD 40.0 billion annually, and approximately 7.0 million patients are affected by medication errors annually. Thus, rising incidents of medication errors are expected to increase the demand for pharmacy dose management services, thus boosting market growth.

Several players in the market are involved in implementing strategic initiatives thereby fueling the growth of the market. For example, in July 2021, major insurers Anthem and Humana announced they were partnering with software solutions company SS&C to create a new pharmacy benefit management (PBM) platform. Additionally, according to an August 2021 update from the Securities and Insurance Commissioner of Mehtontana State Auditor (CSIMT), more than 100 bills targeting pharmacy benefit managers were introduced in the United States in 2021, after the three largest pharmacy benefit managers handled roughly 77, 0% of all prescription requests in the United States in 2020.

Thus, owing to the above-mentioned developments, the market in North America is expected to witness a significant growth over the forecast period.

Pharmacy Benefit Management Market Growth

Competitive Landscape

The pharmacy benefit management market is competitive with the presence of several global and international market players. The key players are adopting different growth strategies to enhance their market presence, such as partnerships, agreements, collaborations, new product launches, geographical expansions, mergers, and acquisitions. The competitive landscape includes an analysis of a few international as well as local companies which hold the market shares and are well known including CVS Health, Optum, SS&C Tecnologies, Inc., Elixir Rx Solutions, LLC and Centene Corporation (Envolve Health) among others.

Recent Development

  • In April 2022, Southern Scripts, one of the leading pharmaceutical benefit managers (PBMs), highly regarded for its transparent pricing, has launched RxCompass, a new solution designed to support the United States companies and their employees by reducing the high cost of specialty drugs.
  • In March 2022, pharmacy benefits manager ProdigyRx launched its business operations. ProdigyRx offers PBM services and clinical solutions for workers' compensation insurers, third-party administrators, and self-insured/administered employers.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Market Drivers

      1. 4.2.1 Rising Inclination Towards Pharmacy Benefit Management System (PBMS)

      2. 4.2.2 Increasing Health Expenditure

      3. 4.2.3 Growing Demand for Prescription Products

    3. 4.3 Market Restraints

      1. 4.3.1 Reluctance To Adopt Pharmacy Automation Systems and Stringent Regulatory Procedures on Confidentiality

    4. 4.4 Porter's Five Forces Analysis

      1. 4.4.1 Threat of New Entrants

      2. 4.4.2 Bargaining Power of Buyers/Consumers

      3. 4.4.3 Bargaining Power of Suppliers

      4. 4.4.4 Threat of Substitute Products

      5. 4.4.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION (Market Size by Value - USD million)

    1. 5.1 By Service

      1. 5.1.1 Specialty Pharmacy

      2. 5.1.2 Drug Formulatory Management

      3. 5.1.3 Benefit Plan Design and Consultation

      4. 5.1.4 Other Services

    2. 5.2 By Business Model

      1. 5.2.1 Government Health Programs

      2. 5.2.2 Employer-Sponsored Programs

      3. 5.2.3 Health Insurance Management

    3. 5.3 By End User

      1. 5.3.1 Pharmacy Benefit Management Organization

      2. 5.3.2 Mail Order Pharmacies

      3. 5.3.3 Retail Pharmacies

      4. 5.3.4 Other End Users

    4. 5.4 Geography

      1. 5.4.1 North America

        1. 5.4.1.1 United States

        2. 5.4.1.2 Canada

        3. 5.4.1.3 Mexico

      2. 5.4.2 Europe

        1. 5.4.2.1 Germany

        2. 5.4.2.2 United Kingdom

        3. 5.4.2.3 France

        4. 5.4.2.4 Italy

        5. 5.4.2.5 Spain

        6. 5.4.2.6 Rest of Europe

      3. 5.4.3 Asia-Pacific

        1. 5.4.3.1 China

        2. 5.4.3.2 Japan

        3. 5.4.3.3 India

        4. 5.4.3.4 Australia

        5. 5.4.3.5 South Korea

        6. 5.4.3.6 Rest of Asia-Pacific

      4. 5.4.4 Middle East and Africa

        1. 5.4.4.1 GCC

        2. 5.4.4.2 South Africa

        3. 5.4.4.3 Rest of Middle East and Africa

      5. 5.4.5 South America

        1. 5.4.5.1 Brazil

        2. 5.4.5.2 Argentina

        3. 5.4.5.3 Rest of South America

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Company Profiles

      1. 6.1.1 Optum, Inc.

      2. 6.1.2 Centene Corporation (Envolve Health)

      3. 6.1.3 CVS Health

      4. 6.1.4 SS&C Technologies, Inc.

      5. 6.1.5 Anthem, Inc.

      6. 6.1.6 Elixir Rx Solutions, LLC

      7. 6.1.7 Express Scripts Holding Company

      8. 6.1.8 Benecard Services, LLC

      9. 6.1.9 CaptureRx

      10. 6.1.10 Change Healthcare

      11. 6.1.11 Abarca Health

      12. 6.1.12 MedImpact

      13. 6.1.13 ProCare Rx

      14. 6.1.14 Option Care Health Inc.

      15. 6.1.15 Cigna

    2. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

Competitive Landscape Covers - Business Overview, Financials, Products and Strategies, and Recent Developments

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Frequently Asked Questions

The Global Pharmacy Benefit Management Market market is studied from 2019 - 2027.

The Global Pharmacy Benefit Management Market is growing at a CAGR of >5.1% over the next 5 years.

Asia-Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2021.

Optum, CVS Health, SS&C Technologies, Inc., Elixir Rx Solutions, LLC, Anthem, Inc. are the major companies operating in Global Pharmacy Benefit Management Market.

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