Pharmacy Benefit Management Market Size
| Study Period | 2019 - 2029 |
| Market Size (2024) | USD 589.40 Billion |
| Market Size (2029) | USD 775.34 Billion |
| CAGR (2024 - 2029) | 5.64 % |
| Fastest Growing Market | Asia-Pacific |
| Largest Market | North America |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Pharmacy Benefit Management Market Analysis
The Pharmacy Benefit Management Market size is estimated at USD 589.40 billion in 2024, and is expected to reach USD 775.34 billion by 2029, growing at a CAGR of 5.64% during the forecast period (2024-2029).
- COVID-19 impacted the growth of the pharmacy benefit management market. According to an article published in Research in Social and Administrative Pharmacy, in January 2021, due to the rise in demand for different pharmaceuticals, especially prescription drugs such as metformin, omeprazole, and others, hospitals have faced difficulties in personnel, drug supply, and pharmaceutical care. Also, the companies providing a diversified array of pharmacy care services have reported a significant increase in their revenue.
- For instance, as per the 2021 Annual Report, the revenue of Optum Inc. from Optum RX (a full-service prescription drug benefit provide) with a broad network of retail chains and independent pharmacies) was USD 91,314 million in 2021, with an increase of 4%, as compared to USD 87,498 million in 2020. Thus, the adoption of PBM solutions may increase over the years due to the benefits observed during the pandemic.
- The rising inclination towards pharmacy benefits management increases the accuracy, improves the safety and efficiency of the pharmacy store as well as improves patient health outcomes. This is anticipated to fuel the market growth over the forecast period.
- For instance, in March 2022, Elixir, the pharmacy benefit manager (PBM) division of Rite Aid, revealed its membership in the Pharmaceutical Care Management Association (PCMA). The addition of Elixir to PCMA boosts patients' access to affordable prescription drugs. Thus, the growing demand for pharmacy benefit management services among drug manufacturers, retail pharmacies, and health insurance providers is expected to fuel the market growth over the forecast period.
- The increase in the number of persons utilizing insurance to deal with the rise in medical costs, such as paying for treatment, hospitalization, health check-up, and hospitalization charges. Additionally, PBM combines medical and pharmaceutical products to support end-to-end healthcare solutions that enable the insurers to have comprehensive information about the patients, which enables the insurers to offer patients effective programs. This is also expected to fuel the demand for pharmacy benefit management systems, hence bolstering market growth.
- Furthermore, the rising health spending across the globe is expected to increase the adoption of technologically advanced software and solutions to monitor the inventory and supply of drugs as well as provide affordable medications to patients. This is anticipated to augment the market growth over the forecast period. For instance, according to the 2021 data published by the Centers for Medicare and Medicaid Services, the National Health Service increased by 2.7% to USD 4.3 trillion in 2021 (USD 12,914 per person), which accounted for 18.3% of GDP. In addition, as per the same source, private health insurance spending increased by 5.8% to USD 1,211.4 billion in 2021, and prescription drug spending increased by 7.8% to USD 378 billion in 2021.
- Moreover, the rising company activities in developing advanced software and solutions are also contributing to market growth. For instance, in February 2022, Optum launched Optum Specialty Fusion, a specialty medication management solution, to simplify care for patients with complex conditions and lower the cost of expensive specialty drugs. Specialized Fusion offers payers and providers of healthcare real-time insight into the most efficient specialty treatments at the patient's lowest cost by utilizing Optum's data and clinical experience. Therefore, owing to the factors such as growing health expenditure and increasing demand for prescription drugs, the studied market is expected to grow over the forecast period. However, the reluctance to adopt pharmacy automation systems and stringent regulatory processes on confidentiality are likely to hinder the growth of the pharmacy benefit management market over the forecast period.
Pharmacy Benefit Management Market Trends
Specialty Pharmacy Segment is Expected to Witness Significant Growth Over the Forecast Period
- Specialty pharmacies provide drugs to treat rare or complex medical conditions, such as multiple trauma, head injuries, severe burns, and others. They are designed to efficiently supply drugs with special handling, storage, and distribution requirements with standardized processes. These medications are usually high-cost products used to treat complex diseases. The specialty pharmacy segment is expected to witness significant growth in the pharmacy benefit management market over the forecast period owing to the factors such as the growing demand for prescription drugs owing to the rising burden of chronic diseases and the increasing company activities.
- The growing company's activities in developing specialty pharmacy software and solutions are expected to increase segment growth over the forecast period. For instance, in April 2022, Southern Scripts launched RxCompass, a new solution designed to support United States companies and their employees in mitigating the high costs of specialty medications. Southern Scripts uses its PBM expertise and industry network to create the first member-centric pharmacy navigation solution that can lead members through a step-by-step process to choose the specialty drug management program that best addresses their unique needs at the most affordable price.
- Also, in March 2022, VPL launched TrajectRx, a clinically minded specialty pharmacy software built for pharmacists by pharmacists.TrajectRx clarifies the fulfillment process from the pharmacy to the point of patient care and aids in extending the continuity of patient care, providing compliance with payors and accrediting authorities, and ensuring medications are delivered cost-effectively and securely. Therefore, owing to the aforementioned factors, the studied market is anticipated to grow over the forecast period.
North America is Expected to Have the Significant Market Share Over the Forecast Period
- North America is anticipated to witness significant growth in the pharmacy benefit management market over the forecast period owing to the factors such as the increasing number of medication errors, increasing adoption of pharmacy benefit management, and rising healthcare expenditure.
- According to an article published in Oxford University Press in July 2022, it has been observed that overall prescription drug spending was expected to increase from 4% in the previous year to 6% in 2022 in the United States. Thus, the increased drug spending indicates the high demand for prescription drugs in the region, which is anticipated to propel the need for pharmacy management systems, bolstering market growth.
- The growing inclination towards adopting PBM systems in the region is the key factor driving the market growth. For instance, in May 2022, the United States Sens Maria Cantwell (D-Wash.) and Chuck Grassley (D-Iowa) introduced a bill, the Pharmacy Benefit Manager Transparency Act of 2022, to reduce prescription costs by empowering the Federal Trade Commission and state attorneys general to halt unfair and deceptive PBM business practices. Also, in October 2021, a nonprofit coalition of nearly 40 companies, including United States retailers Walmart and Costco, launched a new firm that would offer pharmacy benefit management (PBM) services for employers.
- Similarly, in October 2021, Mark Cuban Cost Plus Drug Company PBC and the Purchaser Business Group on Health, a nonprofit coalition of nearly 40 large public and private employers, launched a new pharmacy-benefit management company. PBMs, on behalf of businesses, labor organizations, and governments, choose which medications patients have access to, negotiate discounts on the costs of those medications, and handle payments to pharmacies. Therefore, owing to the factors such as the rising adoption of pharmacy benefit management systems and growing company activities, the studied market is expected to grow over the forecast period.
Pharmacy Benefit Management Industry Overview
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. Some of the key companies in the market are CVS Health, Optum, SS&C Tecnologies, Inc., Elixir Rx Solutions, LLC, and Centene Corporation (Envolve Health), among others.
Pharmacy Benefit Management Market Leaders
CVS Health
SS&C Technologies, Inc.
Elixir Rx Solutions, LLC
Anthem, Inc.
Optum, Inc.
*Disclaimer: Major Players sorted in no particular order
Pharmacy Benefit Management Market News
- October 2022: Omnicell, Inc., a provider of medication management and adherence tools for health systems and pharmacies, launched Specialty Pharmacy Services, a comprehensive offering designed to help health systems launch and/or optimize a fully managed, hospital-owned specialty pharmacy.
- March 2022: ProdigyRx, a pharmacy benefits manager, launched its business operations that offer PBM services and clinical solutions for workers' compensation insurers, third-party administrators, and self-insured/administered employers.
Pharmacy Benefit Management Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
4.1 Market Overview
4.2 Market Drivers
4.2.1 Rising Inclination Towards Pharmacy Benefit Management System (PBMS)
4.2.2 Increasing Health Expenditure
4.2.3 Growing Demand for Prescription Products
4.3 Market Restraints
4.3.1 Reluctance To Adopt Pharmacy Automation Systems and Stringent Regulatory Procedures on Confidentiality
4.4 Porter's Five Forces Analysis
4.4.1 Threat of New Entrants
4.4.2 Bargaining Power of Buyers/Consumers
4.4.3 Bargaining Power of Suppliers
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry
5. MARKET SEGMENTATION (Market Size by Value - USD million)
5.1 By Service
5.1.1 Specialty Pharmacy
5.1.2 Drug Formulatory Management
5.1.3 Benefit Plan Design and Consultation
5.1.4 Other Services
5.2 By Business Model
5.2.1 Government Health Programs
5.2.2 Employer-Sponsored Programs
5.2.3 Health Insurance Management
5.3 By End-User
5.3.1 Pharmacy Benefit Management Organization
5.3.2 Mail Order Pharmacies
5.3.3 Retail Pharmacies
5.3.4 Other End-Users
5.4 Geography
5.4.1 North America
5.4.1.1 United States
5.4.1.2 Canada
5.4.1.3 Mexico
5.4.2 Europe
5.4.2.1 Germany
5.4.2.2 United Kingdom
5.4.2.3 France
5.4.2.4 Italy
5.4.2.5 Spain
5.4.2.6 Rest of Europe
5.4.3 Asia-Pacific
5.4.3.1 China
5.4.3.2 Japan
5.4.3.3 India
5.4.3.4 Australia
5.4.3.5 South Korea
5.4.3.6 Rest of Asia-Pacific
5.4.4 Middle East and Africa
5.4.4.1 GCC
5.4.4.2 South Africa
5.4.4.3 Rest of Middle East and Africa
5.4.5 South America
5.4.5.1 Brazil
5.4.5.2 Argentina
5.4.5.3 Rest of South America
6. COMPETITIVE LANDSCAPE
6.1 Company Profiles
6.1.1 Optum, Inc.
6.1.2 Centene Corporation (Envolve Health)
6.1.3 CVS Health
6.1.4 SS&C Technologies, Inc.
6.1.5 Anthem, Inc.
6.1.6 Elixir Rx Solutions, LLC
6.1.7 Express Scripts Holding Company
6.1.8 Benecard Services, LLC
6.1.9 CaptureRx
6.1.10 Change Healthcare
6.1.11 Abarca Health
6.1.12 ProCare Rx
6.1.13 Cigna
- *List Not Exhaustive
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
Pharmacy Benefit Management Industry Segmentation
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), business model (government health programs, employer-sponsored programs, and health insurance management), 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 also covers the estimated market sizes and trends for 17 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 | ||||||||
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Pharmacy Benefit Management Market Research FAQs
How big is the Pharmacy Benefit Management Market?
The Pharmacy Benefit Management Market size is expected to reach USD 589.40 billion in 2024 and grow at a CAGR of 5.64% to reach USD 775.34 billion by 2029.
What is the current Pharmacy Benefit Management Market size?
In 2024, the Pharmacy Benefit Management Market size is expected to reach USD 589.40 billion.
Who are the key players in Pharmacy Benefit Management Market?
CVS Health, SS&C Technologies, Inc., Elixir Rx Solutions, LLC, Anthem, Inc. and Optum, Inc. are the major companies operating in the Pharmacy Benefit Management Market.
Which is the fastest growing region in Pharmacy Benefit Management Market?
Asia-Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Pharmacy Benefit Management Market?
In 2024, the North America accounts for the largest market share in Pharmacy Benefit Management Market.
What years does this Pharmacy Benefit Management Market cover, and what was the market size in 2023?
In 2023, the Pharmacy Benefit Management Market size was estimated at USD 557.93 billion. The report covers the Pharmacy Benefit Management Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Pharmacy Benefit Management Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
What are the key challenges faced in the Pharmacy Benefit Management (PBM) Market?
The key challenges faced in the Pharmacy Benefit Management (PBM) Market are a) Rising drug costs and managing prescription drug spending b) Adopting new technologies and data analytics for efficient PBM operations
Pharmacy Benefit Management Industry Report
The global pharmacy benefit management (PBM) market is on a significant upswing, fueled by the growing need for cost-effective management of prescription drugs amidst rising chronic diseases and healthcare costs worldwide. The PBM industry is crucial in mediating drug prices among insurers, pharmacies, and manufacturers to enhance medication affordability. With a keen focus on adopting technologies like AI to improve efficiency in negotiations and claims processing, the specialty pharmacy services lead in PBM market share due to the high costs of specialty drugs. Moreover, insurer and service provider consolidations are amplifying insurance companies' market dominance, especially in North America, which boasts a large share due to widespread health insurance coverage. The Asia Pacific region is also seeing rapid growth, thanks to increased healthcare insurance uptake. Mordor Intelligence™ Industry Reports highlight the PBM market's dynamic expansion, size, and revenue growth, offering a comprehensive analysis and forecast. This sector is pivotal in ensuring drug affordability and accessibility, marking a promising future for global healthcare. Get a free report PDF download for detailed PBM industry insights and market share analysis.
