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).
- The pharmacy benefit management market is experiencing significant growth due to a rising inclination toward pharmacy benefit management systems (PBMS), increasing health expenditure, and growing demand for prescription products. 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 and provide affordable medications to patients. This is anticipated to augment the market growth during the forecast period.
- For instance, according to the Canadian Institute for Health Information published in November 2023, the healthcare expenditure in Canada reached USD 344 billion in 2023 from USD 334 billion in 2022. Thus, the significant increase in healthcare spending is expected to foster the adoption of advanced pharmacy benefit management systems to make medicines more accessible to patients.
- The rising inclination toward pharmacy benefits management increases accuracy, improves the safety and efficiency of the pharmacy store, and improves patient health outcomes. This is anticipated to fuel the market's growth during the forecast period. For instance, in March 2022, Rite Aid's pharmacy benefit manager (PBM) division, Elixir, announced its Pharmaceutical Care Management Association (PCMA) membership. Elixir's inclusion in PCMA enhances patient access to cost-effective prescription medications. 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 during the forecast period.
- Moreover, the company's rising activities in developing advanced software and solutions contribute to market growth. For instance, in July 2023, Prime Therapeutics LLC (Prime), a pharmacy benefit manager (PBM), unveiled its 2023 formulary recommendations for Humira. These recommendations aim to provide clients with cost-effective options, fostering heightened competition among manufacturers. Consequently, clients stand to benefit from potential savings on both Humira and its biosimilar alternatives.
- Therefore, the market is expected to grow during the forecast period due to increasing healthcare expenditure and company activities. However, the reluctance to adopt pharmacy automation systems and stringent regulatory processes on confidentiality will likely hinder the growth of the pharmacy benefit management market during the forecast period.
Pharmacy Benefit Management Market Trends
The Specialty Pharmacy Segment is Expected to Witness Significant Growth During 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 exceptional 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 during the forecast period due to the growing demand for prescription drugs, 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 during the forecast period. For instance, in April 2022, Southern Scripts launched RxCompass, a novel solution aimed at aiding United States companies and their staff to tackle the escalating expenses of specialty medications. Southern Scripts crafted the inaugural member-focused pharmacy navigation tool, leveraging its PBM proficiency and extensive industry connections. This tool guides members through a tailored journey, helping them select the specialty drug management program that suits their distinct requirements and comes at the most cost-effective rate.
- Additionally, in March 2022, VPL launched TrajectRx, a specialty pharmacy software designed for pharmacists. TrajectRx streamlines the pharmacy-to-patient care journey, enhancing patient care continuity, ensuring compliance with payors and accrediting bodies, and facilitating secure, cost-effective medication delivery. Therefore, owing to the factors above, the market is anticipated to grow during the forecast period.
North America is Expected to Have the Significant Market Share During the Forecast Period
- North America is anticipated to witness significant growth in the pharmacy benefit management market during the forecast period owing to 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, overall prescription drug spending in the United States was expected to increase from 4% in the previous year to 6% in 2022. 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 key factor driving the market growth is the growing inclination toward adopting PBM systems in the region. For instance, in May 2022, Senators Maria Cantwell (D-Wash.) and Chuck Grassley (D-Iowa) collaborated on the Pharmacy Benefit Manager Transparency Act 2022. This bill aims to lower prescription costs by granting the Federal Trade Commission and state attorneys general the authority to intervene against unfair and deceptive practices by PBMs.
- In July 2023, Express Scripts, Evernorth's pharmacy benefits management (PBM) arm, incorporated three new biosimilars into its National Preferred Formulary (NPF). These biosimilars boast competitive net costs compared to Humira and enhance patient access and choice. Therefore, the market is expected to grow during the forecast period due to factors such as the rising adoption of pharmacy benefit management systems and increasing company activities.
Pharmacy Benefit Management Industry Overview
The pharmacy benefit management market is competitive, with several global and international 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).
Pharmacy Benefit Management Market Leaders
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CVS Health
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SS&C Technologies, Inc.
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Elixir Rx Solutions, LLC
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Anthem, Inc.
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Optum, Inc.
*Disclaimer: Major Players sorted in no particular order
Pharmacy Benefit Management Market News
- February 2024: The New York State Department of Financial Services (DFS) superintendent proposed new market conduct regulations for Pharmacy Benefit Managers (PBMs) in the state. These regulations are designed to bolster consumer protections and combat anti-competitive practices in the state.
- February 2024: Better Therapeutics Inc. inked a rebate deal with a prominent Pharmacy Benefit Manager (PBM) in the United States. This agreement explicitly targets the PBM's commercial clientele, enabling plan participants to include AspyreRx in their formularies while qualifying for rebates.
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
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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
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4.3 Market Restraints
- 4.3.1 Reluctance To Adopt Pharmacy Automation Systems and Stringent Regulatory Procedures on Confidentiality
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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)
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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
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5.2 By Business Model
- 5.2.1 Government Health Programs
- 5.2.2 Employer-Sponsored Programs
- 5.2.3 Health Insurance Management
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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
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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
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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 Market Analysis
As per the scope of the report, the pharmacy benefit management market plays a significant role in the healthcare industry. It uniquely administers the pharmacy product and focuses on real-time interaction. Pharmacy benefit managers (PBMs) 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, business model, end user, and geography. By service, the market is segmented into specialty pharmacy, drug formulary management, benefit plan design and consultation, and other services. By business model, the market is segmented into government health programs, employer-sponsored programs, and health insurance management. By end user, the market is segmented into pharmacy benefit management organizations, mail-order pharmacies, retail pharmacies, and other end users. By geography, the market is segmented into North America, Europe, Asia-Pacific, the 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) 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 | ||
| Geography | Europe | Germany |
| United Kingdom | ||
| France | ||
| Italy | ||
| Spain | ||
| Rest of Europe | ||
| Geography | Asia-Pacific | China |
| Japan | ||
| India | ||
| Australia | ||
| South Korea | ||
| Rest of Asia-Pacific | ||
| Geography | Middle East and Africa | GCC |
| South Africa | ||
| Rest of Middle East and Africa | ||
| Geography | South America | Brazil |
| Argentina | ||
| Rest of South America |
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 556.16 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
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.
