Pharmacy Benefit Management Services Market Analysis

Global Pharmacy Benefit Management Services Market Overview

The Pharmacy Benefit Management Services Market Size was valued at USD 501.55 billion in 2023 and is projected to grow from USD 531.69 Billion in 2023 to USD 856.20 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 6.14% during the forecast period (2024 - 2032). The key market drivers boosting the market growth of pharmacy benefit management services are an increase in the need to reduce medication errors, rapid broader implications of pharmacies, an increase in the geriatric population, and an increase in labor costs.

The primary market factors that are fueling the expansion of the market for pharmacy benefit management services are an increase in the demand for the reduction of pharmaceutical errors, a quick expansion of the scope of the implications that pharmacies have, an increase in the number of elderly people, and an increase in the cost of labor.

The demand for therapeutic treatments is being driven in large part by the alarmingly quick rise in the prevalence of chronic diseases among the population. Because of this, a significant number of multinational pharmaceutical companies are concentrating their efforts on the production of branded prescription pharmaceuticals with high prices for the treatment of chronic illnesses. In the most recent few years, this has led to a considerable increase in the total amount spent on pharmaceuticals. This, in conjunction with an uptick in prescription requests over the past few years for a variety of chronic ailments such as cardiovascular disease, chronic lung disease, and others, is contributing to a rise in overall healthcare costs.

The burden of providing medical treatment is growing as a direct result of a considerable rise in both the cost of medications and the number of prescriptions filed around the world. As a consequence of this, there has been an increase in the demand for the utilization of these pharmacy benefit management services in order to reduce the costs of pharmaceuticals, manage spending on global pharmaceuticals, and support the growth of the pharmacy benefit management services market CAGR during the duration of the study.

Because of the growing demand for pharmacy benefit management services among insurance companies, retail pharmacy chains, and pharmaceutical firms, service providers are increasingly favoring advanced workflows that make use of machine learning in place of more conventional workflows. As a direct consequence of this, enterprises are able to promptly fulfill mail orders, provide a streamlined supply chain, and serve a large number of retail pharmacies and insurance companies.

August 2023: Capital Rx, a health technology firm dedicated to improving access to affordable healthcare in the United States, has secured a strategic investment from Memorial Hermann Health System, a Houston-based not-for-profit hospital network, in August 2023. Together with Capital Rx's existing investors, Memorial Hermann will help advance JUDI®, the gold standard for pharmacy benefit management (PBM) industry backend claims processing platforms, and accelerate the expansion of Capital Rx's comprehensive PBM and PBA PaaS offering. Increased operational efficiency and command over prescription claims processing for Medicare, Medicaid, and commercial programs is made possible by Capital Rx's JUDI. 

Pharmacy Benefit Management Services Market Trends

• Increasing global pharmaceutical expenses to drive market growth

The rapidly increasing prevalence of chronic illnesses among the population drives demand for therapeutic interventions. As a result, many large pharmaceutical corporations are focusing on developing high-priced branded prescription drugs to treat chronic conditions. This has resulted in a substantial increase in pharmaceutical spending in recent years. For instance, a report in Pharmaceutical Technology claims that drug prices rose by 4.0% in the United States in 2021, breaking a pattern of a gradual rise in previous years. Additionally, the SingleCare Administrators reported that in 2021, the cost of a single prescription drug increased by 5%.

This, combined with increased prescription filings in recent years for various chronic diseases such as cardiovascular disease, chronic lung disease, and others, is driving up healthcare spending. For example, it is estimated that 4 billion prescription medications are dispensed annually in the United States. The number of prescription filings is anticipated to increase within a few years significantly. This information comes from the latest survey by SingleCare Administrators published in 2022. As a result, a significant increase in drug costs and prescription filings worldwide is increasing the healthcare burden. As a result, there has been a rise in the demand for and use of these pharmacy benefit management services to lower drug costs, manage global pharmaceutical spending, and support pharmacy benefit management services market CAGR expansion during the study period.

The increasing use of pharmacy benefit management services by insurance companies, retail pharmacy chains, and pharmaceutical companies is resulting in service providers preferring advanced workflows that use machine learning over traditional workflows. As a result, businesses can quickly fulfill mail orders, offer a streamlined supply chain, and service many retail pharmacies and insurance companies. For example, CAPITAL RX, a significant player in the United States, uses machine learning and artificial intelligence (AI) algorithms to reduce human error and claim processing time. Thus, incorporating machine learning and AI technology into the workflow enables businesses to reduce medical costs while increasing the efficiency of coverage procedures, thereby driving the growth of pharmacy benefit management services market revenue.

Pharmacy Benefit Management Services Market Segment Insights

Pharmacy Benefit Management Services Service Insights

The market of Pharmacy Benefit Management Services segments, based on services, includes retail pharmacy services, specialty pharmacy services, benefit plan design & consultation, and others. The specialty pharmacy services segment held the majority share in 2022, contributing around ~45-49% to the Pharmacy Benefit Management Services Market revenue. Specialty pharmacies are designed to supply drugs efficiently with exceptional handling, stockpiling, and distribution requirements using standardized processes to treat rare or multifaceted medical conditions. The increasing prevalence of rare and chronic diseases drives demand for treatment options such as specialty drugs. On the other hand, high-priced drugs must be within reach for most patients. This increases the need for these pharmacy benefit management services, lowering the cost of specialty drugs to a reasonable level. This results in specialty pharmacy services, among other services, dominating the market. Several market participants are involved in strategic initiatives contributing to market growth.

February 2022 Southern Scripts, a leading pharmacy benefit management services company for its transparent pricing, has launched RxCompass, a product offering designed to help companies and their employees in the United States reduce the high costs of specialty medications for the pharmacy benefit management services industry.

February 2021 Navitus Health Solutions, a full-service pharmacy benefit manager (PBM), has announced the acquisition of a specialty pharmacy from CareMetx, a leading technology center, by Lumicera Health Services, its wholly-owned specialty pharmacy. The service provider is dedicated to increasing patient access to specialty medications. CareMetx Health's specialty pharmacy, based in Gaithersburg, Maryland, will allow Lumicera to best serve patients in the eastern United States.

Figure 2: Pharmacy Benefit Management Services Market, by Services, 2022 & 2030 (USD Billion)Source: Primary Research, Secondary Research, MRFR Database, and Analyst Review

Further, retail pharmacy is predicted to be the fastest-growing segment in the pharmacy benefit management services industry during the forecast period. The increasing number of retail pharmacy units worldwide and the increasing penetration of online pharmacies are anticipated to propel this segment's growth. The growing internet penetration, smartphone adoption, and consumer popularity of e-commerce are fueling the development of online retail pharmacies, which is predicted to accelerate the retail pharmacy services segment's growth in the upcoming years.

Pharmacy Benefit Management Services End User Insights

End users have bifurcated the Pharmacy Benefit Management Services Market data into healthcare providers and employers. The healthcare providers segment led the global market in 2022 and is projected to be the faster-growing segment during the forecast period 2022-2030. The dominant position of this market segment in the global pharmacy benefit management services industry is primarily due to the increase in mergers and acquisitions between insurance companies and healthcare providers of pharmacy benefit management services. For example, for three years, First Medical Health Plan Inc and Abarca Health LLC formed a partnership to provide pharmacy benefit management services. In addition, both developed and developing countries are seeing an increase in the penetration of health insurance firms, significantly boosting pharmacy benefit management services market growth.

Pharmacy Benefit Management Services Regional Insights

By region, the study provides market insights into Europe, North America, Asia-Pacific, and the Rest of the World. The North American Pharmacy Benefit Management Services Market accounted for USD 206.19 billion in 2022 and is anticipated to exhibit a significant CAGR growth over the study period. The United States is home to leading pharmaceutical manufacturers, insurance companies, pharmacy benefit management services providers, and retail pharmacy chains. Increased health insurance adoption among the US population has facilitated market growth. The prevalence of chronic diseases in the US is higher than 50%. The market for pharmacy benefit management in North America is expanding due to rising insurance policy adoption rates and high healthcare costs. The region has seen a significant increase in the number of health insurance companies, which has fueled the growth of the North American pharmacy benefit management market. In the United States, most patients rely on reimbursements to treat various diseases. The favorable reimbursement policies of regional governments have also contributed to market growth.

Further, the major countries studied in the market report are the U.S., Germany, Canada, the UK, France, Spain, China, Italy, India, Australia, Japan, South Korea, and Brazil.

August 2023: In order to help health plans on a national scale implement an unbiased strategy for managing prescription expenses, healthcare industry executive David Blair announced in August 2023 that he had founded a new pharmacy benefit management business (PBM) called LucyRx. Mr. Blair's co-founders are Martin Payne and Josh Lynn, both established figures in their fields. Together, the three CEOs have 15 years of experience in the PBM and auxiliary healthcare service markets, during which time they have built and operated several successful businesses. Due to the rapid aging of the population, the rising prescription drug usage, and the increasing prevalence of chronic conditions, health plans are struggling to keep up with the rising cost of complex, high-priced specialty drugs. This has created an urgent need for value-add pharma services companies to provide essential solutions.

Figure 3: PHARMACY BENEFIT MANAGEMENT SERVICES MARKET SHARE BY REGION 2022 (%)

Source: Primary Research, Secondary Research, MRFR Database, and Analyst Review

European pharmacy benefit management services market accounts for the second-largest market share. A large patient population covered by medical insurance, a favorable regulatory environment for pharmacy benefit managers, and the growing number of pharmacy benefit administrators in European countries are all essential factors for regional dominance. Several European market participants are involved in implementing strategic initiatives to help sustain the market's growth. Further, the UK market of pharmacy benefit management services held the largest market share, and the France market of pharmacy benefit management services was the fastest-growing market in the European region.

The Asia-Pacific Pharmacy Benefit Management Services Market will likely grow at the fastest CAGR from 2022 to 2030. This is due to the increasing adoption of healthcare insurance among the population. Rising chronic disease prevalence and rising regional healthcare expenditure drive market growth. Moreover, the growing penetration of several pharmacy benefit management services companies in the Asia Pacific region is projected to boost market growth in the coming years. Furthermore, China’s market of pharmacy benefit management services held the largest market share, and the Indian market of pharmacy benefit management services was the fastest-growing market in the Asia-Pacific region.

Pharmacy Benefit Management Services Key Market Players & Competitive Insights

The pharmacy benefit management services market is highly competitive, with several global and international players. The major players are adopting key market development strategies to improve their position in the worldwide market, including alliances, contracts, partnerships, joint ventures, the introduction of new services, geographic expansions, mergers, and acquisitions. Major market players profit by raising drug prices or keeping a portion of rebates. They negotiate discounted rates with drug manufacturers and pass on the savings to insurers. Competitors in the pharmacy benefit management services industry must provide cost-effective services to develop and endure in an increasingly competitive and rising global market environment.

The pharmacy benefit management services market’s major players, including CVS Health, McKesson Corporation, Express Scripts, MeridianRx, and others, are working to increase industry demand by investing more in service research and development activities. In recent years, the pharmacy benefit management services industry has provided some of the most substantial benefits to healthcare providers through specialty pharmacy services.

CVS Health is a health care and retail pharmacy services provider. The company sells prescription medications, beauty, health care, personal care, and cosmetics. The company also offers prescription drug plans, administrative services, Medicaid health care management services, disease-related services, pharmacy benefit management services, and other services. Aetna, a CVS Health company, began offering fully insured health care network options to its Exclusive Product Organization (EPO), Preferred Product Organization (PPO), and Health Maintenance Organization (HMO) product portfolios in July 2019 through Aetna Whole HealthSM - Southern California.

Express Scripts offers pharmacy benefit management services. The company provides services such as network pharmacy claims processing, benefit design consulting, drug utilization review, home delivery & specialty pharmacy care, formulary management, and medical & drug data analysis. Express Scripts and Appriss Health, a supplier of prescription drug monitoring platforms, collaborated in April 2019 to establish a Prescription Drug Monitoring Program (PDMP) for the MHS (Military Health Systems).

Key Companies in the market of pharmacy benefit management services include

• Abarca Health LLC


• CVS Health


• Express Scripts


• Humana Pharmacy Solutions


• Magellan Rx Management


• McKesson Corporation


• Medimpact Healthcare


• MeridianRx


• OptumRx (UnitedHealth)


• Prime Therapeutics


• Sea Rainbow


• Vidalink

Pharmacy Benefit Management Services Industry Developments

January 2022: Centene Corporation purchased Magellan Health Inc to offer integrated healthcare solutions that promote whole health and achieve better health outcomes while being more affordable pharmacy benefit management services.

November 2020: Anthem Inc introduced IngenioRx, an advanced pharmacy benefit management services that personalize member experiences through clinical experience and a digital-first approach. This launch aided the company in increasing customer reach and revenue.

Pharmacy Benefit Management Services Market Segmentation

Pharmacy Benefit Management Services Service Outlook

• Retail pharmacy services


• Specialty pharmacy services


• Benefit plan design & consultation


• Others

Pharmacy Benefit Management Services End User Outlook

• Healthcare Providers


• Employers

Pharmacy Benefit Management Services Regional Outlook

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  North America

  
  
  
  
  • US
  
  
  • Canada
  
  
  
  


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  Europe

  
  
  
  
  • Germany
  
  
  • France
  
  
  • UK
  
  
  • Italy
  
  
  • Spain
  
  
  • Rest of Europe
  
  
  
  


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  Asia-Pacific

  
  
  
  
  • China
  
  
  • Japan
  
  
  • India
  
  
  • Australia
  
  
  • South Korea
  
  
  • Australia
  
  
  • Rest of Asia-Pacific
  
  
  
  


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  Rest of the World

  
  
  
  
  • 
    

    Middle East

    
    
  
  
  • 
    

    Africa

    
    
  
  
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    Latin America