Picture of health: Total health expenditure will increase, fostering industry revenue growth

Major merger and acquisition activity has continued to increase the market share of the largest PBMs in the Pharmacy Benefit Management industry. Overall, rising total health expenditure and prescription drug use drove demand for industry services during the five-year period to 2018. Additionally, many brand-name drugs lost their patent exclusivity, giving more consumers access to lower-priced generic drugs. Over the five years to 2023, industry revenue is forecast to grow. PBMs will help cut healthcare costs by ensuring patient adherence, compliance and drug utilization. However, PBMs will endure mounting price pressures from insurers to keep prescription prices low, limiting industry revenue growth...purchase to read more.

Industry Statistics & Market Size
Revenue
$453bn
Annual Growth 13-18
9.6%
Forecast Growth 18-23
Profit
Employment
32,700
Businesses
414

Industry Threats & Opportunities

  • Rising drug costs and increased consumer bases have bolstered industry demand
  • Growth in the number of physician visits has contributed to higher prescription drug use
  • PBMs that operate mail-order and online pharmacies will experience the strongest growth
  • Industry Report - Industry Analysis Chapter

    Pharmacy benefit managers (PBMs) are third-party administrators of prescription drug programs under a variety of sponsors, such as employers, health insurance companies, unions, workers’ compensation plans, local governments, federal and state government health programs, managed care organizations and other sponsors of health benefit plans. According to the Pharmaceutical Care Management Association (PCMA), PBMs implement prescription drug benefits for more than 253.0 million Americans, making them a vital part of managing costs and providing consumers with prescription medications in the US healthcare system. PBM...purchase to read more.

    Additional Insights for the Pharmacy Benefit Management Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Pharmacy Benefit Management Industry are

  • Having a diverse range of clients
  • Well-developed internal processes
  • Economies of scale
  • IBISWorld analysts also discuss how external factors such as Total health expenditure and Number of employees in the Pharmacy Benefit Management industry impact industry performance..

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    What's in this report

    What is the Pharmacy Benefit Management Industry?

    This industry includes operators that provide pharmacy benefit management services. Industry operators are third-party administrators of government and employer-sponsored prescription drug programs. They are primarily responsible for processing and paying prescription drug claims.

    Industry Products
  • Retail pharmacy services
  • Specialty pharmacy services
  • Benefit plan design and consultation
  • Drug formulary management
  • Other services
  • Industry Activities
  • Processing and paying prescription drug claims
  • Managing prescription drug plan costs
  • Prescription drug plan design and administration
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Total health expenditure
  • Number of employees
  • Number of physician visits
  • Number of people with private health insurance
  • Median age of population
  • Regulation for the Health and Medical Insurance industry

  • Current Performance
  • Higher prescription drug use drives demand
  • Rising drug costs spurs consolidation
  • Chart: Revenue Growth

  • Industry Outlook
  • Consolidation and increased prescription spending
  • Rising use of generics
  • Table: Pharmacy Benefit Management Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Pharmacy Benefit Management Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Health & Medical Insurance
  • Health & Welfare Funds
  • Public Administration
  • Consumers

  • Key Selling Industries
  • Brand Name Pharmaceutical Manufacturing
  • Generic Pharmaceutical Manufacturing

  • Products & Services
  • Retail pharmacy services
  • Specialty pharmacy services
  • Other services
  • Benefit plan design and consultation
  • Drug formulary management
  • Chart: Pharmacy Benefit Management Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Government health programs
  • Employer-sponsored programs
  • Health insurance companies
  • Other programs
  • Individuals (out-of-pocket)
  • Chart: Major Market Segmentation for the Pharmacy Benefit Management Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Purchases
  • Operating expenses
  • Chart: Cost Structure Benchmarking – Sector vs Pharmacy Benefit Management

  • Basis of Competition
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Pharmacy Benefit Management Industry

  • Industry Globalization
    CVS Health Corporation, Express Scripts Holding Company, UnitedHealth Group Inc., Humana Inc.,
  • Table: CVS Health Corporation - financial performance
  • Table: Express Scripts Holding Company - financial performance
  • Table: UnitedHealth Group Inc. - financial performance
  • Table: Humana Inc. - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Pharmacy Benefit Management Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Pharmacy Benefit Management Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)
  • Total health expenditure (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Chronic Illness
  • A disease that is long-lasting or recurrent.
  • Formulary
  • A list of medications designed to specify medications that can be prescribed under a particular contract.
  • Prescription Medication
  • A licensed medicine that requires medical approval to obtain.
  • What Our Customers Say

    Why buy this report?

    The Pharmacy Benefit Management industry market report contains strategic analysis of the key drivers influencing the industry. Save hours of time on research and prospecting using IBISWorld’s standardized, up-to-date reports on thousands of industries. Our industry research provides growth and profit forecasts for a five-year outlook period, presented in a clear and user-friendly format.

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    This report on Pharmacy Benefit Management:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Pharmacy Benefit Management market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Pharmacy Benefit Management, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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