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Pharmacy Benefit Management: Market Research Report

Market Research • Market Size • Industry Statistics • Industry Analysis • Industry Trends

Pharmacy Benefit Management Market Research Report | NAICS OD4620 | Nov 2016

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

IBISWorld’s Pharmacy Benefit Management market research report is a comprehensive guide to market size and growth prospects. Our industry reports offer strategic industry analysis of the factors influencing companies, including new product developments, economic, lifestyle and demographic influences, distribution and supply chain factors and pricing issues. Full analysis accompanies our data forecasts to illustrate how the market responds to emerging industry trends.

Report Snapshot
Industry Statistics & Market Size
Annual Growth 11-16
Annual Growth 16-21
Annual Growth
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
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Industry Analysis & Industry Trends

Historically, pharmacy benefit managers (PBMs) have served as third-party administrators of prescription drug programs. Today, the role of PBMs have expanded to include programs that help control prescription costs, such as offering drug formularies that feature lower cost therapeutic categories. Rising drug prices, particularly specialty drugs, have incited health insurers to turn to PBMs for cost management services. Due to the patent cliff in 2012, which caused many brand-name drugs to lose their patent exclusivity, more consumers have purchased lower-priced generic drugs. Overall, the patent cliff has benefited the industry due to PBMs typically reporting financial gains when an influx of generics come off of manufacturers' drug pipelines... ... purchase to read more

Industry Report - Industry Investment Chapter

The Pharmacy Benefit Management industry has a high level of capital intensity. For every dollar spent on labor, about $0.42 is spent on capital expenditures. To run daily operations, a significant amount of capital is needed, including properties, plants and equipment. In addition, companies in the industry invest a considerable amount in the development of internal-use software. PBMs invest heavily in healthcare information technology (HCIT) systems to store data and process claims online. Some industry operators, offer a number of HCIT applications to clients on a license or fee-for-service basis. Additionally, wages only account for about 0.9% of industry revenue, indicating that the Pharmacy Benefit Management industry is not highly labor-intensive.

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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... purchase to read more


    Industry ProductsRelated Reports

    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 servicesSpecialty pharmacy servicesBenefit plan design and consultationDrug formulary managementOther services
    Industry Activities
    Processing and paying prescription drug claimsManaging prescription drug plan costsPrescription drug plan design and administration

    Table of Contents
    About this Industry
    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry at a Glance
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Industry Performance
    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
  • Healthcare reform will boost revenue
  • Profit margins miss out
  • Table: Pharmacy Benefit Management Industry Revenue Outlook
  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Pharmacy Benefit Management Industry Lifecycle vs The Economy
  • Products & Markets
    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
  • Competitive Landscape
    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
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Pharmacy Benefit Management Industry
  • Industry Globalization
    Major Companies
    CVS Health Corporation
    Express Scripts Holding Company
    UnitedHealth Group Inc.
  • Table: CVS Health Corporation - financial performance
  • Table: Express Scripts Holding Company - financial performance
  • Table: UnitedHealth Group Inc. - financial performance
  • Operating Conditions
    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
    Key Statistics
  • Table: Industry Data for the Pharmacy Benefit Management Industry
  • Includes:
  • Industry Revenue (2007-2021)
  • Industry Gross Product (2007-2021)
  • Establishments (2007-2021)
  • Businesses (2007-2021)
  • Employment (2007-2021)
  • Wages (2007-2021)
  • Total health expenditure (2007-2021)
  • Table: Annual Percentage Change for Key Industry Data
  • Table: Key Ratios for Industry Key Data
  • Jargon & Glossary
    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.

  • Why Buy this Report?
    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    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 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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