Pharmacy Benefit Management Market 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) : Global Opportunity Analysis and Industry Forecast, 2024-2033
Pharmacy Benefit Management Market
The pharmacy benefit management market was valued at $0.5 billion in 2023 and is projected to reach $1.0 billion by 2033, growing at a CAGR of 6.1% from 2024 to 2033.
Pharmacy benefit management (PBM) is a third-party administrator that plays a crucial role in the healthcare system as it acts as an intermediary between drug manufacturers, pharmacies, and health insurance companies. The role of PBM is to regulate prescription drug benefits for patients to control the surging medication costs, while ensuring access to essential treatments.
Rise in healthcare expenses is a key driver of the pharmacy benefit management market as PBMs effectively control the expenditure on drugs by the implementation of strategies such as formulary management and negotiating rebates. Furthermore, the ability of PBMs to ensure transparency in healthcare costs augments the development of the market significantly. To accelerate decision-making, the usage of data analytics tools is trending in the market. These tools use advanced analytics techniques for cost optimization, pattern identification in prescription drug usage, and favorable pricing negotiation with pharmaceutical manufacturers.
However, concerns pertaining to privacy of the personal health information of patients deter several individuals from availing services of PBMs, hampering the development of the market. Furthermore, as the pharmacy benefit management market is highly concentrated, the dominating companies hold maximum power to gain excessive total compensation from their customers. This power restrains the growth of the market. For instance, three firms controlled 79% of the U.S. market in 2022, offering them the authority to earn excessive profits. Contrarily, the integration of PBM services with telemedicine and digital health solutions is poised to present lucrative opportunities for the market expansion.
Segment ReviewThe pharmacy benefit management market is segmented into service, business model, end user, and region. On the basis of service, the market is divided into specialty pharmacy, drug formulatory management, benefit plan design & consultation, and other services. Depending on business model, it is classified into government health programs, employer-sponsored programs, and health insurance management. As per end user, it is categorized into pharmacy benefit management organization, mail order pharmacies, retail pharmacies, and other. Region wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
Key FindingsOn the basis of service, the specialty pharmacy segment is expected to dominate the market throughout the forecast period.
Depending on business model, the health insurance management segment is projected to acquire a high stake in the market by 2033.
As per end user, the pharmacy benefit management organization segment is predicted to be the highest shareholder during the forecast period.
Region wise, North America is anticipated to be the highest revenue generator by 2033.
Competition AnalysisThe leading players operating in the global pharmacy benefit management market include CVS Health, The Cigna Group, OptumRx Inc., Anthem Inc, Centene Corporation, Abarca Health LLC, Medimpact, Elixir Rx Solutions LLC, Express Scripts Holding Company, and SS&C Technologies, Inc. These major players have adopted various key development strategies such as business expansion, new product launches, and partnerships to strengthen their foothold in the competitive market.
Key Market SegmentsBy ServiceSpecialty Pharmacy
Drug Formulatory Management
Benefit Plan Design and Consultation
Other Services
By Business ModelGovernment Health Programs
Employer-Sponsored Programs
Health Insurance Management
By End UserPharmacy Benefit Management Organization
Mail Order Pharmacies
Retail Pharmacies
Other
By RegionNorth America
U.S.
Canada
Mexico
Europe
Germany
France
UK
Italy
Spain
Rest of Europe
Asia-Pacific
Japan
China
Australia
India
South Korea
Rest of Asia-Pacific
LAMEA
Brazil
Saudi Arabia
South Africa
Rest of LAMEA
Key Market PlayersCVS Health
The Cigna Group
OptumRx Inc
Anthem Inc
Centene Corporation
Abarca Health LLC
Medimpact
Elixir Rx Solutions LLC
Express Scripts Holding Company
SS&C Technologies, Inc