Pharmacy Benefit Management Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Pharmacy Benefit Management Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The pharmacy benefit management market is expected to register a CAGR of nearly 5.1% over the forecast period, (2022- 2027).

The COVID-19 pandemic is an unprecedented health issue and has significantly impacted the pharmacy benefit management market. According to a study published in January 2021, titled 'Drugs supply and pharmaceutical care management practices at a designated hospital during the COVID-19 epidemic', in the fight against the epidemic, hospitals are facing difficulties in personnel, drug supply, and pharmaceutical care. The pharmaceutical department has established effective drug supply and pharmaceutical care practices and provided a strong guarantee for epidemic prevention, control, and treatment. In addition, several market players such as OptumRx, Inc., and Cigna, reported significant revenue growth. For example, OptumRx saw a 17.8% increase in 2020 and a 4.4% increase in 2021 compared to 2019. Thus, the COVID-19 pandemic has positively affected the growth of the market.

The major factors driving the market growth are increasing preference for pharmacy benefit management (PBMS), increasing healthcare expenditure, and increasing demand for prescription drugs.

The rising inclination towards pharmacy benefits management contributes to the market's growth. For example, according to a March 2022 update from the Pharmaceutical Care Management Association (PCMA), the Pharmaceutical Care Management Association (PCMA) announced that Elixir, Rite Aid's pharmacy benefit manager (PBM), is joining the trade association. The addition of Elixir to PCMA demonstrates how dynamic the PBM industry has become and represents a commitment to PCMA's work on behalf of patients to improve access to affordable prescription drugs. In addition, Emsana Health aims to serve as an innovation studio in October 2021 to develop new products and solutions designed with input from PBGH employer members.

Additionally, in October 2021, a nonprofit coalition of nearly 40 companies, including the United States retailers Walmart and Costco, launched a new firm that would offer pharmacy benefit management (PBM) services to employers. Additionally, in October 2021, Mark Cuban's new generic company announced the launch of its own pharmacy benefits management company. Thus, such developments indicate increasing use of pharmacy benefit management services, which contributes to the market's growth.

However, reluctance to adopt pharmacy automation systems and stringent regulatory procedures are the factors hindering the market growth.

Key Market TrendsSpecialty Pharmacy Segment is Expected to Witness Growth Over the Forecast Period

Based on service type, the specialty pharmacy segment is expected to hold a significant market share. Specialty pharmacies provide drugs to treat rare or complex medical conditions and are designed to efficiently supply drugs with special handling, storage, and distribution requirements with standardized processes.

Several market players are involved in implementing strategic initiatives thereby contributing to the growth of the market. For example, in February 2021, Navitus Health Solutions, a full-service pharmacy benefit manager (PBM), announced that Lumicera Health Services, its wholly-owned specialty pharmacy, purchased a specialty pharmacy from CareMetx, a leading technology center. the service company is committed to improving patient access to specialty drugs. Based in Gaithersburg, Maryland, CareMetx Health's specialty pharmacy will enable Lumicera to better serve patients in the eastern United States. In addition, in February 2022, Southern Scripts, one of the leading pharmacy benefit managers (PBMs), highly regarded for its transparent pricing, launched RxCompass, a new solution designed to support companies in the United States and their employees in reducing the high costs of specialty medicines.

Thus, due to the above-mentioned factors, the segment is expected to witness significant growth over the forecast period.

North America is is Expected to Dominate the Pharmacy Benefit Management Market

North America is expected to dominate the overall pharmacy benefit management market throughout the forecast period. The major factors driving the growth of the market are the increasing number of medication errors, increasing adoption of pharmacy benefit management, and rising healthcare expenditure. For example, about 7,000 to 9,000 people die each year in the United States due to medication errors, according to a study titled “Medication Errors and Prevention” released by the National Library of Medicine in July 2022. The report also stated that the total patient care costs associated with medication errors are more than USD 40.0 billion annually, and approximately 7.0 million patients are affected by medication errors annually. Thus, rising incidents of medication errors are expected to increase the demand for pharmacy dose management services, thus boosting the market growth.

Several players in the market are involved in implementing strategic initiatives thereby fueling the growth of the market. For example, in July 2021, major insurers Anthem and Humana announced they were partnering with software solutions company SS&C to create a new pharmacy benefit management (PBM) platform. Additionally, according to an August 2021 update from the Securities and Insurance Commissioner of Mehtontana State Auditor (CSIMT), more than 100 bills targeting pharmacy benefit managers were introduced in the United States in 2021, after the three largest pharmacy benefit managers handled roughly 77, 0% of all prescription requests in the United States in 2020.

Thus, owing to the above-mentioned developments, the market in North America is expected to witness significant growth over the forecast period.

Competitive Landscape

The pharmacy benefit management market is competitive with the presence of several global and international market 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. The competitive landscape includes an analysis of a few international as well as local companies which hold the market shares and are well known including CVS Health, Optum, SS&C Tecnologies, Inc., Elixir Rx Solutions, LLC and Centene Corporation (Envolve Health) among others.

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