U.S. Pharmacy Benefit Management Market - Focused Insights 2024-2029

U.S. PHARMACY BENEFIT MANAGEMENT MARKET INSIGHTS

The U.S. pharmacy benefit management (PBM) market was valued at USD 491.88 billion in 2023 and is expected to reach USD 680.73 billion by 2029, growing at a CAGR of 5.56% during the forecast period. The demand for pharmacy benefit management is rising due to multiple factors, including the rising baby boomers, the rising aging population, the increase in healthcare expenditure, the growing prevalence of heart diseases and nerve disorders, and the growing awareness among the general population.

Market Definition

Pharmacy benefit management involves administering and managing prescription drug programs on behalf of employers, insurers, and other payers. PBMs are intermediaries between employers, health plans, pharmacies, and pharmaceutical manufacturers.

MARKET TRENDS

Specialty drugs Continuing to Drive Rx Spend: Specialty drugs represent the fastest-growing area of pharmacy spend. Over the years, specialty drug growth has been driven by adopting innovative drugs, such as those for oncology and autoimmune therapies. According to the IQVIA Institute, 50-55 new specialty drugs will be launched annually over the next four years. Specialty drugs will continue evolving, helping cure or curb symptoms for patients with complex or chronic medical conditions. As new drugs hit the market and prices continue to rise, health plan sponsors will continue to look to their pharmacy benefit management markets (PBMs) to help address the cost and accessibility of prescription drugs.

The Growth Of Innovative PBM Pricing Strategies: The continued evolution of the pharmacy benefit management (PBM) market contracting model and pricing strategies is expected to continue. For example, to counteract the high prices of specialty drugs, PBMs are embracing outcomes-based contracting. According to a recent national healthcare consulting firm study, 58% of payers had entered outcomes-based contracts as of 2022. Another alternative PBM pricing strategy includes the growing use of innovative utilization tools.

U.S. PHARMACY BENEFIT MANAGEMENT MARKET HIGHLIGHTS

• The medicare plan of health plan segment is growing significantly, with the fastest-growing CAGR of 6.74% during the forecast period. The growth of this segment is attributed to several factors, which include a shift towards virtual care delivery, more home care, and the adoption of value-based care models.
• The insurance companies & retail pharmacies segment dominates the share with over 75% of the U.S. pharmacy benefit management (PBM) market. Many reasons, including the expanding access to testing and diagnosis and growing awareness among the general population across the U.S., contribute to the growth of this segment.
• The claim processing in the service segment is the fastest-growing in the U.S. pharmacy benefit management (PBM) market during the forecast period. The growth of this segment is mainly due to the benefits it offers from pharmacy benefit management (PBM) market claims auditing, which monitors payment integrity and fraud, waste, abuse of health plans, employers, Medicare Advantage Part D plans, brokers, Taft-Hartley funds, and other pharmacy plans.

REGIONAL ANALYSIS

The southern region dominated the segment of the U.S. pharmacy benefit management (PBM) market, with a share of 30% in 2023. The growth of this region is due to the presence of high rates of chronic disease and poor health conditions, as well as a high percentage of insurers in the southern states. Kentucky, West Virginia, Virginia, and Louisiana are the top states with a high percentage of insurers among the southern states in the U.S.

VENDOR LANDSCAPE

The U.S. pharmacy benefit management (PBM) market report includes exclusive data on 27 vendors. CVS Health, Cigna Healthcare, United Health Group, Prime Therapeutics, MedImpact, and Humana dominate the U.S. Pharmacy Benefit Management market. The major players focus on strategic acquisitions and collaborations with emerging players to enter the pharmacy benefit management market and gain a competitive advantage.