by The Pharmacy Benefit Management market is estimated to be valued at US$ 858.38 Bn or Mn in 2023 and is expected to exhibit a CAGR of 6.0% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Pharmacy benefit management refers to the development and administration of prescription drug benefits offered through public and private healthcare programs. It includes negotiating contracts with pharmaceutical companies, managing prescription drug lists, performing drug utilization review, and developing programs to promote cost-effective drug therapies. PBMs help reduce prescription drug costs and ensure the availability of affordable medicines to individuals and employers.
Market Dynamics:
The growth of the pharmacy benefit management market is driven by rising healthcare expenditure globally. According to the World Bank, the global current health expenditure increased from $7.8 trillion in 2016 to $8.3 trillion in 2017. This is indicative of increasing healthcare spending across various countries. Furthermore, advancements in formulary management solutions and rising awareness about cost-effective drug prices are also expected to fuel market growth over the forecast period. However, lack of transparency in rebate systems and monopoly of select players pose challenges to market players. nonetheless, increasing penetration of generic drugs and adoption of artificial intelligence-driven analytical solutions is expected to create lucrative growth opportunities for players in the global pharmacy benefit management market.
SWOT Analysis
Strength:
– Large patient coverage: The pharmacy benefit managers provide access to prescription drugs to many patients through their network of pharmacies, providing economies of scale.
– Cost control capabilities: They can leverage their buyer power to negotiate discounts and rebates from drug manufacturers and pharmacies to help reduce costs for health plans and employers.
– Advanced IT infrastructure: PBMs have developed advanced IT systems to efficiently process and adjudicate claims at large volumes, which also helps improve formulary management.
Weakness:
– Conflicts of interest: PBMs operate mail-order pharmacies of their own, which can create conflicts of interest in terms of steering customers and reimbursing independent pharmacies.
– Lack of transparency: There is lack of visibility into how PBMs derive their profits and how they allocate rebates between health plans and other parties.
Opportunity:
– Specialty drug management: As specialty drugs become a larger portion of drug spend, PBMs can offer management of high-cost specialty medications along with the traditional medical benefit.
– Data and analytics capabilities: PBMs are well positioned to provide health plans with insights generated from their vast prescription drug claims databases to support value-based reimbursement models.
Threats:
– Regulatory scrutiny: PBM practices face increased regulatory scrutiny over lack of transparency in transactions and conflict of interest concerns.
– Disruption from new entrants: Non-traditional players like Amazon entering the pharmacy space threatening incumbent PBM and pharmacy businesses.
Key Takeaways
The Global Pharmacy Benefit Management Market Growth is expected to witness high growth, exhibiting CAGR of 6.0% over the forecast period, due to increasing healthcare cost containment efforts. Pharmacy benefit managers facilitate cost savings for payers and patients through their negotiating power and use of advanced IT systems.
Regional analysis
North America represents the dominant regional market for pharmacy benefit management, with United States accounting for the major share. This is attributed to the large size of insured population and employer-sponsored health plans in the US that rely on PBM services. Asia Pacific is expected to grow at the highest CAGR during the forecast period due to rising healthcare expenditure and growing medical insurance penetration in major APAC countries.
Key players related content
Key players operating in the Pharmacy Benefit Management market are CVS Health, SS&C Technologies, Inc.,Anthem Inc., Medimpact, Express Scripts Holding Company, Benecard, Services, LLC, CaptureRx Inc., Change Healthcare, OptumRx, Inc., Cigna. These players have established nationwide pharmacy networks and focus on service expansion and development of innovative software solutions to consolidate their market position.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
Ravina Pandya, a content writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemicals and materials, etc. With an MBA in E-commerce, she has expertise in SEO-optimized content that resonates with industry professionals.
