U.S. Pharmacy Benefit Management Industry

According to a recent report by Grand View Research, Inc., the U.S. pharmacy benefit management (PBM) market is projected to reach a valuation of USD 934.0 billion by 2030, expanding at a robust compound annual growth rate (CAGR) of 8.77% from 2023 to 2030. This significant growth is being primarily driven by the rising cost of healthcare in the country, the growing adoption of PBM services, and the increasing demand for prescription medications across various therapeutic areas.

Pharmacy benefit managers play a crucial role in the healthcare value chain by partnering with specialty pharmacies to help ensure better medication adherence among beneficiaries. These systems offer extensive knowledge and strategic relationships with pharmaceutical manufacturers, enabling the formation of advantageous drug contracting arrangements. For many payers, directly establishing value-based contracts with pharmaceutical companies can be a complex and resource-intensive process. As a result, PBMs often act as intermediaries or negotiators, securing considerable discounts on prescription drugs, which can be leveraged to reduce costs for both insurers and patients.

The trend of vertical integration between PBM organizations and major health insurance companies is reshaping the U.S. PBM landscape. Such integrations are expected to enhance PBMs' control over drug distribution channels, allowing them greater leverage in rebate negotiations. However, this consolidation may lead to a rise in drug list prices due to increased rebate activity, and potentially contribute to the formation of monopolistic structures within the market. This could result in concentrated market power, where a limited number of players dominate the sales and revenue streams, affecting pricing transparency and competitive dynamics.

Furthermore, the business of managing and insuring employee benefit programs—particularly healthcare-related benefits—is subject to extensive regulation by various federal and state authorities. These include the Department of Health and Human Services (HHS), State Departments of Insurance, Centers for Medicare & Medicaid Services (CMS), Internal Revenue Service (IRS), and the Department of Labor (DOL). These regulatory bodies establish policies that govern plan administration, pricing structures, and patient protections, all of which impact the operational framework of PBMs.

The growth of the U.S. PBM market is also being propelled by an increasing number of mergers, acquisitions, and strategic collaborations between PBM firms and health insurance providers. These partnerships aim to enhance the affordability and customization of health plans, enabling insurers to better cater to the diverse needs of their policyholders. In addition, the introduction of advanced benefit management services—such as comprehensive disease management programs, drug utilization review protocols, and integrated pharmacy-medical solutions—is expected to contribute positively to market expansion. These innovative offerings are designed to improve patient outcomes, optimize drug therapy, and reduce overall healthcare expenditures, further reinforcing the importance of PBMs within the healthcare delivery ecosystem.

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U.S. Pharmacy Benefit Management Market Segments Highlights:

• The standalone segment accounted for the largest revenue share in 2022 owing to the high number of claims processing by PBM. The health insurance segment is expected to witness a significant growth rate during the forecast period
• Based on end-use, the commercial segment accounted for the largest market share in 2022. The growth of the segment is attributed due to the proliferated usage of private insurance by the public and the increased cost of drugs
• In February 2022, Southern Scripts, one of the top PBM launched RxCompass, a new solution for mitigating the high cost of prescription drugs for companies and employees in the U.S.
• In July 2021, major insurers Humana and Anthem announced a partnership with SS&C, a software solutions provider to create a new PBM company named DomaniRx

U.S. Pharmacy Benefit Management Market Report Segmentation

Grand View Research has segmented the U.S. pharmacy benefit management market on the business model and end-use.

U.S. Pharmacy Benefit Management Business Model Outlook (Revenue, USD Billion, 2017 - 2030)

• Standalone PBM
• Health Insurance Providers
• Retail Pharmacy

U.S. Pharmacy Benefit Management End-Use Outlook (Revenue, USD Billion, 2017 - 2030)

• Commercial
• Federal

Key U.S. Pharmacy Benefit Management Company Insights

• CVS Health
• Optum, Inc.
• Cigna
• Medimpact
• Anthem
• Change Healthcare
• Prime Therapeutics LLC
• HUB International Limited
• Elixir Rx Solutions LLC

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