Technology proliferation has brought significant transformation in business operations and processes resulting in enhanced efficiency and delivery turnaround time. Shifting preference of service providers from traditional workflow towards advanced workflow by leveraging new technologies such as machine learning has been witnessed recently. This has triggered the adoption of services apropos to pharmacy benefit management across various end use industries such as insurance, drug manufacturing and retail pharmacy chains.
Backed by technological advances and its deployment in the pharmacy benefit management space, companies are now able to establish a streamlined supply chain. With this development, they are able to offer quick mail order deliveries and also cater to growing needs of large customer pool across retail pharmacy chains and other sectors in less time. This factor remains instrumental in driving sales of pharmacy benefit management services worldwide, in turn contributing to the growth of the market. Moreover, inflation in drug prices since the recent past coupled with increasing prevalence of chronic diseases has severely impacted healthcare spending and the overall sector. This necessitated the adoption of advanced systems in turn favouring the growth of the pharmacy benefit management market.
Study says that the global pharmacy benefit management market is projected to grow at a rate of more than 5% in the next seven years to approximately touch US$ 750 billion from a valuation of around US$ 460 billion in 2021.
COVID 19 impact on the Pharmacy Benefit Management Market
COVID 19 pandemic embossed a “wait and watch” impact on the pharmacy benefit management market. Various companies such as Cigna and OptumRx Inc. reported a noteworthy increase in their yearly revenue. However, post COVID vaccination drives coupled with availability of low priced medication, their revenue quotient decreased significantly. For instance, in 2020, OptumRx Inc. witnessed an increase in revenue by around 17%, which fell to about 4% in 2021. Likewise, same year, Cigna witnessed a 20% increase in revenue which fell to 14% in 2021.
In addition, growing healthcare expense owing to expensive specialty drugs and vaccines augmented then need for price management for OTC and prescription drugs. In this backdrop, a large number of insurance providers have been relying on such service providers to gain negotiations on drug price from retail pharmacies in order to reduce the price of listed drugs in insurance coverage. That said, increasing initiatives such as extending mail order deliveries and streamlining supply chains by companies and rising use of specialty drugs is expected to bode well for the pharmacy benefit management market.
Increasing Pharmaceutical Expenses to Bolster Growth of Pharmacy Benefit Management Market
Increasing occurrence of chronic diseases worldwide has put immense pressure on pharmaceutical companies to develop advanced formulations and medications. Various pharmaceutical majors have been involved in manufacturing effective drug formulations to treat chronic disorders. However, owing to high prices associated with such formulations and medications has resulted in increased spending on pharmaceuticals since recent past. For instance, according to ICER (Institute for Clinical and Economic Review), in United States, apart from top drugs with high pricing in 2020, there were seven prescription drugs with unsupported price increases which had substantial impact on the US spending. Thus, increasing in drug prices coupled with significant rise in prescription filings has resulted in rising demand for management of drug costs, in turn bolstering growth of the market.
Specialty Pharmacy Services to Largely Contribute Towards Pharmacy Benefit Management Market Growth
Increasing prevalence of chronic disorders has translated into growing demand for specialty drugs and formulations for effective treatment. However, high prices associated with specialty drugs have made them unaffordable for majority of patient population. This has pushed the use of pharmacy benefit management to reduce the cost of specialty drugs in order to make them affordable and available to a large patient pool. That said, the use of pharmacy benefit management in specialty pharmacy services is expected to increase in the coming years.
North America Likely to Account for a Significant Share in the Pharmacy Benefit Management Market
Developed economies in North America are poised to account for a major share in the market. This is mainly attributed towards presence of huge patient pool under medical coverage, growing number of pharmacy benefit managers (PBMs) and favourable government initiatives and regulations for PBMs. For instance, as per National Association of Insurance Commissioners, there were about 66 pharmacy benefit management companies in United States in 2021. In addition, increasing pharmaceutical spending and increasing prescription filing backed by increasing GDP per capita has further fuelled the demand for pharmacy benefit management services, in turn pacing potential avenues of growth.
Pharmacy Benefit Management Market: Competitive Landscape
Key players in the market are involved various growth strategies such as collaborations, acquisitions, new product launches and mergers to gain market position. For instance, in 2020, Anthem Inc. introduced IngenioRx that facilitates personalization of member experiences by leveraging clinical expertise. On the other hand, in 2022, Magellan Health Inc. was acquired by Centene Corporation. This acquisition was mainly to provide integrated healthcare solutions for optimum health outcomes.
Few of the key players in the pharmacy benefit management market include CVS Health, OptumRx Inc., Medimpact, Centene Corporation, Cigna and Anthem Inc.
Global Pharmacy Benefit Management Market is Segmented as Below:
By Service Type
By Business Model
By End User
Key Elements Included In The Study: Global Pharmacy Benefit Management Market
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