Pharmacy Benefit Management Services Market - Global Industry Analysis, Size, Share, Trends, Analysis, Growth, and Forecast 2022 - 2032
The pharmacy benefit management services market has been anticipated to reach a valuation of US$ 495.34 Bn and grow at a CAGR of 5.9% in the foreseeable years from 2021 to 2031.
The revenue generation opportunities in the pharmacy benefit management services market have been attributed to the increasing prevalence of chronic diseases around the world. In addition to this, increasing expenditure on healthcare facilities across developed and emerging economies around the world is likely to result in rising demand for the cost management of the prescription drugs. These factors are likely to bolster expansion opportunities in the pharmacy benefit management services market in the coming years.
In recent years, there has been a noticeable increase in the cost of drugs. These increased prices are predicted to stimulate demand and adoption of the PBM services. These factors are likely to serve as revenue generators in the pharmacy benefit management services market in the coming years.
Increasing initiatives, for instance, strengthening the distribution network and extension of the mail order delivery services in the remote areas are expected to increase the adoption of the pharmacy benefit management market services. These initiatives are estimated to propel growth impetuses in the pharmacy benefit management services market in the near future.
Serving as a middleman between drug manufacturers, pharmacies, and healthcare insurance companies, vendors operating in the global pharmacy benefit management services market could be advantaged by the rising costs of several drugs. Insurance companies and insurers are expected to heavily rely on pharmacy benefit management services to lower drug costs. Moreover, pharmacy benefit management services are considered as key players in the overall healthcare space, which could raise their value even more.
Vendors are recommended to cash in on the various revenue streams available to make profit in the global pharmacy benefit management services market. These could be service fees for operating mail-order pharmacies, processing prescriptions, and negotiating with drug manufacturers, insurance companies, and pharmacies. The negotiation power could be strengthened by establishing contracts with some of the largest insurance companies in healthcare. As a result, new contracts are anticipated to bolster the growth of pharmacy benefit management services with up to a double-digit boost to stock price.
As more number of pharmacy benefit management services enter into contracts with insurers, the competition in the global market is prognosticated to aggravate further. Since consolidation allows participants to fortify their negotiation power and increase in size, there could be a telling number of mergers and acquisitions in the global pharmacy benefit management services market. Owing to inherent synergies between them, pharmacy benefit management services and pharmacies could also enter into consolidation. Pharmacy benefit management services are prophesied to create a network of retail pharmacies for distributing drugs by negotiating contracts with different pharmacies.
Pharmacy benefit management services play an integral role in the healthcare industry, with its unique function of administrating pharmacy products, and focusing on real time interaction between various entities. The key trends of this process are governed by laws and regulations. The various functions of pharmacy benefit management services are: process and payment of prescription drugs, development and maintenance of formulary, negotiation of discounts, contracting with pharmacies, and rebates with drug manufacturers. These services are provided with the help of different tools that help to target specific problems for intervention, and most of the times are customized on the basis of client’s requirement.
The different tools that are used in pharmacy benefit management services are: pharmacy networks, mail service pharmacies, formularies, electronic prescribing, manufacturer discounts, clinical management, and pharmacy discount cards. The factors driving the pharmacy benefit management services market are Medicare’s emerging models of care integrate pharmacy, and execution and escalation of drug benefit programs. Although high upfront cost and low awareness related to the system is restraining the growth of the pharmacy benefit management services market.
The most integral and highly preferred applications of pharmacy benefit management services are member’s administration, formulary management, E-prescribing, and E-dispensing, accompanied with processing of claims. Thus, formulary management lists approved prescription medications that abide to specific protocols, and are arranged on the basis of served programs. E-prescribing and E-dispensing are highly important elements of pharmacy benefit management program, as most of the misplacements and drug abuse cases are a result of error in prescriptions and dispensing.
Geographically, North America is the largest market for pharmacy benefit management due to the availability of modern healthcare information technologies, government support, and efficient infrastructure. The high awareness about wellbeing, health, and high expenditure capacity of patients, would indirectly act as a driving factor for the growth of pharmacy benefit management services in the European and North American market.
One of the industry trends observed was the proliferation of healthcare facilities and institutes from Asia Pacific region, catering to clinics and institutions, particularly large hospitals. The increasing density of population in Asia demands well integrated, time-efficient, and accurate drug dispensing services, majorly focused in China, India, Japan, and South Korea. Hence, emerging economies such as China and India are the key regional markets in the overall Asia Pacific market.
The Rest of the World is also observed to be another potential market during the forecast period from 2014 to 2020. The potential economies such as South Africa, Argentina, Brazil and Middle-Eastern Countries, were observed to be the emerging untapped markets for the application of this technology.
The companies operating in the pharmacy benefit management services market are: Express Script, Cigna, CVS Health, and Catamaran among others.
CVS health is the only pharmacy chain with its own services arm and owned 30% share in the managed medicaid market in the year 2014, with an estimated growth of 40% through 2016. The applications of pharmacy benefit management services are expected to be the leading driving factor for overall development and rising market share of CVS Health in the U.S.
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