Los Angeles, CA (PRWEB) July 20, 2012
Pharmacy benefit managers (PBMs) play a crucial part in the US healthcare system by influencing the prescription drugs Americans can get, from whom they get them and what they cost. Over the five years to 2012, IBISWorld industry analyst Doug Kelly estimates that rising drug costs, higher consumer spending on healthcare and rising prescription drug use increased revenue for the Pharmacy Benefit Management industry at a 0.9% average annual rate to about $226.6 billion in 2012. Rising drug costs increased demand for industry cost management services from plan sponsors and drove industry firms to consolidate to better leverage larger retail pharmacies, customer networks and drug use data to negotiate deeper cost savings with drug manufacturers.
“The aging of the population and higher rates of chronic disease also drove up health spending and consumer prescription drug use, but industry growth was dampened by weak prescription drug spending during the recession,” says Kelly. Higher unemployment levels, decreases in private insurance coverage and lower consumer disposable incomes caused consumers to cut back on medical-related costs and opt for cheaper generics and over-the-counter medications instead of higher-priced brand name drugs. However, IBISWorld anticipates that further increases in drug manufacturing costs, consumer health spending, prescription drug use and expanded prescription drug plan enrollment will increase industry revenue 1.5% in 2012. The Pharmacy Benefit Management industry is highly concentrated in the hands of its major players – Medco Health Solutions, CVS Caremark, Express Scripts Inc. and UnitedHealth Group Inc. – which control almost the entirety of industry revenue.
Growth prospects for PBMs are strong. Over the five years to 2017, IBISWorld projects industry revenue to increase. The 2010 Patient Protection and Affordable Care Act will expand prescription drug coverage, which will boost prescription drug use and industry fees as a result. Industry consolidation will continue to grow the size and clout of PBMs who promote drug therapies as a cheaper alternative to expensive medical treatments like surgery, thereby further increasing prescription drug use and industry revenue. For more information, visit IBISWorld’s Pharmacy Benefit Management in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
This industry includes firms that provide pharmacy benefit management (PBM) services. Industry firms are third-party administrators of government and employer-sponsored prescription drug programs. They are primarily responsible for processing and paying prescription drug claims.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.