Pharmacy Benefit Management in the US Industry Market Research Report Now Available from IBISWorld

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Though it felt the recession's effects, the Pharmacy Benefit Management industry has recovered quickly and is poised to grow on the back of rising insurance coverage and increased physician visits, which will yield a higher number of prescriptions filled. As the median age of the US population continues to rise, more Americans will rely on medications, increasing demand for the industry's services from insurers and employer-sponsored coverage plans. As more patients choose generics over more expensive brand names, however, industry profit margins are expected to make little progress in the coming years. For these reasons, industry research firm IBISWorld has added a report on the Pharmacy Benefit Management industry to its growing industry report collection.

IBISWorld Market Research

IBISWorld Market Research

Higher consumer health spending and drug use will help industry revenue grow through 2017

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.

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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.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

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 or call 1-800-330-3772.

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Gavin Smith
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