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Pharmacy Benefit Management Market Size, Share & COVID-19 Impact Analysis, By Service (Specialty Pharmacy Services, Benefit Plan Design & Administration, Pharmacy Claims Processing, Formulary Management, and Others), By Service Provider (Insurance Companies, Retail Pharmacies, and Standalone PBMs), and Regional Forecast, 2022-2029

Region : Global | Format: PDF | Report ID: FBI103496



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The global pharmacy benefit management market size was USD 468.38 billion in 2021 and is projected to grow from USD 495.34 billion in 2022 to USD 740.05 billion by 2029, exhibiting a CAGR of 5.9% during the forecast period. Based on our analysis, the global market exhibited a higher growth of 9.6% in 2020 as compared to 2019. The global COVID-19 pandemic has been unprecedented and staggering, with experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels.

Pharmacy benefit management companies exist among the insurance providers and pharmacy stores & drug manufacturers. They negotiate with drug manufacturers and retail pharmacies for managing generic and branded drug spending. The rising prevalence of chronic diseases and increasing healthcare expenditure in developed and emerging countries are resulting in the growing demand for cost management of prescription drugs. This leads to a boost in demand for these services in the global market.

Additionally, drug price inflation in recent days has impacted healthcare spending, leading to increased adoption of these services among health insurance providers. Hence, the rising prevalence of chronic diseases, coupled with drug price inflation, has been instrumental in propelling the pharmacy benefit management market growth.

  • For instance, according to a research report by KAISER FAMILY FOUNDATION, it was reported that the drug cost of around 17.0% of the total medicare part D and part B drugs increased by more than 7.5% in 2020 as compared to the previous year.

Thus, a significant increase in the drug cost is fueling the demand and adoption of PBM services and is further augmenting the market growth during the forecast period.


High Priced COVID-19 Vaccine and Specialty Drugs Led to Demand for Pharmacy Benefit Management Services

The COVID-19 pandemic had a positive impact on the pharmacy benefit management market. Several major players, including OptumRx, Inc. and Cigna reported a significant increase in their revenue. However, due to the completion of vaccination drives in majority of the countries along with the availability of a wide range of medication at a lower price, the revenue of key companies operating in the market returned to the pre-pandemic level by 2021.

  • For instance, OptumRx, Inc. experienced an increase of 17.8% in revenue in 2020, whereas it witnessed an increase of only 4.4% in 2021 as compared to the previous year. Also, Cigna, reported an increase of 20.4% in the revenue from its Evernorth segment in 2020 and experienced a 14.2% increase in 2021 compared to the preceding year.

Additionally, increasing healthcare expenditure due to the introduction of expensive specialty drugs and COVID-19 vaccines globally augmented the demand for price management of prescription and OTC drugs. For instance, according to the Centers for Medicare & Medicaid Services, in December 2021, it was reported that the total national health expenditure in the U.S. increased to USD 4.1 trillion in 2020, which was a growth of 9.7% as compared to the previous year. Thus, a significant number of insurance providers are relying on the service providers to negotiate the drug price with retail pharmacy units and lower the price of the listed drugs in the insurance coverage.

Furthermore, increasing initiatives, such as extending mail order delivery services and strengthening distribution network in remote areas, were responsible for the growing adoption of these services. Hence, these initiatives by the major players coupled with increasing demand for specialty drugs boosted the pharmacy benefit management market growth during the COVID-19 pandemic.


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Increasing Adoption of Machine Learning to Smoothen Workflow

The rising adoption of pharmacy benefit management services among the insurance provider, retail pharmacy chains and drug manufacturers are shifting the preference of the service providers from conventional workflow to advance workflow by utilizing machine learning. As a result, the companies are able to provide a streamlined supply chain, quick mail order delivery and cater to a large number of insurance and retail pharmacy chains within a short period.

For instance, CAPITAL RX, a prominent player in the U.S., is utilizing machine learning and artificial intelligence (AI) algorithms to reduce human error and reduction in time for the claim processing. Thus, the integration of machine learning and AI technology into the workflow is leveraging the companies to drive down the medical cost and increase the efficiency of the coverage procedures.


Increasing Pharmaceutical Expenses Led to Market Growth

The rising prevalence of chronic diseases among the global population is giving rise to the increasing demand for treatment options. As a result, numerous large pharmaceutical companies are concentrating their efforts on developing high-cost branded medications for the treatment of chronic diseases. This led to an increase in the pharmaceutical spending significantly in the past few years.

  • For instance, according to a report published in Pharmaceutical Technology, drug prices in the U.S. increased by 4.0% in 2021, breaking a trend of a slow rise in previous years. Also, according to the SingleCare Administrators, the price of individual prescription drugs increased by 5% in 2021.

This, along with an increasing number of prescription filings in recent years for a wide range of chronic diseases, including cardiovascular diseases, chronic lung diseases and others, are increasing the healthcare expenditure. For instance, according to a survey report by SingleCare Administrators in 2022, an estimated 4 billion prescriptions are dispensed each year in the U.S. and is further expected to experience a significant hike in the count of prescription filing within a few years.

Thus, a significant rise in the drug cost, along with an increase in the number of prescription filing globally, is leading to an increase in the health care burden. This has resulted in increased demand and adoption for these services to reduce drug costs and manage pharmaceutical spending around the world, and aid market expansion during the study period.


Lack of Transparency in Profit Earnings Responsible for Restricting Adoption

An increasing amount of drug spending and a growing number of prescription filing globally are key factors driving the pharmacy benefit management market growth. However, transparency issues associated with business models are always a source of concern in the pharmacy benefit management services. The revenue sources of these services are rarely disclosed to the insurance provider, retail pharmacy units or drug manufacturers. As a result, a large proportion of drug costs goes to the service providers.

  • For instance, according to a research article by Berkeley Research Group in January 2022, it was reported that more than half of total spending on brand medicines goes to the supply chain, including pharmacy benefit managers, rather than the drug manufacturers.

Thus, drug manufacturers and insurance providers are experiencing a significant decrease in profit. As a result, the majority of the insurance providers abandon the concept of collaborating with PBMs, while those who have yet to do so feel reluctant. Hence, the adoption rate of these services is reducing and is anticipated to hinder the market growth during the study period.


By Service Analysis

Rising Demand for Specialty Medicines Resulted for Segmental Dominance in 2021

The specialty pharmacy services segment accounted for the highest market share in 2021. The rising prevalence of chronic and rare diseases is resulting in the increasing demand for treatment options, such as specialty drugs. However, high-priced drugs are unaffordable for the majority of the patient population. This leads to the growing demand for these services to decrease the price of specialty drugs to an affordable range. This leads to the dominance of the specialty pharmacy services segment among other services.

On the other hand, the benefit plan design & administration segment is expected to grow with the highest CAGR. One of the major factors attributed to the highest CAGR of this segment is the increasing number of patients opting for medical insurance coverage and benefit plan design for their medical treatment. For instance, according to the Indian Express [P] Ltd., the number of people in India opting for a medical insurance policy with a higher sum insured covered has increased from 30.0% in March-May 2020 to 80.0% in March-May 2021.

By Service Providers Analysis

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Consolidation between Insurers and PBM Service Providers Led to Major Dominance of Insurance Companies Segment

Based on service provider, the insurance companies segment dominated the market. An increasing number of mergers and acquisitions between insurance companies and PBM service providers is leading to segmental dominance during the forecast period. For instance, in October 2021, First Medical Health Plan, Inc. renewed and extended its partnership with Abarca Health LLC., for pharmacy benefit management services for an additional three years with a novel financial model.

The retail pharmacy segment is anticipated to grow with the highest CAGR during the study period. An increasing number of retail pharmacy units and the entrance of big companies, including Amazon & Walmart in the retail pharmacy chain are some of the major key factors responsible for the rapid growth of this segment during the forecast period.


The pharmacy benefit management market size in the U.S. stood at USD 454.25 billion in 2021. The presence of a large patient population under medical coverage, availability of favorable government regulations for pharmacy benefit managers, and the increasing number of pharmacy benefit managers in the country are prominent factors for the regional dominance.

  • For instance, according to a report by the National Association of Insurance Commissioners, in March 2021, there were around 66 PBM companies in the U.S. serving more than 270.0 million Americans.

Canada is expected to grow with the highest CAGR during the forecast period. An increasing amount of pharmaceutical spending and a growing number of prescription filing in Canada are leading to an increase in demand for these services in this country. For instance, according to a report by the Government of Canada, Canadian public drug plans witnessed an expenditure of USD 12.5 billion on prescription drugs in the 2019-20 period, which was an increase of 3.7%. Along with this, expansion of network by key market players in Canada is anticipated to foster the adoption rate of these services during the study period.

The Rest of the World market is anticipated to grow with a significant CAGR during the forecast period. An increasing number of health awareness programs and rising number of health plans offerings by insurance providers in Brazil and South Africa are anticipated to boost the adoption rate of pharmacy services. Therefore, this will propel the demand and adoption of these services and substantially boost the market growth during the 2022-2029 period.


Inorganic Growth Strategies by Key Players Led to Market Dominance

The pharmacy benefit management market is dominated by a few major players such as CVS Health, OptumRx, Inc., and Cigna. Constant focus on the inorganic growth strategies, including partnership and acquisition of other players to expand the brand presence, are some of the key contributing factors to market dominance. For instance, in December 2019, OptumRx, Inc. acquired Diplomat, a provider of specialty pharmacy and infusion services with an aim to lower the overall total cost of care and expand its portfolio.

On the other hand, prominent players, including Medimpact, Anthem, Inc., and other companies are focusing on introducing new solutions and features to expand their portfolio and increase customer reach. For instance, in September 2020, Medimpact introduced a new solution to integrate prescription discount card saving with a traditional plan. The other key players operating in the market are Centene Corporation Abarca Health LLC.



  • January 2022 Centene Corporation acquired Magellan Health, Inc. to provide whole-health, integrated healthcare solutions with better health outcomes at lower costs.

  • May 2020 – Anthem, Inc. launched IngenioRx, an innovative pharmacy benefits manager that uses clinical expertise and a digital-first approach to personalize member experiences. This launch helped the company to increase customer reach and company revenue.


An Infographic Representation of Pharmacy Benefit Management (PBM) Market

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The pharmacy benefit management market report provides a detailed analysis of the industry and focuses on key aspects such as leading companies, services, and service providers. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the market report encompasses several factors that have contributed to the growth of the market in recent years.

Report Scope and Segmentation:



Study Period


Base Year


Estimated Year


Forecast Period


Historical Period



Value (USD billion)


Service, Service Provider, and Country/Region

By Service

  • Specialty Pharmacy Services

  • Benefit Plan Design & Administration

  • Pharmacy Claims Processing

  • Formulary Management

  • Others

By Service Provider


  • Insurance Companies

  • Retail Pharmacies

  • Standalone PBMs

By Country/Region

  • U.S.

  • Canada

  • Rest of World

Frequently Asked Questions

Fortune Business Insights says that the global market stood at USD 468.38 billion in 2021 and is projected to reach USD 740.05 billion by 2029.

In 2021, the U.S. market value stood at USD 454.25 billion.

In 2021, the global market share of the specialty pharmacy services segment was 34.0%.

The market will exhibit steady growth at a CAGR of 5.9% during the forecast period (2022-2029).

By service, the specialty pharmacy services segment is leading the market.

Increasing pharmaceutical expenses and increasing number prescription filing are the key drivers of the market.

CVS Health, OptumRx, Inc., and Cigna are the top players in the market.

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