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Pharmacy Benefit Management in the US Industry Data and Analysis
Since its inception in the 1960s, the Pharmacy Benefit Management (PBM) industry has evolved into one of the most central players in the pharmaceutical supply chain in the US. Responsible for administering prescription drug benefits, PBM providers have grown in parallel with the leading drug manufacturers and health insurers in recent years as patients' use of pharmaceuticals has grown. Alongside this growth has come massive consolidation activity; horizontal integration over decades brought the number of PBMs down to 30 in 2016, with a spike in vertical integration activity in 2018 completely restructuring the industry. Today, the three leading PBMs are vertically integrated behemoths responsible for over 80.0% of all prescription claims in the US, on average. However, this vertical integration has captured the attention of regulators and policymakers concerned about anticompetitive practices and misaligned incentives. In all, revenue is forecast to expand at a CAGR of 5.6% to $638.0 billion through 2025, including expected growth of 8.6% in 2025 alone.Regulators' spotlight on PBMs' power to control what health plans and patients pay for prescription medications is growing. Legislation is pending in over 40 states to reform how PBMs operate, focusing on transparency on drug rebates from manufacturers and spread pricing. An antitrust probe into the PBM industry by the Federal Trade Commission is also ongoing. Challenges confronting the industry don't stop there, with emerging approaches to prescription drugs introducing pressures. Amazon Pharmacy's RxPass and Cost Plus Drugs sidestep the middleman and offer prescription drugs directly to consumers at cash rates. These pharmaceutical providers' transparency raises more questions about the leading PBMs' secrecy.Disruption building in the PBM industry in recent years will come to a head moving forward. While it remains uncertain how mounting concerns and FTC inquiries will shape the industry's future, they will undoubtedly change how PBMs operate. One trend expected to accelerate its disruption of the industry will be the growth of cash-pay pharmacies like CPD. Regardless, the role of PBMs will remain crucial in the pharma supply chain, with demand for generics and specialties expanding as the population ages. Revenue will continue growing, increasing at a CAGR of 1.4% through 2030 to reach an estimated $684.3 billion.
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What's included in this industry analysis
IBISWorld's research coverage on the Pharmacy Benefit Management industry in the United States includes market sizing, forecasting, data and analysis from 2015-2030. The most recent publication was released October 2025.
About this industry
What's this industry report about?
The Pharmacy Benefit Management industry in the United States operates under the NAICS industry code OD4620. Pharmacy benefit management (PBM) providers act as intermediaries between insurers, pharmacies and patients in managing prescription drug benefits. They negotiate pricing, process claims, develop formularies and offer clinical programs. PBMs aim to control medication costs, ensure access and improve patient adherence and health outcomes. Related terms covered in the Pharmacy Benefit Management industry in the United States include formulary, spread pricing, tiered pricing, prior authorization, generic substitution and usual and customary rates.
What's included in this industry?
Products and services covered in Pharmacy Benefit Management industry in the United States include Retail pharmacy services, Specialty pharmacy services and Other services.
What companies are included in this industry?
Companies covered in the Pharmacy Benefit Management industry in the United States include Cigna Corp, Cvs Health Corporation and Unitedhealth Group Incorporated.
Performance
What's included in the Performance chapter?
The Performance chapter covers detailed analysis, datasets, detailed current performance, sources of volatility and an outlook with forecasts for the Pharmacy Benefit Management industry in the United States.
Questions answered in this chapter include what's driving current industry performance, what influences industry volatility, how do successful businesses overcome volatility, what's driving the industry outlook. This analysis is supported with data and statistics on industry revenues, costs, profits, businesses and employees.
Products & Markets
What's included in the Products and Markets chapter?
The Products and Markets chapter covers detailed products and service segmentation and analysis of major markets for the for the Pharmacy Benefit Management industry in the United States.
Questions answered in this chapter include how are the industry's products and services performing, what are innovations in industry products and services, what products or services do successful businesses offer and what's influencing demand from the industry's markets. This includes data and statistics on industry revenues by product and service segmentation and major markets.
Geographic Breakdown
What's included in the Geographic Breakdown chapter?
The Geographic Breakdown chapter covers detailed analysis and datasets on regional performance of the Pharmacy Benefit Management industry in the United States.
Questions answered in this chapter include where are industry businesses located and how do businesses use location to their advantage. This includes data and statistics on industry revenues by location.
Competitive Forces
What's included in the Competitive Forces chapter?
The Competitive Forces chapter covers the concentration, barriers to entry and supplier and buyer profiles in the Pharmacy Benefit Management industry in the United States. This includes data and statistics on industry market share concentration, barriers to entry, substitute products and buyer & supplier power.
Questions answered in this chapter include what impacts the industry's market share concentration, how do successful businesses handle concentration, what challenges do potential industry entrants face, how can potential entrants overcome barriers to entry, what are substitutes for industry services, how do successful businesses compete with substitutes and what power do buyers and suppliers have over the industry and how do successful businesses manage buyer & supplier power.
Companies
What's included in the Companies chapter?
The Companies chapter covers Key Takeaways, Market Share and Companies in the Pharmacy Benefit Management industry in the United States. This includes data and analysis on companies operating in the industry that hold a market share greater than 5%.
Questions answered in this chapter include what companies have a meaningful market share and how each company is performing.
External Environment
What's included in the External Environment chapter?
The External Environment chapter covers Key Takeaways, External Drivers, Regulation & Policy and Assistance in the Pharmacy Benefit Management industry in the United States. This includes data and statistics on factors impacting industry revenue such as economic indicators, regulation, policy and assistance programs.
Questions answered in this chapter include what demographic and macroeconomic factors impact the industry, what regulations impact the industry, what assistance is available to this industry.
Financial Benchmarks
What's included in the Financial Benchmarks chapter?
The Financial Benchmarks chapter covers Key Takeaways, Cost Structure, Financial Ratios, Valuation Multiples and Key Ratios in the Pharmacy Benefit Management industry in the United States. This includes financial data and statistics on industry performance including key cost inputs, profitability, key financial ratios and enterprise value multiples.
Questions answered in this chapter include what trends impact industry costs and how financial ratios have changed overtime.
Industry Data
What's included in the Industry Data chapter?
The Industry Data chapter includes 10 years of historical data with 5 years of forecast data covering statistics like revenue, industry value add, establishments, enterprises, employment and wages in the Pharmacy Benefit Management industry in the United States.
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Frequently Asked Questions
What is the market size of the Pharmacy Benefit Management industry in the United States in 2026?
The market size of the Pharmacy Benefit Management industry in the United States is $638.0bn in 2026.
How many businesses are there in the Pharmacy Benefit Management industry in the United States in 2025?
There are 87 businesses in the Pharmacy Benefit Management industry in the United States, which has grown at a CAGR of 3.9 % between 2020 and 2025.
How may import tariffs affect the Pharmacy Benefit Management industry in the United States?
The Pharmacy Benefit Management industry in the United States is unlikely to be materially impacted by import tariffs with imports accounting for a low share of industry revenue.
How may export tariffs affect the Pharmacy Benefit Management industry in the United States?
The Pharmacy Benefit Management industry in the United States is unlikely to be materially impacted by export tariffs with exports accounting for a low share of industry revenue.
Has the Pharmacy Benefit Management industry in the United States grown or declined over the past 5 years?
The market size of the Pharmacy Benefit Management industry in the United States has been growing at a CAGR of 5.6 % between 2020 and 2025.
What is the forecast growth of the Pharmacy Benefit Management industry in the United States over the next 5 years?
Over the next five years, the Pharmacy Benefit Management industry in the United States is expected to grow.
What are the biggest companies in the Pharmacy Benefit Management industry in the United States?
The biggest companies operating in the Pharmacy Benefit Management industry in the United States are Cigna Corp, Cvs Health Corporation and Unitedhealth Group Incorporated
What does the Pharmacy Benefit Management industry in the United States include?
Processing network revenue prescriptions and Processing home delivery and specialty prescriptions are part of the Pharmacy Benefit Management industry in the United States.
Which companies have the highest market share in the Pharmacy Benefit Management industry in the United States?
The company holding the most market share in the Pharmacy Benefit Management industry in the United States is Cigna Corp.
How competitive is the Pharmacy Benefit Management industry in the United States?
The level of competition is moderate and increasing in the Pharmacy Benefit Management industry in the United States.
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