Two years ago, I highlighted a new dataset of pharmacy benefit companies that showed a robust PBM market. Updating that dataset gives us a look at how the landscape has changed. Indeed, a fresh look at the pharmacy benefit company industry shows it’s evolving. Last year, on The Pharmacy Benefit podcast, titled “Competition in the PBM Marketplace,” PCMA President and CEO JC Scott interviewed two CEOs, Abarca’s Jason Borschow and Maxor’s Mike Ellis. Both said that PBM competition is healthy, with Jason describing the market as more competitive now than 15 years ago.
In 2023, there are 73 full-service pharmacy benefit companies in the marketplace.
Contrary to the popular narrative that there are just a few pharmacy benefit companies in the marketplace, there are 73 full-service pharmacy benefit companies today. However, this topline number masks some interesting developments in the marketplace.
RESEARCH SHOWS US
The PBM market is dynamic, diverse, and continues to grow. As of March 2023, there are:
Full service pharmacy benefit companies.
6
New full-service pharmacy benefit companies since 2021.
In just two years, six new pharmacy benefit companies entered the marketplace, an almost nine percent increase. The increase in the number of PBMs here matches the increase we saw in the previous dataset with six new pharmacy benefit companies in two years from 2019 to 2021. In 2019, we had a baseline number of 66 full-service PBMs in the marketplace. We added six new companies for our 2021 count and an additional six companies for our 2023 count. Twelve new pharmacy benefit companies in four years are an 18 percent increase in new full-service PBMs.
And lest anyone believe that I can’t do basic math, it is true that 66 plus 12 does not equal 73. I’ve previously described the increase from 66 to 70, so here I will limit discussion to the changes from 2021 to 2023, ending with 73 full-service pharmacy benefit companies.
“I’ve been in the PBM industry for 15 years, it’s very competitive. It’s probably more competitive now compared to then."
- Jason Borschow, Abarca
In 2021, we counted 70 full-service pharmacy benefit companies, and as previously stated, six new ones have entered the marketplace over the last two years. Eight pharmacy benefit companies were acquired by other PBMs – largely through mergers between small or midsize companies, so we are no longer including these in the count. And finally, five pharmacy benefit companies that previously had not been considered “full-service” have added services and now in the count. The math here becomes 70+6-8+5=73.
One big takeaway from these numbers is how dynamic the pharmacy benefit company
marketplace is both changing and expanding. New companies entering the market create additional competitors and help drive innovation. Not all pharmacy benefit companies are the same. They distinguish themselves through the choices they offer to payers and patients. But what they all have in common is securing affordable and accessible prescription drugs for employers, labor unions, governments, payers, patients, and taxpayers.
PBM business models vary, but in general, they do the following:
Secure prescription drug savings for employers and other health plan sponsors, patients, and taxpayers.
Enable better health outcomes for patients by supporting patient safety and drug adherence through clinical programs and technology.
Provide health plan sponsors a range of choices for quality prescription drug coverage.
The number of companies operating in the market is an important reminder that PBM customers have a number of choices when choosing which company to work with on their pharmacy benefits. And as the number of companies in the marketplace increases, this creates more pharmacy benefit companies competing for business and more choices for employers, labor unions, and other customers.
