The US Pharmacy Benefit Management (PBM) Industry Report: 2013 Edition – New Report by Koncept Analytics
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The US Pharmacy Benefit Management (PBM) Industry Report: 2013 Edition – New Report by Koncept Analytics

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In the US, a third party administrator of prescription drug program is known as a Pharmacy Benefit Manager (PBM). For more mail me: pr@konceptanalytics.com

In the US, a third party administrator of prescription drug program is known as a Pharmacy Benefit Manager (PBM). For more mail me: pr@konceptanalytics.com

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    The US Pharmacy Benefit Management (PBM) Industry Report: 2013 Edition – New Report by Koncept Analytics The US Pharmacy Benefit Management (PBM) Industry Report: 2013 Edition – New Report by Koncept Analytics Presentation Transcript

    • View Report Details The US PBM Industry Report ----------------------------------------------------2013
    • View Report Details Executive Summary In the US, a third party administrator of prescription drug program is known as a Pharmacy Benefit Manager (PBM). The primary responsibilities of a PBM include processing and paying prescriptions drug claim, developing and maintaining formulary, negotiating discounts and rebates with drug manufacturers and pharmacies. The US prescription volume has witnessed an unprecedented growth over the past few years and the same pattern is likely to continue in the near future. Therefore, through rebates from pharmaceutical manufacturers, price discounts from retails, and effective mail service pharmacies, the PBMs ceaselessly focus on enabling the plan sponsors and individuals to obtain prescribed drugs at lower prices. In order to improve the value of drug benefit and manage the cost and utilization of prescribed drugs, PBMs offer a wide range of tools and techniques. These techniques include pharmacy network, plan design, electronic prescribing, manufacturer discounts, and clinical management. The US PBM industry is highly fragmented with about 100 major companies operating in the marketplace, out of which some are independently owned and operated while others are subsidiaries of major chain drug store, retail outlets and, managed care plans. The key factors driving growth of PBM industry include accelerating US aging population, prevalence of chronic disease, increased life expectancy, healthcare reforms and increasing healthcare expenditure. Some of the noteworthy trends and developments of this industry include rising Medicare enrollment, generic drug utilization, increased acceptance of specialty drugs and ongoing merger & acquisition activities. The report contains a comprehensive analysis of the PBM industry in the US. After the acquisition of Medco Health Solution by Express Script, an intense competition is noted among few major players; Express Script, CVS Caremark and Catamaran. The fierce competition prevailing in the US PBM industry has been studied on a number of parameters such as market share, prescription volume, revenues, claims, and operational statistics, apart from others. The company profiles of leading players in the market are also presented in the report.
    • A pharmacy benefit manager (PBM) is defined as a third party administrator of prescription drug programs in the US. The US Prescription Drug Market – by Value (2008-2012) • The US prescription drug market decreased from US$.... billion in 2011 to US$.... billion in 2012 thereby marking a mild decline of ….%. However, The market had shown a consistent increase from 2008 to 2011. Further, through the period spanning 2008 to 2012, the market increased at a CAGR of ….% US$ Billion • The US prescription drug market is majorly sub divided into two parts on the basis of dispensing channels namely; Retail Channels and Institutional Channels. In 2012, retail channels accounted for sales equivalent to US$.... billion while the institutional channels reported sales worth US$... billion. •Retail channels held ….% share of the total US prescription in 2012. On the other hand, the institutional dispensing channels represented a mild share of …..%.. 2008 2009 2010 2011 2012 Percentage Share of the Dispensing Channels in the US The US Prescription Drug Market by Prescription Drug Market - by Value (2012) US$ Billion Dispensing Channels – by Value (2012) Retail Channels Retail Channels Institutional Channels Institutional Channels
    • PBM services can be divided into three important categories and their respective beneficiaries for persuading consumer behavior: price, utilization and drug mix. Percentage Share of Retail Dispensing Channels in the US Prescription Drug Market – by Value (2012) • In terms of percentage share of retail dispensing channels by value, chain stores held highest share of …% in 2012 immediately followed by mail services with ….% share. Further, Independent channels and food stores claimed respective share of …% and …%. • Accounting for …% of the share, clinical channels held the highest share in the US institutional channel prescription market by value in 2012, immediately followed by non-federal hospitals with a healthy …% share. Long-term care and federal facilities claimed shares of ….% and ….%, respectively. Furthermore, Home health care and HMO held almost equal shares of …..% and …..%, respectively. Chain Stores Mail Service Independent Food Stores •In 2012, chain stores held highest share of ….% of the total prescription dispensed in the US, immediately followed by moderate share of ….% of the independent retail channels. Percentage Share of Institutional Dispensing Channels in the US Percentage Share of Retail Dispensing Channels in the US Prescription Drug Market – by Value (2012) Prescription Drug Market – by Volume (2012) Clinics Long-Term Care Home Health Care Miscellaneous Non-Federal Hospitals Federal facilities HMO Chain Stores Independent Food Store Mail Service
    • The key factors driving growth of PBM industry include accelerating US aging population, prevalence of chronic disease, increased life expectancy, healthcare reforms and increasing healthcare expenditure. US$ Billion The US Prescription Drug Market – by Volume (2012) • A steady and consistent increase has been noted in the US prescription volume over past few years. The number of US prescription inclined from ….. million in 2011 to ….. million in 2012 thereby marking an incline of ….%. Further, the growth of the aforementioned market was observed at a CAGR of ….% during the period spanning 2008 to 2012. •In 2012, out of the total prescriptions dispensed in the US, retail channels accounted for ….. million prescriptions while ….. million prescriptions were dispensed via institutional channels. • In terms of dispensing channels, in 2012 retail channels accounted for …..% share of the prescriptions dispensed in the US. On the other hand, institutional channels held a share of …..%. 2008 2009 2010 2011 2012 Percentage Share of the Dispensing Channels in the US The US Prescription Drug Market by Prescription Drug Market - by Volume (2012) US$ Billion Dispensing Channels – by Volume (2012) Retail Channels Retail Channels Institutional Channels Institutional Channels
    • PBMs obtain money from three entities: Drug Manufacturers, Plan Sponsors and Pharmacies. Percentage Share of PBM on Adjusted Prescription Percentage Share of Leading PBMs by PBM Revenue (2013E) Express Script Prime Medimpact CVS Catamaran Cigna Optum Humana Others Dispensed - Volume (2012) Express Script OptumRx Humana Pharmacy Solution Medimpact CVS Caremark Catamaran Prime Therapeutics Cigna Pharmacy Management  Express Script is projected to claim a share of …% of the total revenue by the end of 2013, immediately followed by CVS Caremark with ….% share. The two aforementioned top notch companies strongly dominate the PBM marketplace with collective market share of ….%. It is noteworthy that there is a big gap in the market shares of CVS Caremark and the next set of market players. The estimated shares of Optum, Prime and Catamaran during 2013 are ….%, ….% and ….%, respectively. Express Script and CVS Caremark lead the market as they offer plan sponsors singular focus, dedicated resources, experience, and economies of scale. Additionally, other HMOs, such as Aetna and Cigna, outsource certain services to independent PBMs.  Following the acquisition of Medco in 2012, Express Scripts was the largest player in 2012, with approximately ….% market share in terms of adjusted prescription volume. CVS Caremark has roughly …..% share, while OptumRx would control approximately …..% of total scripts in the US. Catamaran, formed following the combination of SXC Health Solutions and Catalyst Health Solutions, represents the fourth largest PBM with about …..% share. Further, it is noteworthy that the top four companies’ collectively accounts for ……% market during the cited period.  Within the Fortune 100 employer base, Express script led the market with an estimated share of ….% during 2012. The strong dominance of Express Script is chiefly due to its acquisition of Medico Health Solution. CVS Caremark accounted for …..% of the Fortune 100 PBM market share. The two top notch companies represent roughly …..% share. Other companies operating in the aforementioned segment include OptumRx, Catamaran and Prime Therapeutics, apart from others. Note: Market attractiveness is inverse of penetration. Low penetration means high attractiveness and vice-versa
    • Table of Contents 1. Overview 1.1 History of PBM 1.2 PBM Managers 1.3 Retail Dispensing Process & Flow of Funds 1.4 Mail Dispensing Process and Flow of Funds 2. The US PBM Market Size 2.1 PBM Market by Value -Market Value Growth -Breakdown by Dispensing Channels 2.1.1 Retail Channels 2.1.2 Institutional Channels 2.2 PBM Market by Volume -Market Volume Growth -Breakdown by Dispensing Channels 2.2.1 Retail Channels 2.2.2 Institutional Channels 2.3 Generic Drugs -Market Overview -Penetration Rate 2.4 Specialty Drugs 3. Market Dynamics 3.1 Growth Drivers 3.1.1 Accelerating US Aging Population 3.1.2 Rising Incidences of Chronic and Infectious Diseases 3.1.3 Increasing Life Expectancy Rate in the US 3.1.4 Escalating Healthcare Expenditure in the US 3.1.5 Healthcare Reforms 3.1.6 Rising Pharmaceutical Sales 3.1.7 Ameliorating Economic Conditions List of Charts & Tables List of Charts History of PBMs Types of PBM Services PBM Managers Formulary Structure Retail Dispensing Process and Flow of Funds Mail Dispensing Process and Flow of Funds The US Prescription Drug Market – by Value (2008-2012) The US Prescription Drug Market by Dispensing Channels – by Value (2012) Percentage Share of the Dispensing Channels in the US Prescription Drug Market - by Value (2012) Percentage Share of Retail Dispensing Channels in the US Prescription Drug Market – by Value (2012) Percentage Share of Institutional Dispensing Channels in the US Prescription Drug Market – by Value (2012) The US Prescription Drug Market – by Volume (2012) The US Prescription Drug Market by Dispensing Channels – by Volume (2012) Percentage Share of the Dispensing Channels in the US Prescription Drug Market - by Volume (2012) Percentage Share of Retail Dispensing Channels in the US Prescription Drug Market – by Volume (2012) Number of Prescription Dispensed via Institutional Channels in the US (20082012) Penetration of Generic Drugs (2003-2013E) Estimated PBM Profitability of Generic versus Branded Scripts by Channel (2012) Estimated Brand Revenue Lost to Generic Launches (2012-2016E) Specialty Market Share by Dispensing Channels (2012) The US Aging Population (2008-2012) The US Life Expectancy Rate (2006-2013E) The US Healthcare Expenditure per Capita (2006-2012E) The US Pharmaceutical Sales (2010-2012) GNI of the US (2006-2012) Medicare Enrollments (2005-2014E)
    • 3.2 Trends and Developments 3.2.1 Rising Medicare Enrollments 3.2.2 Trends in Drug Prices 3.2.3 Generic Drug Utilization 3.2.4 Increased Acceptance of Specialty Drug 3.2.5 Medicaid Pharmacy Program Savings 3.2.6 Penetration of Unbranded Generic Drug Prescription 3.2.7 PBM Mergers and Acquisitions 4. Competitive Landscape 4.1 Competition by Prescription Volume 4.2 Competition by Claims 4.3 Competition by Lives Managed 4.4 Competition by Specialty Pharmacy Drug Spending 4.5 Competition by Health Plans 4.6 Analysis of PBMs Operating Statistics 4.7 Competition by Customer Segment Mix 5. Company Profiles 5.1 Express Script 5.1.1 Business Overview 5.1.2 Financial Overview 5.1.3 Business Strategies -Expansion through Acquisitions -Unremitting Focus on Innovation 5.2 CVS Caremark 5.2.1 Business Overview 5.2.2 Financial Overview 5.2.3 Business Strategies -Acquisitions and Collaborations -Focus on Geographic Expansion Drugs Price Index (2008-2013E) Specialty Drug Spending Trend (2012 & 2015E) Generic Drug Penetration Rate (2005-2013E) Percentage Share of Leading PBMs by PBM Revenue (2013E) Fortune 100 PBM Market Share (2012) Percentage Share of PBM on Adjusted Prescription Dispensed - Volume (2012) PBM Market Share by Claims (2014E) PBM Market Share by Lives Managed (2013E) Percentage Share of Specialty Pharmacy Drug Spending (2012) Top 35 Health Plan (Based on Lives) PBM Market Share (2012) PBMs Pro-forma Customer Segment Mix (2012) Revenue of Express Script by Business Segment (2012) Express Script Revenue and Net Income (2008-2012) CVS Caremark Business Revenue – by Segment (2012) CVS Caremark Revenue and Net Income (2008-2012) Catamaran’s Revenue by Business Segment (2012) Catamaran Revenue and Net Income (2008-2012)
    • 5.3 Catamaran 5.3.1 Business Overview 5.3.2 Financial Overview 5.3.3 Business Strategies -Expansion of Customer Base -Broadening Services Portfolio List of Tables The US Dollar Spend by Retail Channels - In US$ Billions (2008-2012) The US Dollar Spend by Institutional Channels - In US$ Billions (20082012) Number of Prescription Dispensed via Retail Channels in the US - In Million (2008-2012) Potential Medicaid Pharmacy Program Savings for Top 10 States (20122021) Selected PBM M&A Transactions - in US$ million (1993–2012) EBITDA Multiples for Selected PBM transactions (2000-2012) Dollar Share of Leading PBMs by PBM Revenue (2013E) PBM Market Share Based on Adjusted Prescription Volume (2012) Adjusted Mail-Order Penetration (Q112-Q213) Generic Dispensing Rate (Q112-Q213) Revenue per Adjusted Rx (Q112-Q213) EBITDA per Adjusted Rx (Q112-Q213) PBM Profitability Metrics (2012)
    • View Report Details Contact Us: These are abridged and sanitized sample pages from the comprehensive report on the “ The US PBM Industry Report ”. To know more about this report or for any customized research requirement, please contact the following: Koncept Analytics Vikas Gupta BD Manager CS-36, Second Floor, Ansal Plaza Vaishali, Ghaziabad, U.P. – 201010 T. +91-120-4130959 C: +91-9811715635 vikas@konceptanalytics.com www.konceptanalytics.com