United States Pharmacy Benefit Management Market Segmented By Business Model (Standalone PBM, Health Insurance Providers, Retail Pharmacy), By End-use (Commercial, Federal) Region and Competition, Opportunity, and Forecast, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 151.67 Billion
CAGR (2026-2031)	5.01%
Fastest Growing Segment	Health Insurance Providers
Largest Market	Midwest
Market Size (2031)	USD 203.37 Billion

Market Overview

The United States Pharmacy Benefit Management Market will grow from USD 151.67 Billion in 2025 to USD 203.37 Billion by 2031 at a 5.01% CAGR. Pharmacy Benefit Managers function as third-party administrators of prescription drug programs for commercial health plans, self-insured employer plans, and government entities. The primary drivers supporting market growth include the escalating prevalence of chronic diseases and the aging United States population which necessitate consistent medication management. Furthermore, the intense pressure on healthcare payers to control spiraling prescription drug costs fuels the demand for these intermediaries to negotiate rebates and manage formularies effectively.

According to the Pharmaceutical Care Management Association, in 2025, pharmacy benefit companies administered prescription drug plans for more than 275 million Americans. Despite this extensive market reach, the industry faces a significant challenge regarding heightened regulatory scrutiny and legislative pressure focused on pricing transparency and rebate practices. This increased oversight threatens to impose stricter operational constraints that could impede future market expansion by altering traditional revenue models.

Key Market Drivers

The rapid expansion of the high-cost specialty pharmaceutical segment, particularly regarding GLP-1 agonists and complex biologics, serves as a primary catalyst for market dependence. As the pipeline for these expensive therapies widens, commercial payers and government programs increasingly rely on pharmacy benefit managers to implement rigorous cost-containment strategies, such as formulary exclusions and step therapy. This reliance is intensified by soaring spending metrics that threaten payer sustainability. According to the American Society of Health-System Pharmacists, April 2024, in the 'National Trends in Prescription Drug Expenditures and Projections for 2024' report, total prescription drug expenditures in the United States surged to $722.5 billion in 2023, representing a 13.6 percent increase driven largely by utilization growth.

Strategic vertical integration and consolidation of healthcare stakeholders further define the current market landscape, allowing dominant entities to control the entire value chain from insurance to dispensing. By merging health plans, specialty pharmacies, and provider networks, these conglomerates streamline operations and maximize negotiating leverage against manufacturers. According to the Federal Trade Commission, July 2024, in the 'Pharmacy Benefit Managers: The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies' interim report, the three largest pharmacy benefit managers processed nearly 80 percent of the approximately 6.6 billion prescriptions dispensed annually. This integration facilitates massive scale; for example, according to The Cigna Group, October 2024, in the 'Third Quarter 2024 Results', revenue for the Evernorth Health Services segment, which includes PBM operations, reached $52.6 billion, highlighting the financial magnitude of these consolidated models.

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Key Market Challenges

The primary challenge hampering the growth of the United States Pharmacy Benefit Management Market is the intensification of regulatory scrutiny and legislative pressure regarding pricing transparency and rebate practices. This heightened oversight fundamentally threatens the traditional revenue models that Pharmacy Benefit Managers (PBMs) have long relied upon, particularly "spread pricing" and rebate retention. As federal and state legislators demand greater visibility into the opaque financial flows between PBMs, drug manufacturers, and health plans, these intermediaries are being forced to disclose negotiated rates and net costs. This transparency erodes the arbitrage opportunities that historically generated significant profit margins, thereby compelling PBMs to restructure their contracts and operational frameworks in ways that may be less lucrative.

The operational constraints resulting from this legislative environment create a climate of uncertainty that directly impedes market expansion. PBMs must now divert substantial resources toward compliance and litigation rather than strategic growth or innovation. This regulatory crackdown is driven by the severe financial strain current PBM practices place on the broader healthcare ecosystem. According to the National Association of Chain Drug Stores, in 2025, the rate of pharmacy closures accelerated to nearly four locations per day, a critical trend attributed to the unsustainable reimbursement pressures exerted by pharmacy benefit managers. Consequently, the industry faces a contracted growth trajectory as it struggles to adapt to a landscape where its primary profit levers are being systematically dismantled by legal mandates.

Key Market Trends

The Accelerated Adoption of Biosimilar-First Formulary Strategies represents a decisive shift in how pharmacy benefit managers control costs within the specialty drug segment. Instead of merely tiering products, PBMs are now aggressively excluding blockbuster reference biologics to force the utilization of lower-cost biosimilars. This strategy effectively neutralizes the patent thickets that protected monopoly pricing, allowing PBMs to deliver immediate savings to plan sponsors. The financial impact of this pivot is evident in recent performance metrics; according to CVS Caremark, October 2024, in the 'Biosimilar adoption achieves $908 million in gross savings' update, clients realized $908 million in gross savings within just six months of the company removing Humira from its major national commercial formularies.

Simultaneously, the Integration of Gene Therapy Financial Risk-Sharing Models has emerged as a necessary evolution to manage the actuarial volatility of multimillion-dollar curative treatments. As ultra-high-cost therapies gain approval, PBMs are deploying novel stop-loss programs and value-based contracts that link reimbursement directly to patient outcomes. These mechanisms are essential for insulating self-insured employers from the shock of sudden, catastrophic claims. The urgency for such financial insulation is underscored by market projections; according to CVS Caremark, June 2024, in the 'Q2 2024 Gene Therapy Report', projected annual spending on gene therapies in the United States is expected to surpass $20 billion, necessitating these specialized risk-mitigation products to ensure benefit plan sustainability.

Segmental Insights

Health Insurance Providers represent the fastest-growing segment in the United States Pharmacy Benefit Management market, driven largely by the strategic consolidation of medical and pharmacy benefits. Insurance companies are increasingly internalizing PBM functions to gain greater control over escalating drug costs and to enhance adherence among members. This growth is further accelerated by rising participation in government programs overseen by the Centers for Medicare & Medicaid Services, which requires insurers to maintain rigorous cost containment and compliance standards. Consequently, these providers are prioritizing integrated PBM solutions to negotiate favorable rebates and streamline claims processing efficiently.

Regional Insights

The Midwest dominates the United States Pharmacy Benefit Management market primarily due to the concentration of major industry headquarters in states such as Minnesota and Missouri. This region houses prominent market leaders like OptumRx and Express Scripts, which drive significant revenue through extensive prescription network management and plan administration. This corporate density facilitates strategic integration with insurance providers and ensures robust compliance with federal standards established by the Centers for Medicare & Medicaid Services. Consequently, the Midwest serves as a central hub for controlling healthcare costs and managing prescription drug coverage for a vast consumer base.

Recent Developments

• In June 2025, Navitus Health Solutions released its annual drug trend report, presenting research on cost containment strategies in the pharmacy benefit market. The company’s analysis revealed that 30% of its clients achieved a reduction in their total drug spend in 2024 compared to the prior year, despite rising industry-wide costs. The report highlighted that the adoption of biosimilars, particularly for autoimmune conditions, generated over $315 million in savings. These findings demonstrated the efficacy of a transparent, pass-through business model in mitigating the financial impact of high-cost specialty drugs and the increased utilization of weight-loss medications for commercial plan sponsors.
• In July 2024, True Rx Health Strategists announced a new collaboration with the Mark Cuban Cost Plus Drug Company to enhance medication affordability for plan members. This partnership enabled the pharmacy benefit manager to offer the direct-to-consumer pharmacy as a standard in-network option within its benefit plans. Through this arrangement, members gained access to common prescriptions at prices reflecting the manufacturing cost plus a set markup and nominal fees. The initiative focused on providing employers and patients with a transparent alternative to traditional pricing structures, aiming to significantly reduce out-of-pocket costs and overall plan expenses.
• In May 2024, Optum Rx launched a new financial product for plan sponsors called the Clear Trend Guarantee to address the market's demand for greater transparency. This pricing model was developed to offer employers and health plans a simplified, predictable way to manage pharmacy spending by consolidating multiple distinct guarantees—such as those for retail, home delivery, and rebates—into a single per-member cost. The solution aimed to help clients better forecast their budgets and control the net cost of prescription drugs. The company stated that this value-based model would ensure a guaranteed bottom-line benefit payment while leveraging data to identify effective care pathways for members.
• In March 2024, Prime Therapeutics LLC entered into a strategic alliance with Capital Rx, Inc. to modernize its pharmacy benefit management technology infrastructure. Through this collaboration, the company secured exclusive access to Capital Rx’s enterprise health platform, JUDI, for its commercial and government business lines. The agreement also involved the pharmacy benefit manager becoming a minority investor in the health technology firm. This partnership was established to replace legacy claims processing systems with a more agile, cloud-native solution, thereby improving operational efficiency and enabling the rapid deployment of new clinical programs and benefit designs for health plans and employer groups.

Key Market Players

• United Health Group
• CVS Health
• Cigna Health Services
• Express Scripts
• Humana Pharmacy Solutions
• Prime Therapeutics
• MedImpact Healthcare Systems
• Magellan Rx Management
• Envision Rx Options
• Perform Rx

By Business Model	By End-use	By Region
Standalone PBM Health Insurance Providers Retail Pharmacy	Commercial Federal	Northeast Midwest South West

Report Scope:

In this report, the United States Pharmacy Benefit Management Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• United States Pharmacy Benefit Management Market, By Business Model:

• Standalone PBM
• Health Insurance Providers
• Retail Pharmacy

• United States Pharmacy Benefit Management Market, By End-use:

• Commercial
• Federal

• United States Pharmacy Benefit Management Market, By Region:

• Northeast
• Midwest
• South
• West