2010 Market Share of Top Retail and Specialty Pharmacies

NOTE: For fresher data, see 2011 Market Share of Top Pharmacies.


On December 7, I’ll be releasing a new report called The 2010-11 Economic Report on Retail and Specialty Pharmacies. I want to give you a sneak peek at my list of top pharmacies in 2010—a piece of data that generates many email requests.

The exhibit below, one of 40 in my new report, shows my estimates for market share of prescription revenue by company for calendar year 2010. I estimate that the top six dispensing retail and specialty pharmacies—CVS Caremark, Walgreens, Medco Health Solutions, Rite-Aid, Walmart, and Express Scripts—will account for 62.2% of U.S. pharmacy dispensing revenues in 2010. These data reflect the industry-level trends highlighted in New Data on Pharmacy Industry Market Share.

Don’t get too frightened by the data. Almost one-third of revenues still come from retail and specialty pharmacies beyond the 11 companies in the table. Total revenues from this more numerous group are a still-substantial $85.5 billion.


Here’s Exhibit 2 from the new report. Click here to download this market share chart as a PDF file.

Some observations:

Consolidation. Both acquisitions and organic growth have created this group of very large pharmacies. From 1998 through 2009, chain drugstores and mail-order pharmacies captured 70% of the $160.2.billion increase in pharmacy revenues since 1998.

Growth. The overall pharmacy market continues to expand due to both increased utilization and higher prices. Even though annual prescription growth has been below 3% in the past few years, retail drugstore revenues still correlate weakly with overall economic activity.

Soaring Specialty. Revenues at mail-order pharmacies are growing faster than other formats due to increased spending on more expensive specialty pharmaceuticals. The average specialty prescription is almost $1,900. The concentration of specialty pharmacies is even greater than the overall industry. The largest five specialty pharmacies generate almost 90% of this dispensing format’s revenues. (See Exhibit 3 in the report.) Three of these five specialty pharmacies are subsidiaries of a Pharmacy Benefit Manager (PBM): Accredo Health (Medco Health Solutions), CuraScript Pharmacy (Express Scripts), and CVS Caremark. Walgreens is the fourth largest specialty pharmacy thanks to its many acquisitions. My new report delves into the implications of the projected growth in specialty pharmaceuticals.

Walmart overtakes Rite-Aid. 2010 marks the year that Walmart’s prescription business becomes equal to Rite-Aid’s business. One is shrinking, the other is growing. Can you guess which is which?

Multi-format dispensing. Although the exhibit lists a primary dispensing format, some of the larger companies operate across multiple dispensing formats. For instance, Walgreens is the largest chain drugstore with about 7,600 retail pharmacies. The company also operates 101 home-care facilities, 367 worksite pharmacies, 14 specialty pharmacies, and two mail-order pharmacies.

I’ll tell you more when the report in launched next week. Stay tuned!

CAN I INTEREST YOU IN HANUKKAH?

The festival of lights begins for some of us tonight. Sorry that my new report was not ready in time to enjoy with your latkes. As a consolation prize, enjoy this amusing ditty from Stephen Colbert and Jon Stewart.