The Top 15 U.S. Pharmacies of 2020: Market Shares and Revenues at the Biggest Companies (rerun)

This week, I’m rerunning some popular posts while I prepare for this Friday’s live video webinar: Drug Channels Update: 340B Controversies and Outlook.

Click here to see the original post and comments from March 2021.

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Next week, Drug Channels Institute will release our 2021 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers. It’s the 12th edition of our popular and comprehensive examination of the entire drug pricing, reimbursement, and dispensing system. (You can preorder at special discounted prices.)

The exhibit below—one of 211 in our new report—provides a first look at the 15 largest organizations, ranked by total U.S. prescription dispensing revenues for calendar year 2020.

U.S. prescription dispensing revenues reached a record $465 billion in 2020. The largest players all had bigger slices of the revenue pie, due to the growth at specialty pharmacies and multiple transactions that shifted market share among the vertically integrated companies.

For a sneak peek at the complete report, click here to download a free pre-publication draft overview (including the table of contents and a list of exhibits).
DIVIDING THE PIE

The table below shows DCI’s estimates of the largest pharmacies ranked by total prescription dispensing revenues for 2020.

[Click to Enlarge]

Observations on these figures:

• The top seven dispensing pharmacies—CVS Health, Walgreens Boots Alliance, Cigna, UnitedHealth Group, Walmart, Kroger, and Rite Aid—accounted for about 72% of U.S. prescription dispensing revenues in 2020. The top 15 pharmacies accounted for nearly 80% of total dispensing revenues from retail, mail, long-term care, and specialty pharmacies.

• The largest insurers, PBMs, and specialty pharmacies have now combined into vertically integrated organizations. The revenue figures in the chart above reflect combined dispensing revenues from all entities within these organizations. As we predicted in last year’s edition of our report, significant business relationships among the largest companies has further concentrated market share. For 2020, we estimate that PBMs earned more than half of their gross profits from mail and specialty pharmacy dispensing activities. (See Chapter 11 of our new report.)

• Five of the largest pharmacies were central-fill mail and specialty pharmacies operated by the PBMs Caremark (CVS Health), Express Scripts (Cigna), Envolve Health (Centene), Humana, and OptumRx (UnitedHealth Group). This reflects the growing role of specialty drugs in the pharmacy industry. Specialty drugs accounted for more than 38% of the pharmacy industry’s prescription revenues in 2020. (Specialty drugs’ share of plan sponsor pharmacy benefit costs—after rebates—remains higher than their share of prescription revenues.)

• From 2010 to 2020, the three largest chain drugstores acquired nearly 4,900 locations from smaller competitors. In many cases, the larger chains have shut down the acquired company’s locations and transferred the prescriptions and patients to existing stores. (See Chapter 2 of our new report.) Large chains have also been rationalizing their store networks.

NOTES FOR NERDS

Our estimated prescription revenue data may not correspond with figures from other public sources. That’s because:

• We have computed or estimated the figures on a calendar-year basis. The fiscal years for many public retail companies do not correspond to calendar years.

• Many companies do not report prescription revenues. We have therefore used various methods and sources to estimate the data.

• As noted in the footnotes to the table above, we have made various adjustments to account for the pro forma impact of mergers and acquisitions as well as certain client transitions among the largest PBMs. Year-over-year growth rates were also computed based on the prior year’s pro forma revenues. Pro forma revenues are computed based on the year in which an acquisition was completed.