The Top 15 U.S. Pharmacies of 2022: Market Shares and Revenues at the Biggest Companies

Next week, Drug Channels Institute will release our 2023 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers. It’s the 14th edition of our popular and comprehensive examination of the entire U.S. drug pricing, reimbursement, and dispensing system.

The exhibit below—one of 241 in our new report—provides a first look at the 15 largest organizations, ranked by total U.S. prescription dispensing revenues for calendar year 2022. U.S. prescription dispensing revenues reached a record $548 billion in 2022.

Not to put too fine a point on it—but they might be giants. The largest 15 pharmacies accounted for more than 75% of total dispensing revenues from retail, mail, long-term care, and specialty pharmacies. The top 15's share dipped slightly compared with their 2021 share, due primarily to the significant revenue losses for Walgreens Boots Alliance’s AllianceRx Walgreens Pharmacy.

For a sneak peek at the complete report, click here to download our free report overview (including key industry trends, the table of contents, and a list of exhibits). We’re offering special discounted pricing if you order before April 3, 2023.

How will GoodRx and Mark Cuban Cost Plus Drug Company affect the pharmacy industry? Find out at my upcoming live video webinar, Discount Cards, Cost-Plus Pharmacies, and PBMs: Trends, Controversies, and Outlook, on March 31, 2023, from 12:00 p.m. to 1:30 p.m. ET. Click here to learn more and sign up.

I HAVE A SECRET TO TELL

The table below shows DCI’s estimates of the largest pharmacies ranked by total prescription dispensing revenues for 2022, excluding revenues from the administration of COVID-19 vaccines.

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Observations on these figures:

• The top seven companies operating pharmacies—CVS Health, Walgreens Boots Alliance, Cigna, UnitedHealth Group, Walmart, Kroger, and Rite Aid—accounted for 70% of U.S. prescription dispensing revenues in 2022. The top 15 pharmacies accounted for more than 75% of total dispensing revenues from retail, mail, long-term care, and specialty pharmacies.

• The total share of the largest 15 companies decreased slightly compared with their 2021 share, due primarily to the significant revenue losses for Walgreens Boots Alliance’s AllianceRx Walgreens Pharmacy (ARxWP). As I had predicted in 2020, the meltdown of the Prime Therapeutics/Walgreens relationship meant that most of Prime’s plan sponsor clients have shifted specialty fulfillment to Express Scripts. These lost clients reduced AllianceRx Walgreens Prime's revenues by $8 billion in 2022.
  
  We discuss other market changes and acquisitions that affected the 2022 revenues and growth rates for the largest companies in the following sections of our new report: Section 2.3.3., Section 3.3.2., Section 3.3.4, and Section 5.2.2.

• Consistent with prior years’ analysis, five of the largest U.S. pharmacies were central fill mail and specialty pharmacies owned by vertically integrated organizations that also own a PBM: Caremark (CVS Health), Express Scripts (Cigna), Envolve Health (Centene), CenterWell (Humana), and OptumRx (UnitedHealth Group). Revenue growth at the PBMs’ pharmacies is being driven by the dispensing of more-expensive specialty medications, which accounted for nearly 40% of the pharmacy industry’s prescription revenues in 2022.
  
  In the report’s Section 12.3.1., we explain how PBMs have combined into vertically integrated organizations that offer health insurance, operate specialty pharmacies, and provide healthcare services. The revenue figures in the chart above reflect combined dispensing revenues from all entities within these organizations. The matrix below summarizes the various roles that these companies play in the drug channel. (Source: Page vii of the 2023 report overview.) FYI: Exhibit 234 updates my infamous vertical integration chart!

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• Retail pharmacies have played a crucial role in the administration of COVID-19 vaccines. Pharmacies’ revenues and profits have benefited from this activity, although this advantage diminished significantly in 2022. For retail pharmacies, we estimate that total revenues from administering COVID-19 vaccines were more than $7.5 billion in 2021 and about $3.6 billion in 2022. To permit comparability with previous years’ figures, the prescription dispensing figures above exclude revenues from the administration of COVID-19 vaccines.
  
  Since pharmacies incurred no cost of goods for COVID-19 vaccines, pharmacies’ gross margins for administering COVID-19 vaccines have been 100%. Pharmacies’ operating profits from the COVID-19 vaccines were about 50% of revenues. These profits provided economic support for many retail pharmacies and contributed to fewer acquisitions in 2022.

• Various announced mergers and acquisitions will alter the largest 15 pharmacies for 2023. These transactions include Kroger’s merger with Albertsons and CarepathRx’s sale of the BioPlus Specialty Pharmacy to Elevance Health.

You may or may not approve of this consolidation. But I hope our update on the growing pharmacy and PBM marketplace can make a little birdhouse in your soul.

NOTES FOR NERDS

Our estimated prescription revenue data may not correspond with figures from other public sources for the following reasons:

• 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.

• Unless otherwise noted, the figures for prescription dispensing revenues and profits in our new report (including the table above) exclude COVID-19 vaccinations that were administered in retail pharmacies. This omission permits more appropriate comparisons with previous years’ figures.

Another reminder: prescription dispensing revenues are not equivalent to net spending on outpatient prescription drugs (reported by the Centers for Medicare & Medicaid Services’ National Health Expenditures data) and “non-discounted spending” or “invoice-price spending” (reported by IQVIA).