The Top 15 U.S. Pharmacies of 2023: Market Shares and Revenues at the Biggest Chains and PBMs

Next week, Drug Channels Institute (DCI) will release our 2024 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers. It’s the 15th edition of our popular and comprehensive examination of the entire U.S. drug pricing, reimbursement, and dispensing system.

For 2023, DCI estimates that U.S. prescription dispensing revenues reached $621 billion in 2023, driven by accelerating GLP-1 prescriptions and an expanding post-pandemic market. The table below—one of 262 in our new report—provides DCI's first look at the 15 largest organizations that battled for those revenues.

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 7, 2024.

How will the most consequential change in federal drug pricing policy affect the largest pharmacies and PBMs? Find out at my upcoming live video webinar, Drug Channel Implications of the Inflation Reduction Act, on April 5, 2024, from 12:00 p.m. to 1:30 p.m. ET. Click here to learn more and sign up.

COLOSSAL

The table below shows DCI’s estimates of the largest pharmacies ranked by total prescription dispensing revenues for 2023, excluding revenues from the administration of COVID-19 vaccines. For important information about these figures, please see the table’s footnotes and the Notes for Nerds section below.

[Click to Enlarge]

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 two-thirds of U.S. prescription dispensing revenues in 2023. The top 15 pharmacies accounted for about three-quarters of total dispensing revenues from retail, mail, long-term care, and specialty pharmacies.

• Express Scripts, which remained the third-largest dispensing pharmacy, had a direct impact on revenues at two other top 15 companies:
  
  • Walgreens Boots Alliance’s AllianceRx Walgreens Pharmacy (ARxWP) continued to lose sales to Express Scripts’ Accredo specialty pharmacy business. This was a consequence of the meltdown of the Prime Therapeutics/Walgreens relationship. A majority of Prime’s plan sponsor clients have shifted specialty fulfillment to Express Scripts. These lost clients reduced ARxWP’s revenues by more than $11 billion over the past few years.
• In 2022, Kroger terminated its pharmacy provider agreement with Express Scripts. We estimate that Kroger’s exit from the Express Scripts pharmacy network reduced the supermarket’s annual retail and specialty prescription revenues by more than $2.0 billion for 2023. To overcome some of these restrictions, Kroger has announced direct pharmacy network agreements with such payers as Prime Therapeutics, Medical Mutual, and Centene.

We discuss other market changes and acquisitions that affected the 2023 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 pharmacies were central fill mail and specialty pharmacies owned by vertically integrated organizations that also own a pharmacy benefit manager (PBM): Caremark (CVS Health), Express Scripts (Cigna), Envolve Health (Centene), CenterWell (Humana), and Optum Rx (UnitedHealth Group). We estimate that specialty drugs accounted for a majority of prescription revenues at these pharmacies.

• In the report’s Section 12.3.1., we update our analysis of vertical integration among insurers, PBMs, specialty pharmacies, and providers within U.S. drug channels. Exhibit 254 updates DCI’s infamous vertical integration chart.
  
  The revenue figures in the chart above reflect combined dispensing revenues from all entities within these organizations. Page vii of the 2024 report overview provides a handy matrix summarizing the various roles that these companies play in the drug channel.

Various announced developments will alter the largest 15 pharmacies for 2024. These include:

• Kroger’s possible merger with Albertsons, which is being challenged by the Federal Trade Commission.

• In January 2024, Express Scripts began a five-year agreement to manage pharmacy benefits for about 20 million Centene beneficiaries. CVS Caremark had previously provided these services to Centene’s pharmacy benefit management business.

• The ultimate outcome of Rite Aid's bankruptcy remains unclear. In 2024, MedImpact completed its purchase of Rite Aid’s Elixir Solutions PBM business, which operates specialty and mail pharmacies.

• Elevance Health’s CarelonRx has announced multiple investments and initiatives that will expand its internal dispensing capabilities and reduce its dependence on CVS Health. These activities include its acquisitions of BioPlus Specialty Pharmacy and Paragon Healthcare, the launch of CarelonRx Pharmacy, and its investments in the DomaniRx PBM claims administration platform.

DCI’s new report shows that the shakeout of retail pharmacies accelerated in 2023, as acquisitions increased and larger companies reduced the number of U.S. pharmacy locations. The number of U.S. pharmacy locations across all formats has begun trending downward. As the African proverb says: “When elephants fight, it is the grass that suffers.”

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. Where relevant, we have adjusted previously reported figures based on new disclosures of prescription revenues.

• 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. DCI estimates that total retail pharmacy industry revenues from administering COVID-19 vaccines were less than $2 billion in 2023.

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).

CORRECTION: In the original version of this article, we misstated PANTHERx's 2023 revenues as $2.5 billion, rather than  the actual figure of $3.6 billion. We apologize for the error.