The exhibit below, one of 98 in our new report, shows each company's market share of total U.S. prescription revenues for calendar year 2013. Highlights:
- The top five dispensing pharmacies—CVS Caremark, Walgreens, Express Scripts, Rite Aid, and Walmart—accounted for about 65% of U.S. prescription dispensing revenues in 2013.
- Market share concentration in 2013 was slightly greater than that of 2012.
- We project total 2013 retail, mail, and specialty pharmacy revenues of $287.0 billion, up 1.6% from 2012.
Here’s Exhibit 9 from the new report. Click here to download this chart as a PDF file.
[Click to Enlarge]
The chart reflects many significant market developments in 2012 and 2013:
- Walgreens partially rebounded from 2012's self-inflicted wounds. Between January 2012 and September 2012, consumers whose PBM was Express Scripts were unable to use third-party prescription insurance at a Walgreens pharmacy. When Walgreens was excluded from the Express Scripts network, year-over-year prescriptions dispensed at Walgreens’ pharmacies declined by 10% to 15%, while prescription volume increased at the other chains. After Walgreens reentered the Express Script pharmacy network, it began to recapture lost customers. Rival pharmacies retained some of these gains. We estimate that Walgreens regained only about half of the prescriptions from the Express Scripts dispute. Express Scripts now charges a premium for pharmacy networks that include Walgreens.
- CVS Caremark gained almost 1.0% of prescription dispensing market share in 2013. CVS Caremark’s retail pharmacies retained 60% of the Walgreens’ customers that switched during 2012. The retail business also benefited from the Maintenance Choice program, which shifts prescription volume into CVS retail pharmacies from Caremark’s mail pharmacy and from other non-CVS retail pharmacies.
- Rite Aid continued its business turnaround in 2013. In 2012, Rite Aid grew more quickly than Walgreens, but more slowly than CVS. In 2013, Rite Aid grew more slowly than its drugstore rivals. Its total store count dropped by 38 in 2013. Rite Aid’s total 2013 prescription revenues therefore declined by $0.5 billion. This decline also reduced its market share vs. 2012. Rite Aid’s net store count has declined by 547 locations (-11%) since its 2008 acquisition of Brooks/Eckerd.
- Express Scripts is now the third-largest dispensing pharmacy, following its 2012 merger with Medco Health Solutions. It operates as a mail and as a specialty pharmacy, without retail locations. Revenues of the combined Express Scripts-Medco mail pharmacies declined slightly in 2013, due to Medco’s contract losses. Part of these mail pharmacy sales shifted to UnitedHealthcare’s OptumRx, which took over UnitedHealth’s commercial business from Medco.
- Non-drugstore chains gained share. Walmart, which has grown its pharmacy business without acquisition, benefited from its generic drug discount programs and aggressive participation in Medicare Part D preferred network arrangements. (See Walmart Plays to Win in 2014 Part D Preferred Networks, while CVS and Rite Aid Lag.) Kroger’s pharmacy sales grew by 9.6%, from $7.3 billion in 2011 to $8.0 billion in 2012. We estimate that Kroger grew again in 2013, but at a slower rate.
- Many large companies operate with multiple dispensing formats, although the exhibit only lists the primary dispensing format for each company.
- The revenue figures are calendar year estimates, so they do not necessarily correspond to fiscal year reporting.
- Market share in a particular geographic region or market can differ greatly from the national averages. The report discusses regional market share in the top 20 U.S. metropolitan markets and national market share for specialty drugs.
- The top three are a big chunk of specialty pharmaceutical market. More on that topic in a future excerpt from the report.
- Total pharmacy industry revenues are not comparable to those in our previous reports, due to a major data restatement by IMS Health.
P.S. Feel free to cite or link to these estimates. As a friendly reminder, please attribute the source properly.