Thursday, March 12, 2015

The Top 10 Specialty Pharmacies of 2014

For 2014, about one-quarter of retail, mail, and specialty pharmacies’ revenues came from specialty drugs. Below, you’ll find our exclusive list of the 10 largest pharmacies, ranked by estimated revenues from dispensing specialty pharmaceuticals.

The top three companies—Express Scripts, CVS Health, and Walgreen—accounted for 56% of revenues from pharmacy-dispensed specialty drugs. Over the past few years, however, marketplace and business changes have reduced their share.

To learn more about specialty pharmacy and meet the industry’s key players, be sure to attend the 2015 sPCMA Business Forum and the 2015 Armada Specialty Pharmacy Summit. I’ll be at both, so be sure to say hi!

As I describe in 2014's Top Pharmacies: Specialty Shifts Industry Leadership, many of the biggest U.S. pharmacies by revenue are now central-fill, mail pharmacies operated by pharmacy benefit managers (PBMs). Specialty drugs account for 30% or more of revenues at these pharmacies.

Here’s our list of the top pharmacies. The table appears in our new 2014–15 Economic Report on Retail, Mail, and Specialty Pharmacies.

[Click to Enlarge]

Here are some highlights of the 2014 market share figures:
  • CVS Health’s specialty pharmacy dispensing revenues grew by 28%, to an estimated $20.5 billion. This figure includes revenues from the Caremark specialty pharmacy and from CVS retail pharmacies. It excludes infusion revenues from Coram, which it acquired in December 2013. Caremark’s specialty pharmacy is the exclusive specialty pharmacy provider for certain employer PBM clients.
  • We estimate that revenues at Express Scripts’ Accredo and FreedomFP specialty pharmacies were lower than last year’s figure, due to smaller claims volume.
  • Walgreens remains the third-largest specialty pharmacy, because of its many strategic acquisitions. We estimate that about $2 billion of its specialty drug revenues comes from prescriptions dispensed at Walgreens retail drugstores.
  • Diplomat Pharmacy, the largest independent specialty pharmacy, became a public company in October 2014. I'll review Diplomat’s latest financial results in an upcoming post.
  • BriovaRx, the specialty pharmacy of PBM Catamaran, recently disclosed that its revenues were about $2 billion in 2014. This figure excludes the acquisition of Salveo Specialty Pharmacy, which will add at least $400 million in revenues.
As we show in The Specialty Pharmacy Boom Continues, the specialty market’s growth continues to draw many companies into the business of dispensing specialty drugs. Growth in the above table’s “All other retail, mail, and specialty pharmacies” category demonstrates that many pharmacies are competing to dispense these expensive therapies. Consequently, market share has become slightly less concentrated compared with our previous estimates.

Specialty drugs are poised for another year of tremendous growth. As Phil Hagerman, CEO of Diplomat Pharmacy, said recently: “Specialty pharmacy IS the new pharmacy.” The size and growth of these 10 companies prove it.

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