Wednesday, January 04, 2012

2011 Market Share of Top Pharmacies

NOTE: For fresher data, see 2012 Market Share of Top Pharmacies.

Happy 2012!

Next week, we'll be releasing the 2011-12 Economic Report on Retail and Specialty Pharmacies. Here's a sneak peek at my list of top pharmacies, ranked by total prescription revenues.

The exhibit below, one of 62 in my new report, shows my estimates for market share of prescription revenues by company for calendar year 2011. I estimate that the top six dispensing retail and specialty pharmacies—CVS Caremark, Walgreens, Medco Health Solutions, Walmart, Rite-Aid, and Express Scripts—will account for 64% of U.S. pharmacy dispensing revenues in 2011.

The future may look very different, as I explain below.

Here’s Exhibit 4 from the new report. Click here to download this chart as a PDF file.

Note: Updated on 1/8/12 to include UnitedHealth's OptumRx mail pharmacy.
The share of the six largest players continues to increase, due to organic and acquisitive growth. Three notable combinations include CVS Caremark’s acquisition of Longs Drug in 2009, Walgreens’ acquisition of Duane Reade in 2010, and Express Scripts’ acquisition of NextRx in 2009.

The 2012 and 2013 figures could be significantly different than 2011:

  • Express Scripts, which operated the sixth-largest pharmacy in 2011, is attempting to acquire Medco. (See ESRX-MHS: Strategic and Market Analysis.) The transaction is being scrutinized by the Federal Trade Commission, however, and may not be completed. 
  • Walgreen is now out of Express Scripts’ retail pharmacy network, effective on January 1, 2012. (See Walgreen and Express Scripts Play Chicken.) As a result, consumers with Express Scripts as their PBM will no longer be able to use third-party insurance at a Walgreens pharmacy, putting about $5.3 billion of Walgreens’ prescription revenue at risk. The final sales outcome of this dispute is still uncertain.
A few other comments:
  • Many large companies operate with multiple dispensing formats, although the exhibit only lists the primary dispensing format for each company. 
  • Market share in a particular geographic region can differ greatly from the national averages. A new exhibit in the report shows prescription revenue share for the four largest chains in the top 20 U.S. metropolitan markets. 
  • Note that total pharmacy industry revenues differ from previous reports due to data restatements by IMS and NACDS. For example, pharmacy industry revenues for 2009 were reduced by $7.2 billion between our 2010-2011 and the forthcoming 2011-2012 economic reports.
I’ll tell you more when the report in launched next week. Stay tuned!

P.S. Feel free to cite or link to these estimates. As a friendly reminder, please attribute the source properly.


  1. PUTT-Dave MarleyJanuary 07, 2012

    I might buy just to see if you mention spread pricing of generics (which increases employer cost by as much as 15% as a MAJOR profit center for PBMs. I'll also be anxious to see what your analysis shows of the PBMs profit models with specialty drugs, and where the spread is beyond huge.

  2. Yes, Dave, I discuss and quantify how both retail and mail pharmacies earn gross profits from spreads. You'll certainly be interested in 
    Exhibit 49: PBM EBITDA per Equivalent Script, by Channel and Drug Type, 2011.