Thursday, July 20, 2017

2016’s Top Retail Pharmacy Chains, According to Drug Store News

Drug Store News (DSN) has just released its latest rundown of the top pharmacy retailers in the mightily-titled PoweRx 50. (Links below.)

I recommend the PoweRx list to anyone who competes with, sells to, or otherwise interacts with retail pharmacy chains. This useful resource also provides brief profiles of most organizations.

Below, I show DSN's top 25 retailers. This year, CVS Health tops the DSN list, with $60.8 billion in retail prescription sales. Colorado-based chain Pharmaca Integrative Pharmacy is no. 50, with $73 million in prescription sales—0.1% of CVS Health’s retail revenues.

Note that the DSN list is not a complete look at the U.S. pharmacy industry. It excludes many large mail and specialty pharmacies. It also inconsistently (and IMHO, inaccurately) aggregates independently-owned pharmacies by wholesaler and buying group. I highlight how the list differs from our broader but shorter list shown in The Top 15 U.S. Pharmacies of 2016.

Here are links to the DSN lists:
Here are the largest 25 retail pharmacies for 2016, as measured by Drug Store News. See the original DSN article for the footnotes and company profiles.

[Click to Enlarge]

In the Drug Channels Institute’s (DCI) 2017 Economic Report on U.S Pharmacies, Exhibit 29 lists the “Largest 15 U.S. Pharmacies, by Total Prescription Revenues, 2016." The list is available for free download in The Top 15 U.S. Pharmacies of 2016.

Key differences between our lists:
  • PBM-owned Specialty and Mail Pharmacies: Many of the largest U.S. pharmacies are now central-fill mail and specialty pharmacies operated by such PBMs as Express Scripts, Caremark, and UnitedHealth. This reflects the growing role of specialty drugs in the pharmacy industry, per Our Exclusive 2021 Outlook for Specialty Pharmacy Prescription Revenues. These pharmacies are excluded from DSN's list.
  • Other Specialty Pharmacies: On the DSN list, Diplomat Pharmacy is the only independent specialty pharmacy. Other larger independent and wholesaler-owned specialty pharmacies are excluded from DSN’s list. These include Avella, Biologics (McKesson), U.S. BioServices (AmerisourceBergen), BioPlus, and Senderra. See our list at The Top 15 Specialty Pharmacies of 2016. Oddly, the DSN list appears to exclude specialty pharmacy revenues earned by Walgreens and Schnuck’s Markets.
  • Franchise Programs and Marketing Groups: The DSN list includes such wholesaler marketing/franchise groups as Good Neighbor Pharmacy and Health Mart. DSN includes all of Cardinal’s independent pharmacy customers collectively as the third-largest retail pharmacy, with $19.4 billion in prescription revenues.

    However, these groups are comprised of independently owned businesses. I don’t consider their inclusion to be an accurate representation of the market. (Note that Cardinal’s Medicine Shoppe and Medicap stores are listed separately, at # 15 on the list.) FYI, our DCI report includes these organizations in Exhibit 37 (“Pharmacy Franchise and Marketing Programs, 2016”).
  • Data Differences: The DCI figures are based on calendar year data, which do not always correspond to the fiscal year data provided in the DSN list. Our list includes prescription revenues from all dispensing format—retail, mail, long-term care, and specialty pharmacies. We also estimate pro forma revenues for mergers and acquisitions. The DCI list combines Walmart and Sam’s Club, while DSN lists them separately.
Despite these differences in approach, the DSN ranking is a useful industry reference with a mixture of sugar, spice, and everything nice.

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