Research shows largest pharmacies are central-fill, mail and specialty pharmacies

The top 15 pharmacies of 2015, ranked by total U.S. prescription dispensing revenues, are largely central-fill, mail and specialty pharmacies, according to the article “The Top 15 Pharmacies of 2015,” which was recently published by Drug Channels Institute and part of its larger 2016 Economic Report on Retail, Mail and Specialty Pharmacies.

“The top tier of dispensing pharmacies — CVS Health, Walgreens Boots Alliance, Express Scripts, Walmart, Rite Aid, and UnitedHealth Group’s OptumRx — accounted for about 64 percent of U.S. prescription dispensing revenues in 2015,” Adam Fein, president of Pembroke Consulting Inc. and the Drug Channels Institute, wrote in the article. “Many of the largest pharmacies are now central-fill, mail and specialty pharmacies operated by such Pharmacy Benefit Managers (PBMs) and payers as Express Scripts, Caremark and UnitedHealth. This reflects the growing role of specialty drugs in the pharmacy industry.”

Drug Channels Institute research estimated that specialty drugs account for 35 percent or more of revenues at these pharmacies.

When recently asked if this affected small pharmacies and consumers, Fein told American Pharmacy News that “Smaller pharmacies remain a vital part of the pharmacy industry. Despite concentration and consolidation, the number of independent, pharmacist-owned businesses remained stable in 2015.”

Fein also explained that smaller pharmacies are exploring ways on how to remain vital.

“Entrepreneurial pharmacy owners are actively pursuing the specialty drug opportunity,” Fein said. “Wholesalers provide a broad range of services intended to increase the profitability and viability of independent drugstores and other smaller customers.”

Fein stressed there are positive effects of the emergence of central fill, mail and specialty pharmacies.

“Payers and manufacturers are exerting more control over specialty drug channels,” Fein said. “Many manufacturers limit and manage the specialty pharmacies eligible to dispense these expensive medications.”

With the positive, also comes the negative, Fein explained.

“To manage costs and improve patient management, PBMs and health plans often further limit the number of specialty pharmacies available to a beneficiary,” Fein told American Pharmacy News. “Payers also determine pharmacy benefit designs, which increasingly shift specialty drug costs to consumers in the form of high co-payments and coinsurance. Payers’ control is enabled by their large share of specialty dispensing.”

In the Drug Channels Institute article, Fein noted that market share in a geographic region can differ greatly from national market share.

“For instance, Walmart, despite being the fourth-largest national pharmacy organization, lacks a significant presence in many major metropolitan markets on the East and West coasts,” Fein said. “Rite Aid has no retail locations in many Midwestern and Southern states. Also, some companies operate with multiple dispensing formats, although the chart identifies only the primary format.”

Fein also pointed out that pharmacy revenues are not equivalent to prescription drug spending (reported by Centers for Medicare and Medicaid Services) and “non-discounted spending” (reported by IMS Health).

Despite the variants, Fein said there is a lot “going on behind these numbers.”