Skip to content

A Year in Review and Projections for the Pharmacy Benefit Industry in 2024

As the year of the dragon readies to swoop in, the year of the rabbit hops to an end. Astrological signs aside, the future of the pharmacy benefit industry will not be written in the stars. While we wait for the future to unfold, here are some reflections on 2023 and predictions for 2024.


As predicted last year, trend for 2023 is expected to finish higher than 2022. Most plans will see trend for 2023 in the low to mid-teens before rebates. Expect rebates to mitigate trend by about 3 ½ to 5 percent. Trend for 2024 is likely to be similar to 2023.

Trend Drivers

Like 2023, non-specialty drugs will surpass specialty drugs in their overall contributions to trend in 2024. This comes as no surprise with the anticipated increased use and interest in the antidiabetic and weight loss GLP-1s.

Specialty dermatogolicals continue to make gains and impact the bottom line for payers but have fallen off the radar for some due to attention focused on non-specialty drugs.

The hype around GLP-1s continues. There will be more focus and interest on tirzepatide than semaglutide. Even after some negative press and associated revised FDA labeling, drug makers are still challenged by supply and demand. Tirzepatide is marketed as Mounjaro for diabetes and Zepbound for weight loss. The FDA approval for weight loss was seen in early November with availability announced in early December, so pharmacies will have supply just in time for those New Year resolutions! Formulary access and preferred tier placement is expected, but it may be delayed for some PBMs.

As mentioned last year, tirzepatide has potential to be one of if not the best-selling drugs of all time, especially if clinical trials around other indications such as atherosclerosis and NASH pan out. However, some things may hold it back. For starters, Zepbound is not one of the slicker or hipper marketing names seen from Pharma. Copay card eligibility is more restrictive than the competition. Compare “a prescription consistent with FDA approved product labeling” versus “a valid prescription for the brand being filled.” The latter accommodates off-label use while the former does not. This is significant given off-label use of 25% to 30% or more may be seen for the antidiabetic GLP-1s in the absence of utilization management.


The pipeline is plentiful with new and novel therapies as well as expanded indications, but few will see the light of day. 2022 saw a success rate of about 6%. For example, the first drug the FDA reviewed for fatty liver disease or Non-Alcoholic Steatohepatitis, obeticholic acid, crashed and burned due to concerns over the drug’s modest efficacy and range of safety problems. The next candidate up is resmetirom with FDA review expected in March 2024. The drug maker seems to have high hopes as evidenced by the public awareness campaigns for the condition already under way online.

Expect activity in the Pulmonary Arterial Hypertension space. Sotatercept, a new and novel therapy, is up for FDA review in March. Unlike current therapies, it has the potential to reverse the characteristic vascular remodeling that underlies the pathology. If approved, costs are estimated at $25K to $30K per month.

Even if a drug gets FDA approval, it may still not make it to market or may be seen later than expected. This has happened with various drugs, including generics and biosimilars. The uptake of biosimilars, while still limited, continues to grow, especially for Humira. Some market segments are seeing more gains than others.

The FDA wrapped up the year with two gene therapy approvals for sickle cell disease. List prices will be below the $3.5M seen with last year’s approval of Hemgenix. Expect $2.2M for Vertex’s Casgevy and $3.1M for Bluebird Bio’s Lyfgenia.

The first of cellular and gene therapies for the masses could be seen in the second half of the year. The FDA will review donaperminogene seltoplasmid for the treatment of diabetic peripheral neuropathy in adults (estimated potential U.S. candidates: 5.5 to 11.2 million adult patients).

Pharmacists and Pharmacies

More than 1,500 pharmacies shuttered doors in 2023. Some of these closures were offset by new openings. Major chains including CVS/pharmacy, Walgreens, and Rite Aid were impacted. Contributing factors for closures included geographic overlap, rising competition from online or virtual pharmacies, low-margin locations, dated facilities, and/or staffing shortages. Bankruptcy was a factor for Rite Aide as well.

Many pharmacy locations cut hours of operation due to labor shortages. The demand for pharmacists has risen and roles expanded in recent years, as mentioned in last year’s article. Some press was seen for a 3-day strike or walkout at a couple of the major chains due to stressful work environments and concerns over patient safety. The days of sign-on bonuses are back. As with other vocations, it is difficult to discern if there is a labor shortage or if there is just a shortage of laborers unwilling to work in poor, underpaid, or unfavorable conditions.

Patient Assistance

Increased scrutiny of these programs continues by drug makers. Plans leveraging alternative funding vendors may run into more instances of patients being found ineligible or disqualified from programs. In response, alternative funding entities may embrace biosimilars when available. Revised methodologies for shared savings may accompany these instances as well.

Changes may be on the horizon for copay accumulator programs. While authorized in 2021 under the Notice of Benefit and Payment Parameters, a ruling in the U.S. District Court for the District of Columbia struck down the Trump-era rule allowing the exclusion of copay assistance from accumulations. In response, the U.S. Department of Health and Human Services advised no enforcement action will be taken against plans that continue to do so. Additional rulemaking and guidance is underway, so watch for more to come.


A dizzying array of legislation continues to get passed, surprising PBMs and payers. Oklahoma, as well as other states, continue efforts to erode ERISA preemption. The interpretation of the various regulations may be subject to debate. Payers should not accept their PBM’s initial interpretation of these regulations at face value. Due diligence and a critical eye is needed by payers and their legal counsels so they do not change more than is required. Keep in mind, PBM contracts may allow the exclusion of claims paid at government-required rates from certain contractual guarantees.

In 2023, Arkansas and Tennessee saw changes to pharmacy reimbursement requirements. At least one PBM has already expanded mail service pharmacy providers beyond their owned facilities. So far, only Costco and a handful of independent pharmacies have been added to the list. In 2024, Minnesota and Florida will see this for specialty pharmacy services as well. While these expanded state-specific pharmacy networks are still in development, the additions may be less than regulators had thought or expected. West Virginia has a variety of requirements in the works as well.


More vertical integration will be seen in 2024. Cordavis, a subsidiary of CVS Health established in Ireland, will work with manufacturers to co-produce biosimilars for the US market. In 2021, Cigna did a similar offshore approach establishing Quallent Pharmaceuticals in the Cayman Islands with a focus on select generic drugs.

Rebate credit language will be common in PBM contracts for 2024 and beyond. This is due to list price reductions seen on several insulin products. While this may seem related to the Inflation Reduction Act, the American Rescue Plan of 2021 may be the true impetus for the list price cuts as it eliminates the rebate cap as of January 1, 2024. Without the list price reductions and protection of the rebate cap, drug makers may have been on the hook to pay Medicaid more than the price of their respective products, costing them millions.

Time will tell how the rebate credit shakes out and what it means to the bottom line given the potential for fuzzy methodologies. At least one of the insulin products initially slated for a list price cut (Levemir) will no longer be marketed in the United States come 2024. In addition to some of the insulins, rebate credits may be seen in the future for respiratory products, biosimilars, as well as other products when it comes to formulary strategies.

At least one PBM offered plan sponsors a “choice” for 2024 formulary strategies while others did not. Given the choice of higher list prices/higher rebates or lower list prices/lower rebates, the vast majority (more than 90%) opted for lower list prices/lower rebates. This reflects well on the fiduciary obligations and responsibilities of plan sponsors and trustees alike.

External pressures from disruptors, payers, and regulators continue to force the industry to evolve with new business models promising simplicity, transparency, and sustainability. Whether it is Optum’s Cost Clarity, Express-Scripts’ ClearNetwork, or CVS’s CostVantage or TrueCost, these new models may further demonstrate the shift in revenue streams with more reliance on administration and service fees and less on rebates. The Devil is in the details, but those details can be hard to come by.


Mark Cuban’s Cost Plus Drugs, saw notable partnership gains in 2023. No doubt a contributing factor to some of the new PBM business model developments. Expect more growth in 2024 with payers and pharmacies alike. In 2022, there were 100 products available. Today, there are about 1,000 products, primarily generics but also a few brands, with plans to more than double this. Acceptance of prescription insurance is limited to select prescription plans, so it is primarily an option for cash-paying customers at this time.


The moving parts of the pharmacy benefit industry can be overwhelming, but our team of pharmacy benefit experts at National CooperativeRx can be a guiding light. By utilizing National CooperativeRx as a trusted advisor, plan sponsors can feel confident in their pharmacy benefit decisions. If you are interested in discussing how changes in the industry may affect your plan, please reach out to your National CooperativeRx account representative.

Looking for more blogs?

Subscribe to our newsletter!