Direct Answer
10 SEC filers are classified under the Standard Industrial Classification codes that describe the pharmacy & benefit services industry, and their latest annual reports show $1.35 trillion of combined revenue and a median operating margin of 1.0%. Investors should still evaluate its revenue model, industry-specific KPIs, valuation framework and the risks that can change the group's economics.
Industry Overview
Pharmacy and benefit service companies manage drug benefits for employers and health plans, negotiate prices with manufacturers and run mail and specialty pharmacies. Profit comes from rebates, spreads and service fees. The first numbers to compare across companies here are adjusted prescriptions and growth, gross profit per script and rebate retention.
Key Industry Metrics
- Adjusted prescriptions and growth: Prescription count with 90-day fills counted as multiple 30-day fills, and its growth. It is a standard volume measure, reflecting client wins and losses and utilization.
- Gross profit per script: Gross profit earned on each prescription after drug cost. It reflects rebates, spreads and fees, and compression here can offset volume growth.
- Rebate retention: Share of manufacturer rebates the company keeps instead of passing to clients. Retention supports profit, but regulation and client demand for pass-through lower it.
- Specialty pharmacy share: Portion of revenue from high-cost specialty drugs. These drugs raise revenue per script and often carry different margins.
- Client retention: Share of employer and plan clients kept at renewal. Contracts are large and cyclical, so lost clients can reduce volume noticeably.
Primary Macro Drivers
- Drug pricing and rebate mix: The mix of rebates and net prices on brand drugs sets how much the company keeps from manufacturers, which moves gross profit per script.
- Specialty drug growth: Costly specialty drugs make up a rising share of spending, so their growth lifts revenue and the contribution of specialty pharmacy.
- Client wins and losses: Winning or losing a large employer or plan moves prescription volume sharply, so client contract cycles drive adjusted prescriptions.
- Regulation of rebates and spread pricing: Rules on rebates and spread pricing can change how companies are paid, which affects gross profit per script and rebate retention.
Major Risks
- Regulatory and legislative reform: New laws or regulator actions on rebates and transparency could change how profit is made; watch legislative proposals and company disclosures.
- Client concentration: A few large clients make up much of volume, so a lost contract moves results; watch client retention and concentration.
- Margin pressure: Clients demand lower prices and more pass-through of rebates, which narrows gross profit per script; watch rebate retention and pricing commentary.
- Litigation: Lawsuits over drug pricing and practices can bring settlements and change terms; watch legal proceedings and reserves.
Industry Characteristics
| Characteristic | Profile |
|---|---|
| Cyclicality | Defensive |
| Capital Intensity | Low |
| Regulatory Intensity | Medium |
| Industry Maturity | Mature |
| Geographic Importance | U.S. |
Pharmacy & Benefit Services Filers in the SEC Record
10 companies with annual reports in the dataset are classified by the SEC in the Standard Industrial Classification codes 5912, 5122. Their latest fiscal years end between 2025 and 2026, and together they reported $1.35 trillion of revenue. Median revenue growth over the prior year was 8.6%. Median operating margin was 1.0% and median net margin 0.5%. Median total liabilities were 67% of total assets, and 6 of 10 reported a profit in their latest year.
| Company | Revenue | Growth | Operating margin | Net margin | Year |
|---|---|---|---|---|---|
| Mckesson Corp | $403.4 billion | 12.4% | 1.5% | 1.2% | FY 2026 |
| Cvs Health Corp | $402.1 billion | 7.8% | 1.2% | 0.4% | FY 2025 |
| Cencora, Inc. | $321.3 billion | 9.3% | 0.8% | 0.5% | FY 2025 |
| Cardinal Health Inc | $222.6 billion | -1.9% | 1.0% | 0.7% | FY 2025 |
| Nu Skin Enterprises, Inc. | $1.5 billion | -14.3% | 4.4% | 10.8% | FY 2025 |
| Guardian Pharmacy Services, Inc. | $1.4 billion | 17.9% | 5.0% | 3.4% | FY 2025 |
| Petmed Express Inc | $179 million | -21.1% | -32.8% | -32.0% | FY 2026 |
| Cosmos Health Inc. | $65 million | 19.9% | -25.6% | -29.3% | FY 2025 |
The 8 largest of 10 by revenue. Source: each company's own annual report as filed with the SEC (XBRL data), figures in U.S. dollars. A company's SIC code reflects its main business as the SEC records it, so it can differ from how an index provider or analyst classifies the company, and a diversified group appears under only one code.
Where to Go Next
The Pharmacy & Benefit Services guide describes how the industry earns money, what to measure and what can go wrong. To see how it compares, read the neighbouring industries in the same sector, then apply the same checks to a specific company.
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Frequently Asked Questions
What are the main KPIs for the Pharmacy & Benefit Services industry?
Key performance indicators for the Pharmacy & Benefit Services industry include: Adjusted prescriptions and growth, Gross profit per script, Rebate retention, Specialty pharmacy share, Client retention. Which matter most depends on the company's model, so compare them across several companies rather than relying on one.
How cyclical is the Pharmacy & Benefit Services industry?
The Pharmacy & Benefit Services industry is generally defensive, meaning demand tends to remain relatively stable regardless of the economic cycle. Companies in this space can provide portfolio stability during recessions, though growth may lag in strong expansions.
What are the biggest risks in the Pharmacy & Benefit Services industry?
The primary risks for Pharmacy & Benefit Services companies include: Regulatory and legislative reform, Client concentration, Margin pressure, Litigation. Investors should assess each company's exposure to these factors and its track record of navigating them.