DRUG DISCOUNT CARD MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The Drug Discount Card Market size was valued at US$ 1,674.2 Million in 2023 and is expected to reach US$ 2,894.4 Million by 2030, growing at a compound annual growth rate (CAGR) of 8.1% from 2023 to 2030. Drug discount cards, also known as prescription drug discount cards or pharmacy savings cards, are a popular and cost-effective way for consumers to reduce their out-of-pocket expenses on prescription medications. These cards are typically distributed by various entities, including pharmaceutical companies, independent card providers, non-profit organizations, and government programs, with the primary aim of providing discounts on the purchase of prescription drugs. These cards work by negotiating lower prices for medications with participating pharmacies and passing the savings on to the cardholders. They are not insurance but serve as a supplementary tool to help individuals, especially those without comprehensive health insurance coverage, access necessary medications at a more affordable cost.

Drug Discount Card Market Regional Insights:

• North America is expected to be the largest market for the drug discount card market during the forecast period, accounting for over 42.5% of the market share in 2022. The growth of the market in North America is attributed to the high medication costs and increasing adoption of discount cards by the uninsured population.
• Europe is expected to be the second-largest market for the drug discount card market, accounting for over 28.7% of the market share in 2022. The growth of the market in is attributed to the rising prevalence of chronic diseases, thus driving the demand for prescription medications. Moreover, in August 2021, the European Journal of Epidemiology published data according to which each year, chronic diseases claim the lives of 4 million individuals in the European Union, representing a staggering 85% of all deaths within the Europe.
• Asia Pacific is expected to be the fastest-growing market for the drug discount card market, which is expected to grow at a CAGR of over 20.0% during the forecast period. The growth of the market in Asia Pacific is attributed to the growing awareness and adoption of discount cards along with increasing healthcare spending.

Figure 1. Global Drug Discount Card Market Share (%), by Region, 2023

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Analyst’s View:

The drug discount card market is expected to continue its growth trajectory, as the rising cost of healthcare remains a global concern. As the world's population ages, the demand for prescription medications is expected to increase, making these cards increasingly relevant. However, there are challenges such as the need for regulatory compliance and ensuring the legitimacy of card providers. In some regions, government programs are stepping in to regulate and provide official drug discount cards to ensure fair pricing and quality control. Analysts anticipate ongoing innovation in the market, with more card providers offering value-added services and expanding their networks of participating pharmacies. As with any market, competition will be a driving force, and companies that can effectively target specific demographics and offer a diverse range of benefits are likely to thrive in this evolving market.

Drug Discount Card Market Drivers:

• High Cost of Prescription Drugs: The high and continually rising cost of prescription medications is a major factor driving growth in the drug discount card market. The sticker prices of both generic and brand name drugs have increased substantially in recent years. A report from 2012 to 2017 was published by National Center for Biotechnology Information according to which the costs of oral and injectable generic drugs rose by 37% and 15% respectively. The increasing prices of prescription drugs has made medications unaffordable for many uninsured and underinsured patients. Drug discount cards provide significant savings on prescription costs, with average discounts of 10-25% on brand name drugs and 55-60% on generic drugs through these cards. The high prescription drug prices are propelling uninsured and underinsured patients to utilize drug discount cards and programs to reduce their medication costs.
• Large Uninsured and Underinsured Population: A large population of uninsured and underinsured people in the U.S. who have to pay high prices for their prescription drugs is a key driver for the drug discount card market growth. According to data provided by Kaiser Family Foundation (KFF), an independent source for health policy research, polling, and journalism, over 31 million individuals in the U.S. were uninsured in 2021. Additionally, millions are underinsured, having insurance plans with high deductibles and copays. Without adequate prescription drug coverage, the retail prices of medications can be prohibitively expensive. Drug discount cards serve the large uninsured and underinsured population by making their required prescription drugs more affordable through discounts. Discount cards can lower out-of-pocket costs by 60% for uninsured patients. The market is further driven by this large target demographic dependent on discount cards to reduce their prescription costs.
• Increasing Online Adoption of Online Platform: The increasing adoption of online platforms and m-health apps for managing healthcare is driving the uptake of digital drug discount cards. Online platforms offer free discount cards that can be downloaded digitally via web or mobile apps. The cards are easily accessible through online accounts. This provides convenience and saves time compared to using paper cards. Additionally, online platforms allow consumers to conveniently compare prescription costs between nearby pharmacies along with the discounts applicable. The adoption of e-prescriptions is also surging, which increases digital access to discount cards for medicines ordered online or delivered through mail. Such technological trends are boosting access and the use of digital discount cards for prescription savings.
• Involvement of State Governments to Provide Drug Discounts: State governments recognize the importance of ensuring affordable access to prescription medications for their citizens, particularly for those who are underinsured or lack comprehensive health coverage. By collaborating with prescription drug discount card programs, state governments can actively support their constituents in lowering their healthcare costs, which is an essential public health concern. For instance, on October 2, 2023, Governor Ned Lamont and Comptroller Sean Scanlon, Governor of Connecticut announced the launch of a prescription drug discount card program to receive savings on certain prescription drugs.

 Drug Discount Card Market Opportunities:

• Expansion into Emerging Markets: There are significant growth opportunities for drug discount card companies in emerging markets across the Asia Pacific, Latin America, and Africa regions. Many of these countries have large underinsured and uninsured populations due to lower healthcare spending and infrastructure compared to developed regions. The out-of-pocket expenditure on drugs is high in these markets. Local startups in emerging markets are introducing innovative discount card programs and e-health platforms tailored to their markets. For instance, In Africa, m-health app providing discounted prescriptions and telehealth services. The opportunity exists for global discount card players to expand their services through partnerships with local players in these high potential emerging markets. For instance, in January 2019, The Journal of mHealth announced that eHealth Africa is included in the Journal of mHealth's Global Digital Health 100. The list includes organizations and companies that demonstrate the greatest potential to change the way healthcare is delivered.
• Discount Cards for OTC Drugs: Another opportunity is the untapped potential for discount cards targeted towards over-the-counter (OTC) medications. While discount cards traditionally provide savings on prescription drugs, they can also be applied to high-cost OTC medicines for chronic conditions. This can improve access and adherence to OTC drugs that are not covered by insurance. Partnerships with consumer healthcare companies can unlock discounts on leading OTC brands. Startups are entering this space with discount cards focused on non-prescription drugs. With consumers bearing 100% of OTC costs, discount cards in this space have high relevance and opportunity.
• Customized Services for Employers: Employers are emerging as a key opportunity area for drug discount card companies. Firms bear significant healthcare costs for employees, including prescription drug expenditures. This provides incentive for employers to seek prescription savings programs to lower benefits costs. Customized discount card options can be offered as voluntary employee benefits. Insurance providers now offer employer-focused prescription discount plans covering all employees. Strong opportunity exists for drug discount cards to tap the employer segment through benefit programs tailored to firms across industries and sizes.

Drug Discount Card Market Trends:

• Adoption of Data Analytics: The adoption of big data analytics is an important trend impacting the drug discount card market. Companies are utilizing advanced data analytics to gain insights on prescription fill patterns, medications with highest spend, and savings opportunities. This data enables the development of targeted programs, providing maximum savings on high cost therapy areas. Data analytics also allows measuring program returns on investment (ROI) for pharmaceutical partners. For instance, a discount platform uses real-world data and analytics on doctors' prescribing patterns to create personalized prescription savings programs. The trend of leveraging data and analytics will continue allowing value enhancements.
• Shift to Value-based Care: The shift from fee-for-service to value-based care models is an important trend. This transition places emphasis on improving outcomes and lowering treatment costs. As part of this, healthcare systems are integrating outpatient prescription drug benefits into bundled payments contracts. Prescription discount cards allow systems to reduce pharmacy benefit costs passed onto patients. Leading cards are being built into IT systems enabling use during point-of-care. Increased adoption by health systems to lower outpatient prescription costs for superior population health management is a key trend.

Drug Discount Card Market Restraints:

• Lack of Awareness among Key Demographics: While adoption of drug discount cards is high among the elderly, awareness and use of discount cards remains low among certain demographics like the uninsured young population who can highly benefit from these. According to data published by National Institute of Health in 2019, only 31% of the millennial population was aware of prescription discount programs. The expense of prescription drugs is a burden for young individuals with little insurance. The market potential is impacted by low knowledge among these important target groups, who may unleash tremendous growth. This emphasizes the necessity of targeted marketing and education initiatives.
• Discount Programs by Pharma Companies as well as Government Organizations: The drug discount card market growth can be limited by prescription assistance and co-pay support programs directly offered by pharmaceutical manufacturers and various state government. Most pharmaceutical companies provide free medication coupons or co-pay cards to assist patients in affording costly branded drugs. Pfizer, AbbVie, and Eli Lilly and company are among those offering such programs, helping patients with out-of-pocket costs on their brands. While beneficial, the discount offerings by drug makers reduce the value proposition of third-party discount cards for competing on branded drug savings. This can restrain patients from paying for discount card memberships. For instance, the State of California provides prescription drug discount programs for Medicare recipients to obtain their prescription drugs at a cost no higher than the Medi-Cal price for those drugs.

Figure 2. Global Drug Discount Card Market Share (%), by Sales Channel, 2023

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Recent Developments:

New product launches:

• On September 19, 2023, Elevance, a health company’s pharmacy benefit manager launch CarelonRx, launch a new program that aims to make it easier for members to access drug discounts at the pharmacy counter
• On January 24, 2023, Amazon Pharmacy, the company offering free, two-day home delivery of prescriptions to Amazon Prime subscribers. introduced RxPass, a US$5 prescription subscription new Prime membership benefit from Amazon Pharmacy that provides patients with affordable access to generic medications that treat more than 80 common health conditions for just US$5 a month
• In September 2021, GoodRx, an American healthcare company that operates a telemedicine platform and free-to-use website and mobile app that track prescription drug prices launched a new gold subscription plan providing access to lower prescription prices, free delivery, and 24/7 doctor visits for a monthly fee. This expanded GoodRx's monetization strategies beyond discounted prescriptions.
• In June 2021, Walmart, a retailer corporation launched the Walmart Plus Rx for Delivery prescription savings program, allowing the delivery of medications nationwide for US$35 per year.

Acquisition and partnerships:

• On September 14, 2023, GoodRx, a U.S.-based healthcare company that operates a telemedicine platform and free-to-use website and mobile app that track prescription drug prices, announced a partnership with MedImpact, an independent, trend-focused pharmacy benefit manager (PBM), to integrate its drug coupons at the point of sale
• On July 12, 2023, CVS Caremark, a CVS Health company and GoodRx, a leading resource for healthcare savings and information, announced the launch of Caremark Cost SaverTM to help lower pharmacy out-of-pocket drug costs for CVS Caremark clients' members
• In October 2022, Express Scripts, a pharmacy benefits management business of Cigna Corporation, an Insurance company announced a new strategic collaboration with Centene, a managed care company to provide greater prescription drug savings

Top Companies in the Drug Discount Card Market:

• GoodRx
• SingleCare
• WellCard Savings
• RxSaver
• Optum Perks
• Kroger Prescription Savings Club
• ScriptSave
• Walmart Rx Savings Program
• Prescription Hope
• FamilyWize
• NeedyMeds
• Humana

Definition: The drug discount card market refers to the market providing discounted prescription medications through the use of membership cards or coupons. Drug discount cards help uninsured or underinsured patients save money on their prescription drugs by providing discounts that range from 10-25% on brand name and generic medications. These cards are provided by private companies, non-profit organizations, or government programs and can be used at most major pharmacies across the U.S. The discounts enable patients to purchase their required prescription medications at reduced prices, making them more affordable. The market is driven by rising drug prices and the high cost of health insurance coverage. Drug discount cards are easy to obtain and use, requiring no eligibility verification or enrollment process in most cases. They provide significant savings for patients with chronic medical conditions requiring long-term prescriptions.