Three Forces Are Changing Pharmacy Spend
Prescription drug spending is now one of the fastest-growing areas of employer healthcare costs. It’s reported that prescription drug spending among large employers increased 9.4% in 2025, driven in part by growing utilization of GLP-1 medications.
And GLP-1s are only part of the story.
GLP-1 Medications
Few medications have changed the benefits conversation as quickly as GLP-1s, which can now represent 15–25% of pharmacy spend for some plans.
Originally developed for diabetes, their growing use for weight management has created a difficult balance between access, affordability, and long-term sustainability.
Employers are increasingly having to consider more than whether they cover these medications. Who qualifies? What utilization controls are in place? Is clinical support included? And do the potential long-term health outcomes justify the immediate cost?
There is no universal answer. For some employers, broader access may align with their workforce and long-term health strategy. For others, the cost may be unsustainable under their current plan.
But with GLP-1s consuming a growing share of pharmacy dollars, avoiding the conversation is becoming increasingly difficult.
Specialty, Cell and Gene Therapies
Some of the greatest pharmacy risks come from treatments used by the fewest people.
Specialty medications now treat complex conditions ranging from cancer and autoimmune diseases to rare genetic disorders, while cell and gene therapies continue to expand what is medically possible.
In some pharmacy populations, less than 1% of claims can account for more than 50% of pharmacy spend.
That creates a very different financial risk than traditional prescription medications.
For level-funded and self-funded employers, specialty pharmacy management and stop-loss protection become especially important. Fully insured employers may have less direct exposure, but these costs ultimately contribute to the premiums employers pay.
Oncology and Autoimmune Treatments
Cancer and autoimmune therapies represent another significant source of specialty pharmacy spend, with oncology alone accounting for more than 20% of specialty drug spending in some industry analyses.
Unlike a single catastrophic claim, many of these medications require sustained treatment over long periods of time.
They also demonstrate why medical and pharmacy costs cannot always be evaluated separately.
An expensive medication may help prevent hospitalization, surgery, complications, or other medical expenses. Focusing only on the pharmacy cost can therefore provide an incomplete picture of its overall value.
Pharmacy is no longer a standalone benefit. It is becoming part of the broader healthcare strategy.
What Can Employers Actually Do?
Not every employer has the same tools available.
Small and mid-sized employers may not receive detailed pharmacy claims data. Fully insured employers often have limited visibility into PBM arrangements, rebates, and underlying drug costs. And not every organization has enough scale to negotiate its own pharmacy contract.
But limited control does not mean employers should stop asking questions.
Depending on funding structure and size, employers may be able to evaluate:
GLP-1 coverage and utilization management,
specialty pharmacy strategies,
pharmacy carve-outs,
transparent or alternative PBM arrangements,
manufacturer assistance opportunities,
stop-loss protection,
and employee education and navigation.
The market is already moving in this direction. 41% of large employers are evaluating different contracting models from major PBMs, while 37% are evaluating new and emerging PBMs.
The traditional approach is no longer the only approach worth understanding.
Pharmacy Strategy Is Healthcare Strategy
The goal should not simply be restricting access to expensive medications. These therapies can change lives, improve health outcomes, and sometimes reduce significant medical costs elsewhere in the plan.
The challenge is providing meaningful access while maintaining a benefit program employers can afford long term.
There may not be a perfect solution. But as drug therapies become more sophisticated and expensive, employers should understand what is driving their pharmacy spend, how those dollars are being managed, and what alternatives exist.
Because pharmacy is no longer simply part of the health plan.
It is becoming one of the biggest forces shaping the cost of the health plan itself.
If your organization is beginning to see pharmacy costs become a larger part of your healthcare spend, now may be the right time to ask deeper questions about what is driving those costs, how they are being managed, and what strategies may exist beyond the traditional approach.
