On The Radar – 33rd Edition
By
New U.S. Customs and Border Protection requirements could disrupt access to medications imported from licensed international pharmacies. Originally scheduled for October 22, implementation has been delayed until January 20, 2027, giving patients and pharmacies additional time to prepare. Advocates warn that the added documentation and review requirements could create significant barriers for Americans who rely on international prescriptions.
➡ Why it matters: Changes to prescription importation rules could limit affordable medication access for individuals already struggling with high U.S. drug prices.
Employer health benefit costs are projected to increase between 8.2% and 9% in 2027, potentially reaching 11% without cost-management measures. Medical inflation, advanced cancer treatments, GLP-1 utilization, and emerging claims-processing dynamics are contributing to what could be the steepest annual increase in more than two decades.
➡ Why it matters: Employers face mounting pressure to evaluate plan design, vendor relationships, and long-term cost-management strategies as healthcare expenses continue to outpace budgets.
Facing an estimated $370 billion in revenue exposure by 2032 from expiring patents, major pharmaceutical manufacturers are increasingly acquiring smaller biotechnology companies rather than relying exclusively on internal drug development. Smaller biotech firms now originate approximately 65% of industry pipelines, with acquisitions increasingly focused on obesity, metabolic diseases, and other high-value therapeutic areas.
➡ Why it matters: Pharmaceutical consolidation and shifting development strategies could influence future drug pricing, competition, and the types of therapies entering employer health plans.
The FDA approved all nine novel therapy submissions reviewed in September 2026, including treatments for rare genetic disorders, breast cancer, type 2 diabetes, and Parkinson’s disease. The approvals reflect continued pharmaceutical innovation across complex and often costly therapeutic categories.
➡Why it matters: New treatment options can improve access to innovative care while introducing additional clinical and financial considerations for employers and health plans.
Employer coverage of GLP-1 medications for weight management more than doubled from 17% in 2024 to 37% in 2026. Meanwhile, specialty medications continue to account for a disproportionate share of pharmacy spending, with a small percentage of claimants responsible for more than one-third of plan costs.
➡Why it matters: Expanding GLP-1 coverage and specialty drug utilization are forcing employers to balance employee access, clinical value, and sustainable pharmacy spending.
Alternative PBMs are gaining consideration from employers seeking greater transparency, but customer satisfaction scores declined from 7.9 to 7.3 in 2026. Meanwhile, satisfaction with the Big Three PBMs improved to 7.1, narrowing the gap between traditional and alternative pharmacy benefit managers.
➡Why it matters: Employers evaluating alternative PBMs need to look beyond initial pricing proposals and assess long-term service quality, operational performance, and measurable financial impact.
Federal lawmakers and regulators are advancing proposals targeting PBM compensation, rebate practices, data access, and vertical integration. Recent developments include expanded fiduciary oversight proposals, Medicare Part D compensation reforms, and FTC enforcement efforts focused on insulin pricing practices.
➡ Why it matters: As regulatory expectations evolve, employers and brokers must stay informed about new transparency requirements, contractual protections, and fiduciary responsibilities.
A Health Care Cost Institute analysis found that rising prices accounted for 90% of the increase in employer healthcare spending between 2019 and 2023, while utilization grew just 1.8%. Brand-name prescription prices increased 59%, and gross GLP-1 spending quadrupled during the period.
➡ Why it matters: Employers may need to focus more heavily on underlying healthcare prices, provider contracts, and pharmacy pricing structures rather than relying primarily on utilization management.
Growing demand for GLP-1 medications is accelerating pharmaceutical manufacturers’ adoption of direct-to-consumer healthcare platforms. Programs such as LillyDirect and PfizerForAll combine virtual consultations, prescribing, and home delivery, creating new pathways for patients to access medications outside traditional insurance and PBM arrangements.
➡ Why it matters: Direct-to-consumer models could reshape medication access and pricing expectations, particularly for treatments with inconsistent insurance coverage.
A report from the American Medical Association found that the four largest PBMs controlled 75% of the market in 2024, up from 70% in 2022. The report also found that all ten of the largest PBMs are vertically integrated with health insurers, raising concerns about competition and financial incentives across the pharmacy supply chain.
➡ Why it matters: Growing PBM consolidation reinforces the importance of evaluating vendor incentives, contract transparency, and the competitive dynamics influencing pharmacy costs.
An analysis from the Institute for Clinical and Economic Review found that median annual net launch prices for new prescription medications increased 35% between 2022 and 2025, rising from $190,000 to $257,000. Nearly one-quarter of newly launched drugs in 2025 carried annual net prices exceeding $500,000.
➡ Why it matters: Escalating launch prices create significant financial exposure for employers and health plans as innovative therapies enter the market at increasingly higher costs.
Final Thoughts
Employer healthcare costs are facing another year of significant pressure, with rising drug prices, expanding specialty utilization, and continued industry consolidation contributing to the challenge. At the same time, PBM reform, alternative pharmacy models, and direct-to-consumer platforms are reshaping how medications are priced, managed, and accessed.
The recurring theme is that controlling healthcare costs requires more than managing utilization or changing vendors. Employers and advisors increasingly need to examine underlying prices, contract performance, market competition, and the long-term financial impact of emerging therapies.
We’ll be back in two weeks with more news you need to know. If you’d like a custom analysis or want to explore SHARx program options for your clients, contact us!
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