On The Radar – 10th Edition
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As healthcare costs rise faster than wages and inflation, more employers are turning to self-funding to regain control and transparency. The roadmap includes assessing readiness, selecting strong stop-loss coverage, using data to drive proactive care management, improving member education, preparing for claims variability, and building strong partnerships with TPAs, PBMs, and advisors.
➡ Why it matters: Self-funding can transform benefits from a fixed expense into a more predictable and strategic asset.
The “Big Three” PBMs still control most of the market, but employers are increasingly seeking alternatives that offer 100 percent pass-through pricing and clear fee structures. As a result, newer transparent PBMs are gaining traction and forcing the large incumbents to launch new pricing models in response.
➡ Why it matters: Employers are signaling a strong shift toward transparency, challenging the legacy rebate-driven system.
A national survey confirms a direct link between PBM transparency and lower premiums. Employers using transparent PBMs were 1.6 times more likely to report lower premiums, while many still cannot access complete claims data, limiting their ability to implement value-driven strategies.
➡ Why it matters: Access to claims data is becoming a core component of cost management and equity.
The article argues that the best way to reduce drug prices is to bypass the drug supply chain’s intermediaries. Instead of relying on price controls, the piece advocates for direct-to-consumer drug models that eliminate PBM-driven incentives tied to higher list prices.
➡ Why it matters: The pressure on PBMs is growing as innovators prove that transparent, direct pricing can lower patient costs.
The FDA is working to shorten biosimilar development timelines, but restrictive patent office policies are slowing progress. Patent thickets and limits on patent challenges continue to delay market entry of lower-cost alternatives.
➡ Why it matters: Faster FDA approvals alone are not enough. Patent reform is becoming essential for true biosimilar savings.
Healthcare costs reached $17,496 per employee in 2025. Employers are spreading risk by offering more plan options, directing employees to higher-value provider networks, and building condition-specific programs for issues like diabetes, musculoskeletal needs, and fertility.
➡ Why it matters: Customization and targeted care programs are replacing one-size-fits-all plan design.
Medication shortages often stem from consolidation among manufacturers and supply chain distortions created by PBMs, not from random logistics issues. Seniors and chronic care patients face the worst consequences.
➡ Why it matters: Transparency in the supply chain is increasingly relevant to benefit design and plan communication.
Lawmakers on both sides agree that the 340B program has drifted from its mission. Large hospitals and PBMs often capture the spread between discounted acquisition costs and high reimbursements, while patients rarely receive the intended financial relief.
➡ Why it matters: 340B reform could reshape pricing, reimbursement, and pharmacy access across the country.
California’s SB-41 requires PBMs to act in the financial best interest of employers, increases transparency mandates, and restricts spread pricing. This positions plan sponsors to negotiate stronger contracts and demand more visibility into true drug costs.
➡ Why it matters: Fiduciary obligations are becoming enforceable, not optional.
New Supreme Court rulings and recent lawsuits reveal heightened ERISA liability for benefit leaders. Issues include failure to benchmark vendors, lack of RFP competition, hidden fees, and undisclosed AI-driven claim denials by TPAs.
➡ Why it matters: Employers are increasingly required to demonstrate active oversight of PBM, TPA, and partner performance.
With Americans paying more for prescriptions than any other country, the article calls for reforms that speed generic competition, close loopholes, and hold drug companies accountable for lobbying practices that drive up costs.
➡ Why it matters: Public demand for affordability is shaping policy and reform momentum.
Eli Lilly’s decision to move its own employee plan from CVS Caremark to Rightway signals growing employer willingness to leave traditional PBMs. It also underscores the competitive tension between drug manufacturers and vertically integrated PBMs.
➡ Why it matters: High-profile moves like this influence market confidence in smaller, transparent PBMs.
Experts predict that generic semaglutide will require employers to adopt step-therapy models that start with lower-cost generics before covering brand-name GLP-1s. Broad GLP-1 use may increase upfront costs but lower other medical expenses over time.
➡ Why it matters: GLP-1 coverage strategy is becoming a core component of long-term cost planning.
Final Thoughts
This cycle highlights the accelerating move toward transparency, legal accountability, and employer-led reform. As specialty drug costs rise, PBM models shift, and self-funding becomes more sophisticated, employers who embrace data, visibility, and proactive strategy will be best positioned to control costs and improve member outcomes.
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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