On The Radar – 14th Edition
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Pharmacy benefit oversight is no longer an HR back-office task. It is now a C-suite liability issue. Following high-profile ERISA lawsuits, executives are realizing that third-party administrators do not shield them from fiduciary responsibility. Employers remain legally accountable for ensuring drug costs are reasonable and contracts are actively monitored. The era of aggregate reporting is ending. Claims-level visibility is becoming the new standard.
➡ Why it matters: Transparency is no longer operational. It is governance. Leadership teams that fail to demand visibility are exposing the organization to financial and legal risk.
More than $300 billion in global pharma revenue is set to evaporate as blockbuster patents expire through 2030. In response, the industry’s largest players have amassed $1.2 trillion in capital to fuel aggressive M&A activity. Rather than relying on internal R&D, Big Pharma is buying innovation to fill looming revenue gaps.
➡ Why it matters: Patent cliffs accelerate pricing pressure, consolidation, and specialty pipeline expansion. Employers should expect continued volatility in high-cost categories.
A new KFF poll reveals health care costs have surpassed housing and groceries as Americans’ biggest financial concern. ACA subsidy expirations, rising premiums, and ongoing pricing battles are fueling voter anxiety ahead of election season.
➡ Why it matters: Affordability is no longer theoretical. It is political. Employers sit at the center of that pressure as coverage sponsors.
Prescription abandonment has reached alarming levels, particularly for specialty medications under high-deductible plans. Patients facing large upfront costs are walking away from essential treatments, creating downstream clinical and financial consequences.
➡ Why it matters: Cost shifting is not cost control. When members cannot afford medication, the long-term financial impact multiplies.
The administration’s proposed “Great Healthcare Plan” focuses on MFN drug pricing, expanded direct purchasing via TrumpRx, HSA-based subsidies, and plain-language price transparency across insurers, providers, and PBMs.
➡ Why it matters: If enacted, these proposals would significantly alter how prescription drugs are priced, purchased, and disclosed, with downstream effects for employer plans.
Lawsuits tied to GLP-1 medications are mounting, with allegations of severe side effects and inadequate warnings. Analysts estimate potential liabilities could exceed $2 billion as consolidated cases move forward.
➡Why it matters: Rapid adoption of high-cost therapies carries both clinical and legal risk. Employers must evaluate coverage strategy with eyes wide open.
Elevance expects to lose over 180,000 fully insured members as employers migrate toward self-funded and level-funded models. Rising premiums are driving organizations to seek greater control and financial flexibility.
➡Why it matters: The shift away from fully insured is accelerating. Employers are choosing transparency and control over fixed premium predictability.
2025 saw intensified state-level action targeting PBM ownership structures, rebate pass-through, and delinking compensation from list prices. With federal reform stalled, states are experimenting aggressively.
➡Why it matters: The regulatory patchwork is expanding. Multi-state employers must navigate growing compliance complexity while monitoring evolving pricing models.
Price negotiations under the Inflation Reduction Act are reshaping revenue expectations for major manufacturers. Significant price cuts are now reality for select blockbuster drugs.
➡ Why it matters: Government pricing intervention is here. Expect manufacturers to pivot harder into specialty, biologics, and acquisition strategies.
New shortages hit their lowest levels since 2006, largely due to GLP-1 supply stabilization. However, over 100 long-standing shortages remain, mostly low-margin generics vulnerable to disruption.
➡ Why it matters: Supply resiliency is improving at the top of the market. Fragility remains at the bottom.
Guest commentary once again targets PBMs for opaque rebate practices, vertical integration incentives, and reimbursement pressures squeezing independent pharmacies.
➡ Why it matters: Transparency momentum continues building from every angle: regulators, employers, pharmacies, and patients.
Over half of patients report struggling with prescription costs, and nearly 80 percent say they would use digital tools recommended by providers to compare pricing in real time.
➡ Why it matters: Price transparency is becoming a consumer expectation, not a policy talking point.
Employers are being warned that voluntary benefits may fall under ERISA scrutiny if safe harbor conditions are exceeded. Fiduciary oversight now extends beyond core health plans.
➡ Why it matters: Plan governance risk is widening. Employers must audit not just pharmacy benefits but the entire benefits ecosystem.
Healthcare Dive argues that rebate-driven pharmacy models are structurally misaligned with employer and patient interests. Flat-fee, fully transparent approaches are gaining traction as fiduciary pressures intensify.
➡ Why it matters: The conversation is shifting from reform rhetoric to structural redesign.
Final Thoughts
Pharmacy is no longer just a benefits issue. It is a financial, fiduciary, and reputational risk sitting squarely in the C-suite. Transparency, accountability, and proactive governance are quickly becoming the difference between controlling pharmacy spend and being controlled by it.
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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