On The Radar – 27th Edition
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Specialty drug costs are projected to increase 32% by 2028, driven primarily by rising utilization rather than higher prices. While biosimilars continue to reduce some costs, expanding indications and new therapies are pushing overall specialty spending higher.
➡ Why it matters: Employers will need stronger utilization management and specialty care strategies as specialty medications continue to drive pharmacy spend.
New analysis highlights how vertically integrated PBMs continue to face scrutiny over patient steering, pharmacy ownership, and reimbursement practices. Federal and state lawmakers are increasingly targeting ownership structures that critics argue reduce competition and transparency.
➡ Why it matters: The conversation is shifting beyond pricing toward how market consolidation influences patient access and employer costs.
Medical cost trends are expected to reach a 15-year high in 2027, fueled by specialty medications, provider consolidation, inflation, AI investments, and continued challenges under the No Surprises Act.
➡ Why it matters: Employers are moving beyond incremental plan changes and looking for long-term strategies to manage healthcare spending.
Even with nearly $800 billion spent annually on prescription drugs, affordability remains a significant barrier for many patients. New attention is also being placed on improving access to emerging high-cost therapies, including cell and gene treatments.
➡Why it matters: As breakthrough therapies become more common, balancing affordability with patient access will become increasingly important.
Lawmakers continue advancing bipartisan legislation designed to improve PBM transparency, prohibit patient steering, require rebate pass-throughs, and strengthen protections for independent pharmacies.
➡Why it matters: Momentum for PBM reform continues to build, signaling additional regulatory changes may still be ahead.
New research found that first-time prescription denials increased 67% between 2018 and 2024, with nearly half of affected patients receiving no alternative medication within 90 days. Growing use of prior authorization and other utilization management tools is creating additional barriers to timely treatment.
➡Why it matters: Delayed or denied access to medications can worsen health outcomes, increase long-term healthcare costs, and add to the administrative burden for providers and patients alike.
Industry leaders are increasingly arguing that ownership models and financial incentives may have a greater impact on drug costs than transparency alone. The discussion is shifting toward whether organizations are structured to prioritize patients or shareholders.
➡ Why it matters: Employers are evaluating pharmacy partners based on both pricing and how incentives are aligned.
Prescription medications accounted for more than 40% of fully insured healthcare cost growth last year, led by specialty therapies, GLP-1 medications, and facility-administered drugs.
➡ Why it matters: Pharmacy spending continues to outpace nearly every other category of healthcare spending, reinforcing the need for proactive benefit management.
Final Thoughts
Specialty medications, rising utilization, and continued PBM reform remain dominant themes across the healthcare landscape. As pharmacy spending becomes an even larger driver of employer healthcare costs, organizations are increasingly prioritizing transparency, accountability, and smarter benefit strategies to improve affordability while preserving access.
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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