On The Radar – 31st Edition
By
An AARP Public Policy Institute report examines how brand-name drug manufacturers can delay generic and biosimilar competition through practices such as patent thickets, product hopping, pay-for-delay settlements, and restrictions involving REMS programs. These strategies can extend exclusivity and postpone the price reductions that typically follow increased competition.
➡ Why it matters: Faster generic and biosimilar competition could reduce prescription costs for patients and employer health plans while putting greater pressure on brand-name pricing.
New research found that 35% of U.S. adults have delayed picking up a prescription, left medication at the pharmacy, or stretched doses because of unclear costs. Nearly half of consumers also reported that they do not consistently know what a prescription will cost before reaching the pharmacy.
➡ Why it matters: Price uncertainty can become an access barrier itself, making greater point-of-care transparency increasingly important for patients and health plans.
A 2026 physician survey found that 96% of physicians have had patients stop taking a medication because of cost without telling them. Providers are also facing a growing administrative burden as practices field repeated calls from patients struggling with prescription affordability.
➡ Why it matters: Medication affordability affects more than adherence. It can also create additional work for providers and contribute to poorer outcomes when patients quietly abandon treatment.
A new 10-question PBM contract framework is designed to help brokers and employers evaluate fiduciary conduct, financial integrity, and oversight protections. The scorecard examines provisions including rebate pass-through, administrative fees, data ownership, and termination rights.
➡Why it matters: As fiduciary expectations increase, employers and advisors need clearer ways to determine whether PBM contracts provide the transparency and control plan sponsors require.
An opinion piece citing Mark Cuban’s observations argues that patients can sometimes find lower prescription prices by paying cash rather than using their insurance. The author attributes the disconnect in part to traditional PBM rebate and pricing structures and advocates for changes intended to better align PBM and advisor incentives.
➡Why it matters: When an insured price can exceed the cash price, employers have another reason to examine how their pharmacy contracts translate into what members actually pay at the counter.
A fact-check published by InsuranceNewsNet presents AHIP’s argument that rising brand-name drug prices are a significant contributor to premium growth. AHIP reports that prescription drugs account for more than 24 cents of every commercial premium dollar and argues that reducing premiums requires addressing underlying healthcare and pharmaceutical costs.
➡Why it matters: The debate over who is responsible for rising healthcare costs continues, but employers ultimately absorb the impact through higher plan spending and premiums.
A new survey found that 88% of surveyed benefits brokers see significant fiduciary compliance gaps within employer health plans, while 64% say their clients are not yet asking about those responsibilities. CAA and ERISA requirements are increasing expectations around PBM compensation, vendor fees, data access, and contract oversight.
➡ Why it matters: Employers may carry fiduciary responsibilities they are not actively managing, making proactive education and documented vendor oversight increasingly important.
Biosimilars have generated more than $36 billion in cumulative healthcare cost reductions over the past decade, with acquisition costs often 25% to 50% below reference biologics. Adoption remains uneven, however, with oncology seeing rapid uptake while other categories continue to encounter rebate and interchangeability barriers.
➡ Why it matters: Biosimilars represent a significant opportunity for specialty drug cost reduction, but employers need formulary and contracting strategies that allow lower-cost competition to translate into actual plan impact.
With health benefit costs projected to rise between 6% and more than 8%, employers are looking beyond higher deductibles and copays. Strategies including PBM contract audits, direct contracting, reference-based pricing, and tighter utilization management are gaining attention as specialty drugs and hospital costs continue to climb.
➡ Why it matters: Employers are increasingly pursuing structural changes instead of simply transferring more healthcare costs to employees.
A Forbes article argues that pharmacy benefits require greater attention from business leaders as specialty medications consume a growing share of health plan spending. The piece recommends stronger contract oversight, claim-level data access, and greater scrutiny of PBM revenue structures.
➡ Why it matters: Pharmacy strategy is increasingly becoming an enterprise-level financial and fiduciary issue rather than an administrative benefits decision.
Growing demand for weight-loss medications is prompting some large employers to scale back or eliminate GLP-1 coverage. While some organizations continue to view the medications as an investment in employee health, others are restricting coverage as utilization contributes to rising plan costs.
➡ Why it matters: Employers are being forced to balance clinical value, employee demand, and the financial sustainability of providing broad GLP-1 coverage.
An Insurance Business article argues that benefits advisors need to take a more active role as employers confront health plan increases approaching 9%. Predictive claims data, price transparency, PBM negotiations, and vendor oversight are becoming increasingly important parts of the advisor toolkit.
➡ Why it matters: Employers increasingly need advisors who can help identify underlying cost drivers and evaluate structural solutions rather than relying on annual plan adjustments.
An opinion piece from leaders of ERIC and PCMA argues that pharmaceutical patent thickets can delay generic and biosimilar competition and contribute to higher employer prescription spending. The authors are calling for congressional action aimed at limiting certain secondary patent practices and accelerating competition.
➡ Why it matters: With prescription drugs accounting for a growing share of employer healthcare spend, the timing of generic and biosimilar competition can have significant implications for long-term plan costs.
Final Thoughts
This edition brings the affordability challenge into sharper focus: what a drug costs, what a plan pays, and what a patient ultimately pays are not always the same thing. Patent strategies, PBM contracts, specialty utilization, GLP-1 demand, and gaps in price transparency all influence the final equation.
For employers and advisors, managing pharmacy spend increasingly requires looking across the entire system, from market competition and contract terms to patient access, utilization, and fiduciary oversight.
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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