On The Radar – 32nd Edition
By
An essay on KevinMD examines how opaque PBM pricing structures leave physicians and patients without clear visibility into medication costs at the point of care. Hidden margins, rebate arrangements, and market concentration can influence prescribing decisions and increase overall pharmacy spending.
➡ Why it matters: Greater pricing transparency at the point of care could help patients and providers make more informed treatment decisions while giving employers better visibility into pharmacy costs.
Despite increasing PBM rebate guarantees, employer pharmacy spending is projected to rise 12% in 2026, driven by GLP-1s, oncology treatments, and specialty medications. Employers are increasingly questioning whether rebate-focused contracts deliver meaningful cost reductions.
➡ Why it matters: Employers need to evaluate total net pharmacy spend rather than relying on rebate guarantees and headline discounts to measure PBM performance.
The largest PBMs are facing growing competition as employers prepare for new federal transparency requirements. Reported market share for the Big Three declined from 63.4% in 2025 to 54.3% in 2026, while employers increasingly explore transparent pricing models and direct-to-employer pharmacy arrangements.
➡ Why it matters: Employers are becoming more proactive in evaluating PBM contracts and alternative pharmacy models rather than waiting for regulatory requirements to take effect.
Switching PBMs isn’t always a practical or immediate solution for employers facing rising pharmacy expenses. New analysis highlights strategies such as site-of-care optimization, biosimilar-first formularies, GLP-1 clinical management, and independent contract audits to improve cost control within existing arrangements.
➡Why it matters: Employers may have opportunities to reduce pharmacy spend through targeted clinical and contract management without completely replacing their PBM.
More than 4 million Americans could face disruptions to affordable prescription access as new customs requirements for personally imported medications take effect October 22. The changes could make obtaining prescriptions from licensed international pharmacies significantly more difficult for patients who rely on lower international prices.
➡Why it matters: Restrictions on personal prescription importation could create new affordability and access challenges for patients already struggling with high U.S. medication costs.
Cost-plus pricing models are gaining traction as transparent alternatives to traditional PBM arrangements, particularly for generic medications. However, experts caution that fixed markups and dispensing fees do not automatically deliver lower overall spending across brand-name and specialty drugs.
➡Why it matters: Transparent pricing is an important step, but employers still need to evaluate clinical utilization, drug mix, and total net costs to determine whether alternative models deliver meaningful financial impact.
A STAT News commentary argues that high hospital and pharmaceutical prices, rather than utilization alone, are driving unsustainable healthcare costs for employers. With total U.S. healthcare spending expected to approach $6 trillion in 2026, some employers are increasingly supporting policy interventions aimed at limiting excessive provider and drug pricing.
➡ Why it matters: Traditional insurance and benefit design changes may offer limited relief when underlying healthcare prices remain high, increasing pressure for broader structural reforms.
A study of 643 newly approved medications found that median U.S. drug launch prices increased from approximately $39,000 in 2008 to more than $254,000 in 2025. Cell and gene therapies are contributing to the trend, with launch prices significantly higher than traditional small-molecule medications.
➡ Why it matters: Rising launch prices create growing financial exposure for employers and health plans as increasingly expensive therapies enter the market.
Pharmaceutical industry groups are challenging federal most-favored-nation drug pricing policies, arguing that international price benchmarks could discourage innovation in rare disease treatments. Although certain orphan drugs are exempt from the GLOBE pricing model, manufacturers remain concerned about how expanded indications could affect eligibility.
➡ Why it matters: Federal drug pricing reforms continue to raise questions about balancing affordability, pharmaceutical innovation, and access to treatments for rare conditions.
PBMs are urging regulators to preserve flexibility in prescription drug prior authorization requirements, arguing that complex therapies require individualized clinical review. Patient advocates counter that inconsistent approval processes can delay treatment, while electronic prior authorization is emerging as a potential solution to reduce administrative burdens.
➡ Why it matters: Employers and health plans must balance utilization management with timely medication access as regulators consider changes to prior authorization requirements.
Final Thoughts
Pharmacy costs remain under pressure as employers confront rising drug launch prices, growing specialty utilization, and continued uncertainty surrounding PBM reform. Greater transparency is creating opportunities for accountability, but rebate guarantees, cost-plus pricing, and regulatory changes alone do not ensure lower overall spending.
For employers, the focus is increasingly shifting toward total net pharmacy costs, clinically appropriate utilization, transparent vendor relationships, and sustainable medication 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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