On The Radar – 34th Edition
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An analysis in Pharmaceutical Commerce examines how political shifts following the U.S. midterm elections could influence the future of drug pricing initiatives, including Most Favored Nation pricing. Meanwhile, international discussions continue to highlight the challenges of balancing affordability, pricing transparency, and pharmaceutical innovation across global markets.
➡ Why it matters: Political leadership may change, but the need for sustainable drug pricing reform remains. Employers and health plans will continue navigating uncertainty as policymakers debate how to improve affordability.
Speaking at Becker’s CEO + CFO Roundtable, Mark Cuban argued that meaningful healthcare reform requires either breaking up vertically integrated PBM and insurer organizations or empowering self-funded employers to scrutinize their contracts. He also highlighted the growing movement toward direct-to-consumer pharmaceutical models that bypass traditional PBM arrangements.
➡ Why it matters: Employers have an opportunity to take a more active role in managing pharmacy spend by demanding contract transparency, evaluating alternative pricing models, and challenging traditional intermediary structures.
The Department of Labor has issued a final rule requiring PBMs, brokers, and consultants to disclose compensation arrangements, including retained rebates, spread pricing margins, and pharmacy recoupments. Beginning with applicable self-insured plan years on or after July 1, 2027, employers will gain greater visibility into how pharmacy intermediaries are compensated.
➡ Why it matters: Increased transparency provides employers with more information to evaluate PBM contracts, but turning those disclosures into measurable cost reductions will require active oversight and negotiation.
An analysis from The Conference Board highlights how new federal PBM disclosure requirements will strengthen employers’ ability to evaluate direct and indirect compensation across pharmacy benefit arrangements. The rule reinforces fiduciary responsibilities under ERISA, requiring plan sponsors to assess contract reasonableness and identify potentially excessive fees.
➡Why it matters: Employers will need to move beyond simply collecting PBM disclosures and begin using that information to benchmark contracts, evaluate vendor performance, and strengthen fiduciary oversight.
A Pharmaceutical Executive analysis examines how Medicare price negotiations, PBM reform, inflation rebates, and direct-to-consumer pharmacy models are reshaping the U.S. drug pricing landscape. Rather than competing solely on list prices, pharmaceutical manufacturers are facing growing pressure to demonstrate clinical outcomes, transparent pricing, and measurable value.
➡Why it matters: Employers and health plans increasingly need to evaluate medications and pharmacy arrangements based on total net costs and clinical outcomes rather than headline discounts or list prices alone.
New Department of Labor requirements are changing how employers oversee pharmacy benefit arrangements by making previously hidden PBM compensation more accessible. Retained rebates, spread pricing, and other revenue streams will become part of the information plan fiduciaries can use to evaluate contract terms and administrative costs.
➡Why it matters: Greater access to financial data also increases expectations for employers to actively review PBM performance and demonstrate responsible oversight of plan assets.
A BenefitsPRO commentary argues that meaningful PBM reform begins when employers demand complete visibility into their pharmacy contracts. By examining manufacturer rebates, spread pricing, pharmacy recoupments, and other revenue streams, plan sponsors can better understand where pharmacy dollars are going.
➡ Why it matters: Transparency only creates value when employers use the information to identify unnecessary costs, challenge misaligned incentives, and improve overall pharmacy plan performance.
According to the 2027 Brown & Brown Employer Health and Benefits Strategy Survey, controlling healthcare costs remains employers’ leading strategic priority. Approximately 83% of surveyed employers are prioritizing claims and clinical audits, transparent PBM evaluations, and data analytics, while GLP-1 coverage continues to face tighter clinical and formulary requirements.
➡ Why it matters: Employers are increasingly moving toward data-driven cost management and stronger vendor oversight as they prepare for another year of significant healthcare spending pressure.
Fueled by the success of its GLP-1 portfolio, Eli Lilly is expanding investment in next-generation metabolic treatments, neurology, gene therapies, and immunology. At the same time, the manufacturer is discontinuing underperforming development programs and pursuing strategic acquisitions to strengthen its pipeline.
➡ Why it matters: Continued pharmaceutical innovation could introduce new treatment options while creating additional financial considerations for employers and health plans managing specialty drug spending.
Rising hospital prices, prescription drug costs, insurance premiums, and out-of-pocket expenses are creating growing financial pressure for Americans. As healthcare spending approaches one-fifth of the U.S. economy, individuals are increasingly facing difficult decisions about whether they can afford necessary medical care and medications.
➡ Why it matters: Healthcare affordability is not just an employer budget concern. Rising costs can affect medication adherence, access to treatment, and employees’ overall financial well-being.
An American Action Forum analysis reports that average family health insurance coverage reached $28,303 in 2026. The report attributes rising premiums to underlying medical spending, utilization, and prescription drug costs, arguing that many proposed reforms simply redistribute expenses rather than addressing the underlying cost of care.
➡ Why it matters: Employers need strategies that address the drivers of healthcare spending rather than relying exclusively on shifting costs between health plans, employees, and insurers.
U.S. healthcare expenditures reached $5.3 trillion in 2024, averaging approximately $15,474 per person. Hospital care accounted for $1.6 trillion, clinical services totaled $1.1 trillion, and retail prescription drug spending approached $500 billion. Healthcare spending is projected to reach 20% of GDP by 2032.
➡ Why it matters: Continued growth in healthcare expenditures reinforces the need for employers, policymakers, and healthcare organizations to address underlying pricing structures and long-term financial sustainability.
Final Thoughts
As employers prepare for 2027, healthcare affordability and pharmacy transparency are becoming increasingly interconnected. New PBM disclosure requirements, evolving drug pricing models, and continued pressure on healthcare budgets are creating both opportunities and responsibilities for plan sponsors.
The recurring theme is that transparency alone will not solve rising healthcare costs. Employers and advisors must turn greater financial visibility into actionable strategies that address underlying prices, strengthen fiduciary oversight, improve medication access, and deliver measurable financial impact.
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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