The Challenge: Costs That Keep Climbing
Much of this increase stems from the growing use of obesity medications, cancer treatments, chronic condition management, and mental health services.
Demand for GLP-1 drugs has surged, with nearly 80% of employers reporting higher utilization.
While these medications are highly effective, their expense has led many organizations to require prior authorization and participation in weight management programs to promote responsible use.
The Pressure Point: Pharmacy Spending
Prescription drug costs continue to increase at a faster rate than other healthcare categories, accounting for nearly one-quarter of total healthcare spending.
Employers anticipate an 11% to 12% rise in pharmacy spending heading into 2026.
In response, organizations are seeking greater transparency from pharmacy benefit managers and exploring models that emphasize value over rebates.
This evolution reflects a broader shift toward accountability and quality, ensuring that every dollar spent supports better care and measurable results.
The Strategy: Prevention and Smarter Care
Prevention now anchors cost management, with employers broadening cancer screening coverage, removing age limits for key tests, and incentivizing recommended preventive care. These efforts control costs while demonstrating a commitment to long-term health and meaningful employee engagement.
At the same time, many organizations are enhancing navigation tools to help employees locate high-quality providers. When employees can easily identify effective care options, both outcomes and spending improve.
The Opportunity: Engagement as a Cost Strategy
Employee engagement, encouraging preventive care, increasing primary care use, and effective benefits communication drive smarter healthcare decisions. Informed employees utilize resources effectively, thereby reducing unnecessary costs and enhancing overall well-being.
| This information is general in nature and provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors. |
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