A Prescription for Rising Drug Costs

Buoyed by new drugs like glucagon-like peptide-1(GLP-1), prescription medications remain the fastest-growing component of health insurance costs, and the impact on workers continues to grow.

Nearly 7 in 10 Americans describe the cost of their prescription medications as a burden, according to a June survey of 1,278 U.S. adults by the research arm of healthcare company GoodRx. Along with forcing organizations to make difficult decisions about healthcare coverage, these rising costs are causing employees to take actions that may endanger their health.

“More people are skipping doses, cutting back on essentials or turning to creative — and sometimes risky — workarounds,” wrote Tori Marsh, GoodRx’s senior director of research, in an introduction to the survey findings.

The Impact

Cost increases for outpatient prescription drugs outpaced all other health benefit plan categories in 2025, rising 11.4% and eclipsing both overall inflation and the 7.9% jump in per-person costs for many health insurance plans, according to the 2025 Health Plan Cost Trend Survey from consulting firm Segal.

Much of the increase can be attributed to high-cost specialty drugs replacing lower-cost treatments, with GLP-1 medications a primary driver. “That’s been the ongoing story,” said Eileen Pincay, a senior vice president and national pharmacy practice leader at Segal. “It’s driving discussions around whether [employers] … should even continue to cover them because they are so expensive.”

Rising drug costs often lead to higher out-of-pocket expenses for employees, which in turn impact other areas of their lives. Nearly half (46%) of GoodRx’s survey respondents reported making sacrifices in other areas to pay for prescriptions, up from 37% in 2024. Respondents cited cutting back on food and clothing purchases, curtailing leisure activities, and racking up credit card debt. Equally troubling, 1 in 5 reported rationing their medications. That’s up 5% from the previous year.

Steps Toward Controlling Costs

Total rewards professionals can help address this situation by taking several strategic steps.

Review coverage options. Julie Stich, the vice president of content at the International Foundation of Employee Benefit Plans (IFEBP), advised a focus on plan design, including:

• Cost-sharing requirements;
• Incentives for using generic drugs or mail-order services for maintenance prescriptions; and,
• Effective step therapies beginning with lower-cost treatments.

“There needs to be a balance between what employees need to ensure the most effective care possible while controlling spend,” she said.

Utilization management programs also represent “low-hanging fruit” for organizations that have not adopted them, said Segal’s Pincay.

Take a nuanced approach to GLP-1s. Instead of curtailing drug coverage, consider increasing copayments or implementing stricter eligibility criteria, such as a higher body mass index (BMI) threshold, Pincay said. That can ensure coverage continues to benefit those who most need the drugs, she said, adding that third-party vendors can help adjudicate these decisions. Obesity “is not considered a lifestyle anymore — it’s considered a disease,” she said. “That’s why we have to be thoughtful.”

Reassess pharmacy benefit managers (PBMs). The opaque nature of PBMs, which historically have used negotiated discounts and rebates with manufacturers as part of their compensation model, has led to alternatives. Larger PBMs now offer stricter formularies that, even absent rebates, can result in lower overall costs, Pincay said. And, “transparent” PBMs, versus traditional PBMs, charge a flat administrative fee, passing along all rebates and discounts to organizations and their employees.

Employers can negotiate directly with PBMs to secure better pricing and discounts, and Stich reported anecdotal evidence of growing numbers of RFPs. “There’s been a call for a long time for greater transparency for PBMs,” she said. “It’s definitely a time to relook at those relationships.”

Sharpen the saw on education. Along with promoting the effectiveness of generics and other alternatives, employee education programs should focus on the importance of prescription adherence, Stich advised. Other topics include making employees aware of discount cards and manufacturers’ patient assistance programs, as well as encouraging pharmacy price comparison and asking healthcare providers whether lower-cost medication options may deliver the same effectiveness.

Benefits professionals don’t have to do this alone — some PBMs provide concierge services that walk employees through the cost-saving options available, including integrating consumer discount programs, she added.

Improved education appears to be working: According to GoodRx, nearly half (43%) of Americans took advantage of discount programs in 2025, and one-quarter (25%) reported asking their healthcare provider for less expensive medications.

Support healthcare provider education. Biosimilars — which essentially serve as generics for high-cost specialty drugs — remain less familiar to medical professionals in the U.S. than in Europe, according to Pincay, who credits the growing adoption of Humira biosimilars to robust physician education. Employers may support biosimilars as an issue within an employer/member healthcare group that’s focused on cost and coverage solutions.

Regularly review drug usage and cost data. “By getting access to the data and analyzing what it means, you can determine if the plan is being used, and used effectively, and that costs are managed in a way that’s appropriate for the usage you’re seeing,” Stich said.

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