Managing pharmacy benefits can often feel like trying to hit a moving target. Just when costs seem manageable, a few high-cost claims can put immense pressure on your entire plan.
For self-funded employers and benefits leaders, specialty medications are usually at the center of this challenge. Specialty drugs are high-cost, complex medications used to treat chronic, rare, or serious conditions. They often require special handling, monitoring, or administration beyond a typical prescription.
While they offer life-changing clinical value, the financial impact is staggering. For most plans, approximately 2% of prescription claims may account for 50% or more of total pharmacy benefits plan spend. And, the price for new drugs coming to market has more than doubled between 2021 to 2024. In fact, the median annual list price is now more than $370,000, according to a recent Reuters survey.
If your pharmacy spend is skyrocketing, you need to identify the root causes. Here are three warning signs that your plan may be overpaying for specialty drugs:
1. A small number of claims drive massive spend.
You cannot afford to take a hands-off approach when a tiny fraction of your member population drives half of your total pharmacy cost.
While high-priced therapies may be merited for specific members, costs often creep up due to external market influences rather than clinical necessity. Your members and their providers face constant exposure to direct-to-consumer (DTC) advertising on TV, radio, and social media. Physician recommendations, combined with easily accessible prescription coupons, online pharmacies, and heavily marketed prescription savings programs, can steer patients toward the most expensive therapies.
It’s critical to implement a strategy that prioritizes clinical utilization management. If your plan simply pays each high-dollar claim without verifying appropriate dosing, monitoring adherence, and reviewing clinical effectiveness, you need to take a closer look.
2. Brand biologics are favored over lower-cost biosimilars.
Biologics have revolutionized care for cancer and autoimmune disorders, but they come with heavy price tags. Biosimilars are highly similar versions of biologic medicines. They offer the same safety and clinical effectiveness as their reference products, but typically cost 35% to 50% less.
Despite these savings, many plans still favor expensive brands due to outdated formulary designs or aggressive rebate structures. Brand biologics often retain preferred formulary status because of lucrative rebate contracts and long-standing market relationships. Consequently, biosimilars frequently receive unfavorable tier placement, higher member cost-sharing, or additional access restrictions. Wouldn’t it be more beneficial to pay $1,000 for a biosimilar with no rebate than $5,000 for a biosimilar with a $2,500 rebate?
If your formulary continues to prefer high-cost brand biologics when clinically equivalent options exist at a lower cost, you are leaving significant savings on the table.
3. Unchecked GLP-1 utilization is accelerating.
GLP-1 medications like Ozempic and Mounjaro have fundamentally changed how we manage obesity and type 2 diabetes. However, their clinical success has triggered an unprecedented surge in demand and plan costs.
Recent polling reveals that about one in eight U.S. adults, or a total of 12%, are currently taking a GLP-1 for either weight loss or to treat a chronic condition. From 2023 to 2024 alone, sales for Ozempic increased by 19%, while Mounjaro sales skyrocketed by 72%.
This rapid acceleration of GLP-1 use is fueled by DTC marketing, celebrity promotion, viral social media trends, and off-label use. Additionally, expanding clinical indications and the rise of online telehealth platforms have created easy access channels that bypass traditional clinical oversight.
If your plan covers these medications without strong utilization management to confirm clinical necessity and appropriate diagnoses, your specialty spend may become unsustainable.
How to take control of your specialty drug spend
To protect your plan, you need to implement proactive, practical cost-containment strategies. Consider upgrading your benefits design with the following approaches:
- Formulary performance: Prioritize low-cost, effective medications, including biosimilars.
- High-touch utilization management: Implement strict prior authorization with a robust review process and ongoing reevaluation based on clinical milestones.
- Clinical oversight: Actively prevent waste by verifying appropriate dosing, monitoring medication adherence, and reviewing ongoing clinical effectiveness.
- Member support: Integrate lifestyle and behavioral management, education, and ongoing support for members using treatments like GLP-1s.
- Alternative funding solutions: Utilize manufacturer copay assistance to cover member cost-shares, leverage patient assistance programs through non-profit foundations, and explore international drug sourcing to obtain safe prescriptions at lower prices.
The specialty drug pipeline will continue to grow, bringing new breakthrough therapies and higher price tags. By embracing evidence-based plan management, robust clinical oversight, and integrated health solutions, you can successfully safeguard your plan’s financial sustainability while preserving high-quality care for the members who need it most.
Learn more:
Biosimilars in Pharmacy Benefits: Why Formularies Must Evolve, May 20, 2026
An Industry in Flux: How to Navigate the Complex Pharmacy Benefits Landscape with Confidence, May 19, 2026
The Employer’s GLP-1 Dilemma: Balancing Quality Care and Cost Control, April 22, 2026
