Rising pharmacy costs are squeezing budgets – here’s how smarter pharmacy benefits strategies can save money and protect employees
Key Takeaways
- Prescription drug prices continue to rise, driving up health plan costs for self-funded and level-funded employers.
- Traditional PBMs often add hidden fees and markups, making it harder for employers to manage pharmacy spend.
- Brokers play a critical role in helping clients choose transparent, cost-effective pharmacy benefit solutions.
- Rx Optimization programs offer smarter strategies to cut costs, improve medication access, and enhance employee satisfaction.
- Switching to a transparent PBM helps employers take back control, eliminate unnecessary spending, and protect employees from high out-of-pocket costs.
Prescription Drug Costs Are Soaring — Is Your Pharmacy Benefit Strategy Ready?
Prescription drug spending expected to surpass $400 billion in 2025, putting pressure on employers and brokers
March 11, 2025 – Prescription drug prices in the United States are projected to exceed $400 billion this year,¹ driven by specialty medications, inflation, and ongoing supply chain disruptions. As costs continue to rise, employers and brokers are facing mounting pressure to find affordable solutions for managing pharmacy benefits.
For businesses offering self-funded and level-funded health plans, higher drug prices often translate to increased premiums and out-of-pocket expenses for employees.
This financial strain is pushing many companies to reconsider their pharmacy benefit strategies, seeking cost-saving alternatives without sacrificing employee access to essential medications.
Brokers are also navigating a challenging landscape, as clients demand more transparency and better cost management from their pharmacy benefits managers (PBMs). Industry experts suggest that Rx Optimization programs—which focus on eliminating hidden fees, securing better pricing, and improving patient outcomes—could be the key to controlling pharmacy spend in 2025.
As drug pricing trends continue to evolve, employers and brokers will need to stay informed and proactive in selecting cost-effective, member-focused pharmacy benefit solutions.
What’s driving the rising cost of prescription drugs? Key factors employers and brokers need to know
As U.S. prescription drug spending is set to surpass $400 billion this year, several factors are fueling the surge in costs. From the rising demand for specialty medications to inflation-driven price hikes, employers and brokers are facing a complex landscape when it comes to managing pharmacy benefits.
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Specialty medications like GLP-1s are driving up pharmacy spend
Specialty medications – especially biologics and GLP-1 drugs for weight loss and diabetes – are among the fastest-growing cost drivers. These treatments often come with price tags exceeding thousands of dollars per month, putting additional pressure on employer-sponsored health plans. With obesity and diabetes rates continuing to rise, demand for GLP-1 medications is expected to remain high throughout 2025.
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Inflation and supply chain issues are fueling drug price hikes
Many pharmaceutical manufacturers are raising prices due to inflation and ongoing supply chain disruptions. According to industry reports, hundreds of brand-name drugs saw price hikes of 5-10% at the start of 2025, with more increases expected throughout the year.
Employers relying on traditional PBM models may struggle to offset these rising costs without shifting the burden to employees.
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Traditional PBMs and hidden fees make prescription drugs even more expensive
Many traditional PBMs operate with hidden fees, spread pricing, and rebate-driven models that can inflate the cost of prescription drugs.
Employers are increasingly looking for transparent pharmacy benefit solutions to eliminate unnecessary markups and pass savings directly to employees.
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New regulations like Medicare price negotiations may not help employers immediately
New federal regulations,² including Medicare’s expanded drug price negotiation program, could introduce cost-saving measures for certain medications.
However, these changes may not immediately benefit employer-sponsored plans, leaving businesses and brokers in need of proactive cost-management strategies.
With these cost pressures mounting, experts suggest that employers and brokers should explore Rx Optimization programs and transparent PBM solutions to maintain affordability while ensuring employees have access to necessary medications.
Related Read: How Intercept Rx Helps Employers Save on Prescription Drugs
How rising prescription drug costs impact employers, employees, and pharmacy benefits brokers
As prescription drug prices continue to rise, the financial burden is being felt across the board. Employers are struggling with higher healthcare costs, employees are facing increased out-of-pocket expenses, and brokers are under pressure to find cost-saving solutions for their clients.
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Self-funded employers face higher premiums and increased health plan costs
For self-funded and level-funded employers, rising drug prices directly impact health plan expenses. Many businesses are seeing double-digit increases in their pharmacy spend, forcing them to either raise premiums, cut benefits, or absorb the financial hit. This challenge is particularly tough for smaller businesses, which may lack the negotiating power of larger corporations.
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Employees struggle with higher out-of-pocket costs and limited access to medications
With drug prices climbing, employees are often left paying more at the pharmacy counter. Many face higher deductibles, co-pays, or even delays in accessing critical medications because of cost concerns.
When prescriptions become too expensive, adherence drops, leading to worsening health conditions and higher long-term medical costs.
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Brokers must provide more cost-effective solutions
Brokers play a crucial role in helping employers navigate these rising costs. However, many traditional PBM models still operate with hidden fees and middlemen markups, making it difficult for brokers to secure truly cost-effective, transparent solutions.
As a result, brokers who proactively introduce cost-saving strategies—like Rx Optimization and transparent PBMs—will stand out as trusted advisors in 2025. These solutions help reduce unnecessary spending, improve employee access to medication, and give employers better control over their pharmacy benefit costs.
What’s Next?
With drug costs showing no signs of slowing down, employers and brokers need to rethink their approach to pharmacy benefits management.
What is Rx Optimization? Why it’s the key to controlling prescription drug costs
As prescription drug prices continue to climb, Rx Optimization is emerging as a game-changing strategy for employers and brokers looking to control costs without sacrificing employee access to essential medications.
Unlike traditional pharmacy benefit management, Rx Optimization focuses on transparency, member advocacy and prioritizing savings.
What is Rx Optimization Program?
Rx Optimization is a data-driven approach to managing prescription benefits that ensures:
- Lower drug costs for employers and employees
- Improved access to high-cost medications like GLP-1s
- Member benefits such as free home delivery, member advocacy and $0 copays
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Why brokers should prioritize transparent PBM models
For brokers, introducing a transparent pharmacy solution can help build stronger relationships with clients and position them as trusted advisors in a competitive market.
Employers are actively seeking alternatives to opaque, rebate-driven PBM models, and brokers who advocate for transparent solutions can differentiate themselves while securing better pharmacy benefits for their clients.
As prescription drug costs continue to climb, businesses must explore cost-effective, member-focused solutions that put savings back in their hands—not in the pockets of middlemen.
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Related Readings
- Intercept Rx vs. Competitors: How We Deliver Superior Savings
- Understanding Rx Optimization Programs: Comprehensive FAQs on Improving Patient Care and Reducing Costs
- Understanding Rx Optimization Programs: A Complete Guide for Managers and Brokers
4 essential steps for employers and brokers to manage prescription drug costs smarter
With prescription drug prices projected to exceed $400 billion in 2025, employers and brokers must take proactive steps to control costs while ensuring employees have access to the medications they need. Rx Optimization and transparent PBM models are becoming the preferred solution, but implementation is key.
Here are the critical steps brokers and employers should take in 2025 to future-proof their pharmacy benefits strategy.
Step 1: Evaluate your current PBM and pharmacy benefits contract
Traditional PBMs often inflate costs through hidden fees, spread pricing, and rebate-driven models. Employers should evaluate their current PBM and ask:
- Are we getting real savings, or are hidden fees inflating costs?
- Do employees struggle with high out-of-pocket expenses?
- Is our PBM fully transparent about pricing?
Many businesses are now opting for transparent, pass-through PBMs that ensure savings go directly to employers and employees instead of middlemen.
Step 2: Demand full pricing transparency from your pharmacy benefits manager
Brokers should ask the right questions before recommending a PBM in 2025. Key questions include:
- How does the PBM make money? (Is it through rebates or true cost savings?)
- Are there any hidden administrative fees or spread pricing?
- Does the PBM provide $0 copay options and home delivery for employees?
Employers should demand full disclosure and work with PBMs that prioritize affordability and access.
Step 3: Educate employees about lower-cost prescription options and Rx Benefits
Even the best pharmacy benefits program won’t work if employees don’t understand how to use it. Employers should:
- Communicate $0 copay options and home delivery benefits.
- Encourage the use of lower-cost alternatives for expensive medications.
- Provide education on Rx Optimization strategies so employees can make informed choices.
Step 4: Partner with a transparent PBM that prioritizes Rx Optimization and employee savings
Employers and brokers looking to stay ahead in 2025 should seek PBM solutions that eliminate middlemen markups, offer real cost savings, and enhance employee access to medications.
Prescription drug pricing is expected to keep rising, but businesses and brokers who act now can control costs while improving employee healthcare access.
The key is choosing transparent, member-focused pharmacy benefits solutions that eliminate hidden markups and prioritize Rx Optimization.
