Employers and health plans continue to grapple with rising specialty drug costs as utilization growth and an expanding pipeline reshape benefit strategy, according to Pharmaceutical Strategies Group’s 13th annual Specialty Drug Benefits Report, which surveyed benefits leaders across employers, health plans and union-sponsored plans nationwide.
Specialty drugs now account for more than half of total drug spending despite serving a relatively small patient population, underscoring their outsized impact on benefit budgets, according to the report.
When asked about top priorities, 43% of respondents cited managing specialty drug trend and costs as their primary focus, followed by 37% prioritizing total cost of care. Other objectives, including improving transparency, reducing inappropriate utilization, and enhancing adherence and patient experience, were selected far less frequently.
Coverage complexity emerged as the leading challenge, driven by the rapid pace of new specialty drug approvals and expanding indications.
As utilization grows, payers are also confronting increasingly complex formulary design decisions. For specialty drugs covered under the pharmacy benefit, half of plans rely on a single specialty tier, while roughly one-third use multiple specialty tiers, reflecting divergent approaches to managing high-cost therapies.
Many specialty drugs are also covered under the medical benefit or span both benefit channels, prompting greater emphasis on cross-benefit coordination. Two-thirds of payers report actively optimizing specialty formularies across pharmacy and medical benefits, while half of employers and nearly three-quarters of health plans have formal processes in place to manage across both benefit types. Nearly three-quarters of plans now maintain a medical drug formulary.
This complexity is expected to intensify. A majority of respondents, including 85% of health plans and 71% of employers, anticipate that cell and gene therapies will create significant financial challenges in the coming years. These therapies aim to treat or prevent disease by adding, replacing or turning off genes. While they represent significant medical advances, they also carry substantial price tags. As new CGTs enter the market and existing therapies gain expanded indications, payers are increasingly focused on both the financial exposure and administrative complexity associated with potential CGT claims.
Rebates remain a central lever in specialty drug management, but payers are increasingly weighing them against the ability to apply more restrictive utilization management controls. Two in five organizations said they are willing to accept fewer rebates in exchange for greater flexibility to implement these clinical and coverage controls, underscoring a gradual shift away from rebate maximization as the dominant decision-making driver.