5 Ways HR Leaders Can Push Back on Prescription Drug Costs

If prescription drug costs have your HR and benefits team feeling stressed and stumped for solutions, you’re certainly not alone. For many self-insured employers, pharmacy claims are climbing at double-digit rates annually, sometimes at twice or more the pace of medical claims.

Business Group on Health ’s 2025 Large Employer Health Care Strategy Survey found that 93% of employers are either concerned or very concerned about their pharmacy trend overall. For employers at the median of those surveyed, pharmacy costs grew from 21% of total healthcare dollars spent in 2021 to 27% in 2023.

We spoke with Jordan Counts , Quantum Health ’s director of Pharmacy Services, for his perspective on steps HR and benefits leaders can take to push back against the expense surge.

Q: What’s driving prescription drug costs and complexities?

A: Counts began by noting that, if benefits pros already find difficulty managing the complexities of rising drug costs, “there’s more to come.” He cited four key factors that will make pharmacy claims even more challenging — and critical — to address going forward:

• Increasing drug pipeline pressure. According to a February 2024 report from Reuters , the median annual price of 47 new drugs launched in 2023 reached $300,000, up 35% from 2022’s $220,000 price tag.
• Looming transparency lawsuits. In 2024, class-action lawsuits over drug price transparency were filed against two Fortune 50 employers. Those suits allege the employers failed their fiduciary duty in managing employees’ drug benefits, causing plan members to overpay for certain drugs. Beyond rising claims costs, lawsuits like these pose a new type of drug-related financial risk for self-insured employers.
• Growing concern over rebates and PBMs. A Bureau of Economics analysis finds that employees and their families might be getting shorted in how rebates paid by drug manufacturers flow through pharmacy benefit managers (PBMs) to employers and plan members. The study compared claims data with estimates of rebates paid over a 13-year period (2007 to 2020). While retail drug prices rose 9.1% on average annually, and negotiated prices rose only 4.3%, consumers’ out-of-pocket spending grew 5.8%. From industry trade groups to Congress and state legislatures, there’s increasing media and regulatory focus on the role PBMs play in drug costs and rebate sharing.
• Lack of progress on valued-based care. Counts noted that if HR leaders feel high drug costs are falling squarely on them and their organizations, it’s in part because so little progress has been made to inject value-based principles into drug treatments. That often leaves employers facing the unenviable decision of whether to spend hundreds of thousands of dollars for a member’s specialty drug or gene-and-cell therapy, with little clarity about who, beyond the employer, shares the risk of the treatment’s efficacy.

Q: How can you build your utilization management (UM) acumen?

A: Counts said HR and benefits leaders shouldn’t expect themselves to become experts on solving drug pricing and supply chain complexities. That said, they can commit to becoming students of drug-cost dynamics and cost-control strategies.

He offered five suggestions for HR leaders wanting to be more proactive on pharmacy cost management.

1. Get familiar with unit cost versus utilization factors

Rising prescription drug costs don’t happen by accident. They are the direct result of a drug’s price (unit cost) and how much it’s prescribed (utilization). It shouldn’t be presumed that HR and benefits leaders can influence both across all spend, but Counts said any cost-control effort should start with understanding which factor contributes most to cost trend. Doing so will help you focus on where to make the greatest impact.

Take GLP-1 agonists as an example. Historically, these drugs were prescribed as an effective treatment for diabetes. In recent years, their incremental use as a weight-loss treatment has exploded. Ongoing clinical trials have the potential to add even more FDA-approved indications for their use.

Counts noted that, while brand-name GLP-1s such as Wegovy and Ozempic are expensive, claims data shows the spike in utilization primarily drives the soaring costs. Given that insight, benefits leaders can focus on addressing GLP-1s by developing a UM strategy that balances member health, clinically appropriate use and cost control.

2. Build UM strategies by connecting components

Counts said benefits leaders should start getting used to building drug category-specific UM strategies in partnership with consultants and vendor partners. Identify your highest-cost drug categories, then assemble a laddered set of UM “components” for each that promotes clinically appropriate authorization and utilization over time.

For example, with GLP-1s, an organization first must decide how important supporting weight loss is to population health goals. If obesity is a major concern, and GLP-1s are seen as a solution in some scenarios, a strategy might start with weight-management coaching, to see whether lifestyle modifications and nutrition education can have the desired impact.

Laddering up the strategy, standards for GLP-1 approval might include age and body-mass index limits. A strategy might also include a “de-prescription” threshold — a point at which a less expensive appetite suppressant is attempted if members haven’t lost a certain percentage of their body mass after four to six months on a GLP-1.

“You can think of these UM components as creating a step-therapy approach,” Counts said. “Granted, there are too many drugs within most plan populations to develop and implement a strategy specific to each. But an 80:20 analysis will point to where a drug-specific UM strategy can deliver the biggest bang for your buck.”

3. Think layers when developing plan language

Capturing evidence-based standards for drug treatments in your summary plan description is one step to establish guardrails that promote clinically appropriate utilization as providers submit authorization requests. But the insurance carrier and their provider network will bring their own set of “clinical policy bulletins” that may have different standards and coverage limitations. Condition-management and pharmacy point solutions might also have their own rules and guidelines.

How does an employer ensure these layers of potentially confusing and conflicting standards are rationalized and actionable? Counts said, “It’s important to take the time to understand the details of the process your vendors execute against your plan design. This will provide a sense for the critical balance between the intended outcome of utilization management and the experience of your members and providers that care for them.” In our GLP-1 example, a leader may inquire whether the vendor requires a combination of clinical documentation and laboratory values or a simple attestation to validate appropriate use. Often, it’s in the execution of even the most well-intended plan design where we see opportunities for improvement.

4. Probe partners for clear answers and effective solutions

If there’s one area Counts advises HR leaders to get more proactive, it’s in asking probing questions of current and prospective benefits partners. “Because drug costs can be so complex, I sense some clients are reluctant to ask questions, perhaps out of concern that they’ll reveal a lack of knowledge,” he said. “If anything, you should feel justified asking lots of who, what, when, why and how questions.”

Often, it’s in the execution of even the most well-intended plan design where we see opportunities for improvement. For example, Counts advises benefits leaders to ask their PBM for market-rate pricing data, net of rebates, on the most expensive drugs affecting the budget. Then, compare the market rate with your net cost. “If there’s a delta, you should get a clear answer about what accounts for the difference,” Counts said. “That sort of fact-finding is simply an employer exercising the fiduciary duty that’s at issue in lawsuits filed this year.”

Prefer to hire a pharmacy consultant to lead these conversations? Even then, Counts said, it pays to ask questions to ensure their only incentive is helping you find answers and solutions when it comes to analyzing and controlling drug spend.

5. Recognize engagement as a solution and a goal

It can be easy to take a “build it and they will come” approach to employee benefits, that is, to assume plan members will make full use of the robust ecosystem their HR and benefits team has assembled for them. But with health benefits, an enhanced approach to member engagement is central to achieving the higher levels of benefits engagement employers so often want.

Counts said he encourages HR leaders to make member communication and engagement a key purchase consideration when choosing, for instance, a drug price transparency vendor. “Ask how their model fits into a members’ life flow as they access healthcare,” he suggested. If a vendor’s solution takes an effective member-engagement approach, that’s a plus. Then, if you have Quantum Health ’s navigation and care coordination working as a “force multiplier” to guide members to the right support across all your benefits, including pharmacy-related benefits, employers are more likely to see maximized use and results from any cost-management point solutions.

“Benefits leaders face a conundrum when it comes to drug costs,” Counts said. “They need to balance the health plan’s financial viability while improving members’ health outcomes and benefits experience. Those are hard considerations to balance. But by leaning on trusted partners for honest answers and effective collaboration, it’s possible to make headway. Not only is it possible — it’s becoming imperative.”