The healthcare landscape is quickly changing, and one of the most remarkable step forward in recent years has been the rise of high-cost specialty drugs and new medical therapies. Whether we talk about advanced cancer therapies, or GLP-1 medications (like Ozempic) for diabetes and weight management, these treatments offer promising results for patients, but also create new challenges for employer-sponsored health plans.
Understanding how these developments affect both employees and benefits budgets is an important step toward maintaining affordable, sustainable coverage.
The Growing Impact of Specialty Drug Costs
According to studies, specialty medications represents now more than half of total prescription drug spending in the United States, even though only a small percentage of patients use them. These drugs are often complex to manufacture and require special handling, which contributes to their high cost.
These treatments are expensive. Some specialty treatments may cost tens or even hundreds of thousands of dollars per year, and emerging gene or cell therapies can exceed a million dollars per treatment.
For large group employers in California (those with 100 or more eligible fulltime employees), these expenses can appear suddenly in claims data (assuming it is a covered drug on the formulary list) and can have a significant impact on renewal rates or future plan designs. In fact, specialty drugs costs are one of the reasons why experts are expecting high premium rates in 2026.
Because these costs are both high and unpredictable, many organizations are re-examining how their health plans manage pharmacy benefits.
Why GLP-1s Sparked a Broader Conversation
The introduction of GLP-1 drugs (such as Ozempic, Wegovy, and Mounjaro) has reshaped how employers think about prescription drug coverage. Initially designed to help manage diabetes, these medications have also shown strong results in weight management and overall metabolic health.
Their popularity has grown quickly, but so have concerns about affordability and long-term use. Some insurance carriers are facing difficult questions:
- Should GLP-1s be covered for purely weight loss purposes?
- How do we ensure equitable access without driving up overall plan costs?
- What are the long-term outcomes compared to the long-term expense?
There are no one-size-fits-all answers, but the conversation itself has prompted a broader reflection on how insurance carriers and employers can support health innovation while maintaining fiscal responsibility.
Approaches Employers Are Exploring
The good news is that employers can adopt different approaches and follow strategies to help balance cost, care and fairness within their benefit packages. For example, common strategies include:
- Utilization management tools such as prior authorization or step therapy, which help ensure that medications are prescribed when clinically appropriate and that lower-cost alternatives are considered first.
- Data analysis and forecasting, using claims data to identify emerging trends, high-cost categories, or potential future risks.
- Specialty pharmacy programs, can help monitor medication use, improve adherence, and manage costs through negotiated pricing and expert oversight.
- Employee education and communication, helping employees understand both the benefits and limitations of these medications, as well as the importance of following treatment plans safely. And, of course, whether GLP-1 drugs are covered by their employer-sponsored health plans.
Each approach aims to create more transparency and consistency in how decisions are made.
Looking Ahead
The rise of specialty drugs and breakthrough therapies isn’t slowing down. As science continues to advance, employers will likely see even more innovation, and with it, continued cost and coverage challenges.
The most effective response is an informed one. Staying aware of industry trends, understanding how these therapies work, and maintaining open communication with both employees and benefits partners can help organizations plan thoughtfully rather than reactively.
Ultimately, navigating this new landscape isn’t just a financial exercise, it’s an opportunity to rethink how health benefits can support both well-being and sustainability in the years ahead.
Since 2013 SSA Insurance Services has been helping organizations of all sizes to promote and protect the health and wellness of their most important asset: their employees. Stephanie San Antonio and her team do this by working with employers to design, implement, and maintain a company culture that is in line with their mission and values, and building a comprehensive benefit package that attracts and retains their top talent. Call SSA at (760) 203-4299 for a complimentary benefits package review, to make sure your group health plan is in compliance, and for help with establishing a wellness program for your employees to keep them healthy, happy and engaged.
