Why Prescription Drug Spending Should Be Top of Mind for Benefits Consultants

As healthcare spending continues to rise, prescription drug spending is no longer just a line item – it’s a major driver of overall plan expenses.

For benefits consultants, this shift presents both a challenge and an opportunity: the challenge of navigating a complex yet opaque pharmaceutical landscape, and the opportunity to provide meaningful solutions that can help protect their clients’ bottom line.

Employer Healthcare Costs Are Rising

The data is clear – employer healthcare costs are rising. The average cost of employer-sponsored health coverage in the United States is expected to increase [by] 9% in 2025, surpassing $16,000 per employee.

Benefits consultants looking to help clients control healthcare costs should be sure to focus on prescription drug spending, which now accounts for over 25% of employer healthcare budgets.

Why Prescription Drug Prices Keep Going Up

There’s no single reason why prescription drug prices keep increasing, but rather, a mix of factors that continue to drive costs higher year after year.

Inflation

While inflation helps explain the rising cost of many goods and services, it doesn’t tell the whole story when it comes to prescription drugs. Since 1985, pharmaceutical prices have increased three times the rate of inflation, suggesting there are other indeed other factors driving costs up.

Lack of Transparency

Traditional pharmacy benefit managers (PBMs) often use complex pricing structures to obscure the actual cost of drugs, making it difficult for employers to track where their money is going. This lack of transparency not only drives up costs but also creates compliance and fiduciary risks for employers, who are responsible for ensuring their benefit dollars are spent effectively.

Unregulated Price Hikes

Unlike many other countries, the United States allows manufacturers to set and increase prices with a lot of freedom. And while there’s growing political discourse about the lack of regulations, there are currently no federal laws that directly limit how much or how often drugmakers can hike prices.

Rising Utilization and Chronic Conditions

As the workforce ages and more employees manage chronic health conditions like diabetes, hypertension, or mental health issues, utilization of prescription drugs increases. More prescriptions, taken for longer periods, naturally lead to higher costs.

4 Ways Benefits Consultants Can Help Employers Take Control of Pharmacy Drug Spending

While rising prescription drug costs can feel overwhelming, benefits consultants are in a strong position to guide employers toward smarter, more sustainable solutions.

1. Evaluate pharmacy benefit contracts carefully
   One of the most powerful steps employers can take is reviewing their PBM contracts through a more critical lens. Consultants can help clients look beyond just discounts and rebates to understand the true net cost of medications. Encourage clients to consider PBMs that offer transparent, pass-through pricing and full disclosure of fees, so they know exactly where every dollar is going.
2. Use data to identify cost drivers
   Consultants can help employers make better decisions by leveraging pharmacy claims data to spot trends and high-cost drivers. With the right reporting, it’s easier to identify which medications or conditions are driving pharmacy spend and develop targeted strategies to address them.
3. Educate employers on market trends and innovations
   Staying ahead of the curve matters. From upcoming legislative changes to disruptive PBM models, employers rely on benefits consultants to provide insights they might not have access to on their own. Being proactive – not reactive – helps employers feel more in control and builds long-term trust.
4. Align pharmacy strategy with overall benefits goals
   Prescription drug management should be at the top of any price containment strategy. Consultants can help employers view pharmacy strategy as part of a larger health benefits ecosystem, ensuring it aligns with all objectives.

The Bottom Line

With healthcare spending on the rise, benefits consultants who can offer transparent, cost-effective solutions will enhance their value proposition and build stronger, more trusting relationships with clients.