Pharmacy costs continue to rise year after year. This trend is driven by increasing production and distribution costs from manufacturers, higher utilization of specialty drugs for managing chronic conditions and more patients regularly using the health system compared to a few years ago.¹ Unfortunately, no matter the cause, rising drug prices have real consequences: 1 in 3 Americans surveyed said they have difficulty affording their prescription medications.¹

And while new specialty drugs and therapies have the potential to improve health outcomes, many of them are unsustainably expensive. According to one report, specialty medications make up less than 2% of overall pharmacy volume, yet account for more than 60% of total pharmacy spending.² 

Consequently, when employers and plan sponsors are designing their benefit strategies, many are exploring ways to make up for these costs; for example, they may evaluate pharmacy benefit manager (PBM) pricing models, look for utilization management programs, and inquire about digital health member tools. While others may opt to raise employee health care contributions or deductibles, or even end coverage entirely for certain drugs.

Employers and plan sponsors looking to take a more strategic approach to cost management may want to consider integrating pharmacy and medical benefits and working with an insurance carrier that advocates and collaborates for lower pharmacy costs on behalf of employers and members.

Integrating pharmacy and medical benefits

Less-than-optimal treatment decisions are more likely when a patient does not have integrated pharmacy and medical benefits. As an example, consider medications used to treat neuromyelitis optica spectrum disorder (NMOSD), a rare condition which can be treated with different medications. The cost of the drug could vary significantly:

• $26K per month for a self-administered injection covered under one’s pharmacy benefit
• $2.6K per month for infusions administered in an office by a health care provider covered under one’s medical benefit

Someone with separate pharmacy and medical benefit carriers may end up receiving the $26,000 injection because their carrier and pharmacy benefit manager are not synced on how to manage treatments that have options under both benefits. Whereas, if employers and plan sponsors integrate their pharmacy and medical benefits under one insurance carrier, they are more likely to end up with a better cost outcome than if they didn’t. If they do not manage holistically across their benefits, they may risk higher costs.

Questions to ask a prospective insurance carrier:

• What are the primary ways you seek to help members achieve improved health outcomes?
• Tell me about your clinical review process. For example, do you have a pharmacy and therapeutics committee?
• Does the committee evaluate specialty drugs that come to market for safety, effectiveness and value, both pharmacy and medical benefit drugs?
• How do you evaluate whether a less expensive drug is available for treating the same condition with similar outcomes and weigh other cost benefits?

Working with a carrier that advocates and collaborates on behalf of the employers and members it serves

The potential to reduce costs and expand access through collaboration across the health system is growing alongside the complexity and variety of treatments. One strategy is to work with a carrier that collaborates on behalf of the employers, plan sponsors and members it serves by negotiating prices with drug manufacturers, advocates for certain government policies or protections, advises employers and plan sponsors on which drugs or treatments to cover and equips providers and members with the information they need to help make more informed decisions.

The cost of care — specifically in the pharmacy space — is unsustainable. Employers and plan sponsors may be better served by carriers who are in constant conversation with drug manufacturers and the government to help ensure they are doing everything in their power to help make the cost of care more affordable downstream for employers, plan sponsors and members.

At the same time, providers are the ones prescribing certain drugs for their patients, so it’s important that they have the information needed to recommend the most appropriate yet cost-effective care plans.

Questions to ask a prospective insurance carrier:

• Do you provide members’ cost and coverage information for their providers’ electronic medical records?

• Are you able to prompt prescribers when there is a lower-cost drug alternative in a member’s plan’s formulary?

• Do you have a cancer guidance program? Such a program may use evidence-based treatment, utilization management and analytics to help oncologists find quality, cost-efficient cancer treatment regimens for their patients — and obtain faster prior authorizations.

Look for a carrier that offers programs and services designed to help members make more informed health care choices and get the drugs or treatment they need

Helping members find and choose quality care options that may be more affordable is critical. Empowering them to make more informed decisions requires giving them access to that information and making it easier for them to understand.

For example, some carriers offer tools that allow members to search and compare prices for a broad set of generic drugs to help ensure they are getting them at the most competitive price possible—whether or not it’s covered under their benefits. Today, tools also exist for alerting members when a lower-cost medication alternative is available. While the emergence of copay-only plans and $0 out-of-pocket costs for certain vital medications are helping simplify the member’s experience and potentially help represent savings.

Questions to ask a prospective insurance carrier:

• What tools and resources do you have available to help members navigate and better understand their benefits experience?
• How can you help members have better cost transparency?
• What strategies do you employ for providing members with both live advocacy and AI-driven digital support with their benefits needs?

Data sharing is key

While there are a variety of advantages to offering integrated pharmacy and medical benefits from one insurance carrier, one that stands out is data sharing. When data and coverage information are shared across a member’s pharmacy and medical benefits, the carrier and providers have a clearer view into a member’s health status and their whole-person health needs. As a result, they may identify and engage members more quickly and make more informed care decisions—all with the goal of achieving better health outcomes and lower costs, while making health care more seamless and coordinated. With a data-driven, cross-benefit and integrated approach to drug management, it is possible to control overall spending, while still providing member and plan participant coverage for therapies that drive improved health outcomes.

Eric C. Swain, Vice President, UnitedHealthcare E&I, New England
[email protected]

²UnitedHealthcare 2023 commercial fully insured internal data, post-rebate, allowed amount. 
www.usatoday.com/story/money/business/2025/03/05/weight-loss-drug-wegovy-price-cut/81613259007/

³Connecting Medical and Pharmacy Benefits to Improve Care and Lower Costs. HCSC, Nov. 9, 2023;
 www.hcsc.com/newsroom/category/affordability/connecting-medical-pharmacy-benefits-improve-care-lower-costs

⁴Optum Rx internal analysis of full-year (Apr 2022 – Mar 2023) trial claim and production claim data.

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