Escalating specialty drug and GLP-1 costs — and the strategies to fight them in 2025 and beyond

By:

Stanley Crittenden, MD
Chief Medical Officer, Quantum Health

Steven Knight
Chief Operating Officer, Quantum Health

Managing pharmacy drug benefits is complex and high-touch. Employers across the spectrum are scrambling to balance rapidly evolving member healthcare needs against increasingly unsustainable costs. Striking that balance with high-cost specialty drugs — and now GLP-1s — is especially tricky. The status quo solutions employers usually deploy (e.g., generics, rebates, specialty drug carve-out programs) are no match for surging pharmacy drug costs. 

Just how big is this problem? What’s driving it? And what concrete strategies should benefits leaders pursue to change this trajectory? We explore the challenges and solutions in this edition of Navigation Insider®. 

The outsized cost of specialty drugs 

Worries about rising healthcare costs have shifted from a focus on GDP percentage to a more pressing concern: unprecedented cost acceleration, particularly for self-insured employers. Projections for 2025 show an 8% surge to record levels with specialty prescription drugs as the key driver. Their explosive growth — from 10 medications in 1990 to over 300 by 2015, with 23 approved in the first half of 2024 — has led to mounting costs across every category. 

• Per year: The average annual cost per specialty drug is more than $5,000. 
• Per drug: Immunosuppressants like top-selling Humira® (adalimumab) command $77,000 per patient on average. 
• Per individual treatment: The most costly one-time curative treatments top $1 million. 

The added impact of GLP-1s 

The rapidly changing GLP-1 landscape is only compounding this challenge. Originally developed for diabetes management and cardiovascular health, GLP-1s have rapidly become a go-to treatment for weight loss and obesity. Their growth trajectory is unsustainable on multiple fronts: 

• Utilization: An estimated 2% to 12% of the U.S. population has tried GLP-1s. 
• Coverage: 67% of large employers now cover these medications for obesity — and more plan to.  
• Price: The annual per-member price tag of GLP-1 marketleader Wegovy® exceeds $16,000. 
• Continued demand: The GLP-1 market is forecasted to grow from $22 billion in 2024 to $105 billion by 2030. 

The potential impact is clear: GLP-1 and specialty pharmacy trends threaten to upend already-strained healthcare budgets and employer benefits programs. How did this happen? 

What is driving the cost trend for employers? 

Peeling the onion is an overused metaphor but it’s an apt one for healthcare’s cost drivers, which are increasingly complex and interconnected. 

Driver #1: The overall cost of services is rising 

To recoup pandemic losses, providers are raising their rates. These increases include not only standard rates but the year-over-year cost of medical services (e.g., office visits). 

Driver #2: Prescription drug costs are impenetrable and uncontrollable 

Employers generally know how to predict and manage medical costs. Not so on the pharmacy side, where so much is beyond their influence and line of sight. A few large, insurer-owned PBMs control much of the pharmacy supply chain and rebate dynamics. Their designs rival the shadowy, complex financial instruments that sunk the economy in 2008 and have created a healthcare economy where . . . 

• Pharmacy costs have risen from 15% to 25% of total healthcare spend. 
• Half of this spend is from five drugs. 
• Three of those are GLP-1s.  
• Employers need the right strategies, and the right partner, to face this perfect storm. 

Your 2025 specialty pharmacy and GLP-1 playbook   

Employers simply aren’t equipped to manage specialty drug utilization, cost or member experience. As a result, demand is increasing for pharmacy management and GLP-1 guidance, with 87% of consultants reporting that they’re actively engaged with GLP-1 strategy (Quantum Health-MedCity 2024 Benefits Consultants' Sentiment Index). Independent navigation capabilities are key, and Quantum Health is unique in its ability to provide them.

Quantum Health is the only navigation company with independent, in-house utilization management (UM) expertise and capabilities. For over two decades, we've delivered proven ROI in outcomes and member experience to our now 500 customers and their 3 million members. We are committed to delivering value within the pharmacy supply and value chains through member and provider engagement. 

Quantum Health provides robust UM, site of care review and benefits navigation within its core medical benefits plan services. Our Premier Pharmacy solutions include an emerging set of value-based interventions and GLP-1-specific solutions under the pharmacy benefit plan. We apply these dual medical-pharmacy levers at multiple friction points and with independent navigation expertise to deliver significant savings. 

Strategy #1: Meet rising demand with independent utilization management

By 2027, projections suggest that 2-3% of members will use specialty medications, representing 56% of employers’ total drug spend. Employers who deploy independent, proactive utilization management can thread the needle: ensuring their members have access to revolutionary treatments while keeping costs sustainable. 

Quantum Health’s independent Care Coordinators (known as Warriors™) connect employers, PBMs, providers and members. They evaluate authorization requests against rigorous and specific clinical criteria to evaluate prescription dosage, frequency and appropriateness. In addition, our Real-Time Intercept® (RTI) technology enables early intervention for authorization reviews — anticipating and managing specialty drug requests to potentially change the trajectory of care before it’s too late and claims are filed. 

The impact of this proactive utilization management strategy is significant. A 2023 Quantum Health study of 1.8 million plan members across 200 employers showed $1.37 PMPM savings for the average employer and $35 million annualized across employers. These savings came even as 98% of specialty drug requests were approved. Quantum Health can apply the same independent UM expertise for GLP-1 determinations.

Strategy #2: Drive down costs by improving member convenience and experience 

We know that pharmacy costs are spiking healthcare costs overall. A manageable component of these costs is site of care for specialty drugs, which are often administered in high-cost hospital settings. With specialty medications now representing 75% of all drugs in development, it is more critical than ever to optimize treatment settings by leveraging data and pharmacy expertise. Quantum Health does just that, generating significant savings: 

• To date, our pharmacy services team has identified 220+ drugs — representing 63% of specialty drug costs — where hospital-based administration isn't clinically necessary or cost-effective.  
• We have transitioned 91% of eligible cases to lower-cost settings like doctor’s offices and member homes. 
• This Quantum Health initiative generated $0.71 PMPM in pharmacy savings and $2.08 PMPM in total cost reduction when combined with UM savings. 

This is an additional example of how Quantum Health can combine its deep medical-side expertise to meet specialty drug cost challenges.  

Strategy #3: Maximize member and provider engagement to manage access 

When it comes to specialty drug and GLP-1 management, cost isn’t the only variable that matters. Achieving better outcomes through wraparound care and benefits management is also a priority. Here again, unprecedented demand has created another set of UM challenges for benefits leaders.  

We’ve already seen the expansion of GLP-1 use cases from diabetes management and cardiovascular health to weight loss and obesity. This is likely to soon expand into other areas of chronic condition management, such as addiction treatment. As this happens, patient safety and outcomes will continue to be a major concern. For example, a recent JAMA study identified rare but serious gastrointestinal risks associated with GLP-1s, while another study revealed that discontinuing GLP-1s early can negate all clinical benefits. 

These scenarios require thoughtful management. As GLP-1 use grows, only an expert navigation partner can manage these many variables and use cases. Quantum Health offers a unique, single point of access that can influence decision-making and bend the trajectory of member care through meaningful member and provider engagement. 

The moment calls for independent pharmacy benefits navigation

For all of their promise, high-cost curatives and GLP-1s represent an unfolding healthcare cautionary tale. There are no quick fixes for drugs with million-dollar price tags, and the situation will likely get worse before it gets better. The drug pipeline continues to expand exponentially, including the more than 120 GLP-1 formulations in development as of April 2024. 

Cost management is compounded because specialty drugs can fall under both the pharmacy and medical benefit. This results in a dual burden on both sides of the utilization management equation. For employer success in 2025 and beyond, pharmacy strategy must catch up with medical strategy. Benefits leaders must seek out independent healthcare navigation partners that are uniquely positioned to manage both sides of the specialty pharma equation. The future of affordable, employer-based healthcare depends on it.