Specialty Drugs, Chronic Conditions Drive U.S. Employers to Reevaluate Health Plans

It was found that one in three U.S. employers plans to make significant changes to their healthcare programs within the next three years as costs rise to their highest point in more than two decades, according to a survey published by WTW.

The 2025 Best Practices in Healthcare Survey found that U.S. employers project their healthcare costs, before plan changes, will increase by 9.1% in 2026, compared with 8.1% in 2025 and 7.0% in 2024. After planned program adjustments, costs are expected to rise 8.0%, 7.0%, and 6.0% in those years.

The survey, conducted in June and July 2025, included 417 employers representing five million employees.

Employers adapt healthcare strategies amid rising costs, focusing on specialty drugs and chronic conditions to enhance employee well-being and control expenses.

Pharmacy costs, especially specialty pharmaceuticals and GLP-1 medications, were cited as high-cost claimants, and chronic conditions, including musculoskeletal issues and cancers, as the top drivers of rising healthcare expenses. To address these challenges, employers are focusing on company medical and pharmacy costs, affordability for employees, and initiatives to improve employee well-being, experience, and healthcare delivery.

“Fewer employers are absorbing rising costs because it’s becoming too expensive,” Tim Stawicki, chief actuary of Health & Benefits at WTW, said in the release. “They’re also avoiding aggressive cost-shifting because it can affect employee health, satisfaction and retention. Instead, employers are looking to bold, disruptive changes that control costs and improve health to create a more sustainable path forward.”

It was revealed employers’ strategies to combat these issues include managing vendor contracts, conducting audits, preventing overutilization and improving operational efficiency.

Data from the survey shared that 59% of respondents plan to implement broader cost-saving measures in the next three years compared to the 46% in the past three years.

Many are also reviewing vendor performance (46%), putting medical plans out to bid (36% in the process, 50% planning) and auditing medical claims (33% in the works, 44% planning). Reviews of prior authorizations and out-of-network payments are also increasing.

Alternative plan designs are also gaining traction.

Currently used by 41% of companies, these plans highlight select or alternative providers, cost transparency, enhanced navigation, member-facing technology and high-performance primary care. Almost half of employers plan to implement these features in the next two years, which would bring total usage to 87%.

It was also revealed that pharmacy benefits management (PBMs) remains under scrutiny as well. Three-quarters of employers have or plan to take their PBM out to bid, 58% recently audited their pharmacy benefits and nearly half (49%) use transparent, pass-through contract structures, with another 22% considering them.

Employers are also evaluating coverage for GLP-1 medications for obesity, often tying coverage to lifestyle programs, step therapy or higher cost sharing.

Supporting the survey findings, the 2025 Artemetrx State of Specialty Spend and Trend Report from Pharmaceutical Strategies Group (PSG) found that per-member-per-year specialty drug costs rose from $1,333 in 2023 to $1,641 in 2024, though the overall specialty drug trend slowed to 9.6%, down from 14.4% in 2023.

“The data reveals a compelling story regarding what is happening with specialty drugs,” Morgan Lee, Ph.D., senior director of research & strategy at PSG, said in a previous announcement. “Overall costs continue to increase for healthcare payers, but what is driving that cost is changing,”

Lee added that adoption of biosimilars, particularly Humira (adalimumab), helped reduce cost-per-claim trends, highlighting the evolving strategies employers are using to manage specialty drug spending.

Artificial intelligence is also beginning to shape benefits programs.

Results from the WTW survey revealed that while only 21% of employers currently use AI extensively or moderately in healthcare, 80% believe it will transform the way benefits are managed, communicated and delivered over the next three years. Employers see opportunities in navigation, personalized decision support, communication and vendor evaluation.

Courtney Stubblefield, managing director of Health & Benefits at WTW, urged employers in the release that they should “take a more revolutionary approach to address both immediate cost pressures and long-term cost trends, especially since healthcare costs appear firmly on an upward trajectory.”