Specialty medications and injectables are changing how we treat chronic diseases - but they’re also breaking budgets. These drugs, used for conditions like cancer, rheumatoid arthritis, and MS, don’t just cost more. They dominate pharmacy spending. Even though they make up just 2% of all prescriptions, they account for half of all drug costs. In 2023, the average employer paid $34.50 per employee each month just for these drugs. And that number keeps climbing. If you’re managing healthcare costs - whether you’re an employer, insurer, or patient - you need to know how to cut these expenses without cutting care.
Use Formulary Management to Stop Wasteful Prescribing
One of the most effective ways to reduce costs is by controlling what gets prescribed. Formulary management means setting clear rules about which drugs are covered and when. This isn’t about denying care. It’s about making sure the right drug is used at the right time. For example, many patients start on expensive biologics before trying cheaper, equally effective alternatives. Step therapy fixes that. It requires patients to try a lower-cost option first - like a generic or older biologic - before moving to the pricier one. Prior authorization adds another layer: doctors must justify why a high-cost drug is necessary before it’s approved. Excellus BlueCross BlueShield saw $13.64 in monthly savings per member just by tightening their formulary for GLP-1 weight loss drugs. That’s not a small number. It adds up fast across thousands of members. And here’s the key: 87% of employers using this method said it didn’t hurt patient outcomes. In fact, adherence improved because patients got better support. The trick? Don’t make the rules too strict. Too many denials lead to frustration, appeals, and even delays in treatment. Work with pharmacists and doctors to build guidelines that are evidence-based, not just cost-driven.Narrow Your Pharmacy Network to Get Better Rates
Not all pharmacies are created equal - especially when it comes to specialty drugs. Most plans let patients use any pharmacy they want. But that’s a mistake. Specialty pharmacies that handle high-cost injectables often charge more because they have little competition. By switching to a narrow network - meaning you only contract with a few top-tier specialty pharmacies - you can cut costs by 10-15%. CarelonRx found that limiting networks led to lower contractual rates and better clinical support. Why? Because those pharmacies know they’re your only option, so they compete on service, not just price. Children’s Hospital Association tracked a $1.3 billion drug spend over three years. When they moved to a preferred CVS specialty pharmacy network, they saved 10%. Patients didn’t complain - they actually reported higher satisfaction with the support they got, like nurse call-backs and injection training. The catch? Transitioning takes time. Plan for 6-9 months. Notify members early. Provide clear instructions on how to switch. Some patients will resist - 22% of employers saw a spike in call center volume during the change. But after six months, complaints dropped. And savings stuck.Switch to Biosimilars - They’re Just as Good, But Much Cheaper
Biosimilars are the game-changer most people overlook. They’re not generics. But they’re not brand-name biologics either. They’re highly similar versions of complex biologic drugs, approved by the FDA after rigorous testing. The big win? Biosimilars cost about 50% less than the original drug. Quantum Health estimates they could save the U.S. healthcare system $180 billion over five years. And the numbers are real. Hospitals that switched to biosimilars for rheumatoid arthritis and cancer drugs saw 20-30% cost reductions - with no drop in patient outcomes. As of October 2023, the FDA had approved 42 biosimilars. But adoption is still under 30% in most categories. Why? Doctors are hesitant. Patients are scared. And manufacturers sometimes delay entry with legal tactics. The fix? Education. Give prescribers data. Show them real-world results. Offer patient brochures that explain biosimilars in plain language. One clinic in Wisconsin switched their entire infliximab (used for Crohn’s and arthritis) to a biosimilar. Costs dropped 48%. No side effects increased. Patients didn’t notice a difference. The FDA’s Project BioSet, launching in 2025, is designed to speed up biosimilar approvals. That means more options, faster. Get ready.
Move Injectables Out of Hospitals - Save Nearly Half the Cost
If your patient is getting an infusion in a hospital outpatient department, they’re paying too much. A lot too much. Prime Therapeutics found that 220 specialty drugs - making up 63% of specialty drug costs - could be safely given in a doctor’s office, clinic, or even at home. When they moved these treatments out of hospitals, costs dropped by 48%. Why? Hospitals charge for facility fees. A lot of them. A single infusion in a hospital can cost $1,200 just for the space and staff. In a doctor’s office? $600. At home with a nurse? $400. This isn’t just about money. It’s about comfort. Patients don’t want to sit in a hospital for hours. They’d rather be at home with their family. To make this work, you need to coordinate. Your plan must cover home infusion services. Your pharmacy must be able to ship the drug and send a nurse. Your provider must be trained to supervise remotely. But once it’s set up, the savings are automatic. And patients love it.Use Value-Based Contracts - Pay for Results, Not Just Pills
What if you only paid for a drug if it worked? That’s the idea behind value-based contracting. Instead of buying a year’s supply of a $10,000 drug upfront, you pay only if the patient’s disease improves. If it doesn’t? The manufacturer refunds part or all of the cost. Prime Therapeutics saw a 45% jump in these kinds of contracts in 2023. Companies like AbbVie and Amgen are now offering them for drugs used in MS, psoriasis, and inflammatory bowel disease. This isn’t magic. It requires data. You need to track patient outcomes - lab results, hospital visits, symptom scores - over time. But the payoff is huge. One employer saved $2.1 million in a year on a single MS drug by tying payments to relapse rates. The downside? It takes time to set up. Legal teams need to draft contracts. IT systems need to track outcomes. But for high-cost drugs with clear success metrics, it’s worth it.
Maximize Copay Assistance - But Don’t Let It Hurt Your Budget
Manufacturers often offer copay cards to help patients afford expensive drugs. Sounds great, right? Not always. Many of these cards don’t count toward your deductible or out-of-pocket maximum. So patients get $0 out-of-pocket - but your plan still pays the full price. And when patients hit their deductible later, they’re stuck with even higher costs. The solution? Copay maximizer programs. These programs redirect manufacturer assistance to cover your plan’s share - not the patient’s. That means patients still pay $0, but your plan saves money because the manufacturer pays more. CarelonRx found that with maximizers, employers saved 5-8% annually on specialty drugs. Patients stayed on treatment. And no one felt punished. The key? Only use maximizers for drugs where you have strong clinical control. Don’t let them apply to every drug - just the high-cost ones where you’re confident the treatment is necessary.What’s Next? The Future Is Integrated
By 2026, the most successful plans won’t separate pharmacy and medical benefits. They’ll treat them as one. Why? Because a $15,000 monthly injectable might be billed as a medical service (under your health plan) - not a pharmacy benefit (under your drug plan). That means it doesn’t go through your formulary, your network, or your cost controls. Quantum Health predicts that shifting 60-70% of specialty drugs from medical to pharmacy benefit will unlock lower net costs by 2026. That’s a massive opportunity. Also, look for policy changes. The Inflation Reduction Act lets Medicare negotiate drug prices. Experts say expanding that to private insurers could be the biggest cost saver in years. Right now, 78% of large employers are already using at least three of these strategies. You don’t need to do them all at once. Start with one. Pick the one that hurts most - maybe it’s your GLP-1 spending or your infusion bills. Tackle that. Measure the savings. Then move to the next.Frequently Asked Questions
Are biosimilars safe to use instead of brand-name biologics?
Yes. Biosimilars are approved by the FDA after rigorous testing to prove they work just like the original biologic. They don’t just look similar - they’re proven to have the same safety and effectiveness in clinical trials. Hospitals and clinics across the U.S. have been switching patients to biosimilars for years with no increase in side effects or treatment failures.
Why do some doctors refuse to prescribe biosimilars?
Some doctors are unfamiliar with biosimilars or worry about patient reactions. Others were trained on the original drug and don’t know the newer options. Education helps. When prescribers see real data - like lower costs and same outcomes - they start switching. Many clinics now use P&T committee reports and monthly usage dashboards to guide decisions.
Can I save money by switching my patient to home infusion?
Yes - often by nearly half. A hospital infusion can cost $1,200 just for the facility. At home, with a nurse, it’s closer to $400. Patients prefer it too. The key is making sure your plan covers home infusion services and that you have a reliable specialty pharmacy that can deliver the drug and coordinate nursing care.
What’s the biggest mistake people make when trying to cut specialty drug costs?
Trying to save by making patients pay more. Raising deductibles or coinsurance doesn’t reduce overall spending - it just shifts costs to people who can’t afford it. That leads to skipped doses, worse health, and higher hospital bills later. The smartest savings come from smarter systems - better contracts, better networks, better drugs - not higher patient bills.
How long does it take to see savings from these strategies?
It depends. Formulary changes and copay maximizers can show savings in 3-6 months. Narrow networks take 6-9 months to fully roll out. Biosimilar switches need provider education and may take a year to reach full adoption. But once they’re in place, savings compound. Most employers see a full return on investment within 12-18 months.
Comments
ryan Sifontes
January 29, 2026
They say formulary management helps but honestly who’s really watching the pharmacy? Big pharma owns the system. This is all theater.
Laura Arnal
January 29, 2026
Biosimilars are a game changer!! 🙌 I’ve seen patients switch and feel *better*-less side effects, more money in their pockets. Trust the science, not the fear. 💪
Jasneet Minhas
January 29, 2026
Interesting approach. However, in India, we don’t even have access to these drugs, let alone biosimilars or home infusions. So while your cost-saving strategies are clever, they’re a luxury for the West. 🤷♂️
Eli In
January 29, 2026
I love how this post balances cost and care. 🌍 So many people forget that saving money shouldn’t mean sacrificing dignity. Home infusions? Yes please. Patients deserve comfort, not hospital chairs.
Megan Brooks
January 30, 2026
The shift from medical to pharmacy benefit is a structural imperative. The current fragmentation creates regulatory arbitrage and undermines cost containment. A unified framework is not merely optimal-it is ethically necessary.
Ryan Pagan
January 30, 2026
Let’s be real-these big pharma companies are laughing all the way to the bank. They charge $10k for a vial and then slap on a ‘copay card’ so you think you’re getting help. Nah. You’re just their ATM with a pulse. 💸
Paul Adler
January 31, 2026
I’ve worked in specialty pharmacy for 12 years. The data here is solid. Narrow networks and biosimilars work. The resistance is mostly cultural-not clinical. Patience and education win.
Robin Keith
February 1, 2026
And yet… we’re still treating symptoms, not systems. Who designed this? Capitalism? Who benefits? Shareholders. Who suffers? The chronically ill, the underinsured, the ones who can’t afford to be ‘well-managed.’ This isn’t a cost problem-it’s a moral failure dressed in spreadsheets.
Sheryl Dhlamini
February 2, 2026
I used to work for a big insurer. We pushed step therapy hard. Then we got sued. Twice. Because a woman with MS had a relapse after being forced to try a generic. She ended up in the hospital. Guess who paid for that? Not the copay card. Not the biosimilar. Us.
Doug Gray
February 3, 2026
Value-based contracts sound elegant but require infrastructure that most health plans don’t possess. The data interoperability gaps alone make this a pipe dream. Plus, manufacturers will game the metrics. Always.
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