1. The Inside Scoop
  2. Prescription Savings
  3. Projection Trends: Rx Cost Drivers to Watch in 2026
prescription cost trend forecast

Projection Trends: Rx Cost Drivers to Watch in 2026

December 9, 2025

Key Takeaways

  • Specialty drugs dominate spending growth: These medications now account for over half of total pharmacy spend, with trends nearly a percentage point higher than all outpatient drugs.
  • GLP-1 medications reshape budgets: Weight management drugs like Ozempic doubled their pharmacy spend share from 9% to 17% in just two years, despite upcoming price reductions.
  • Gene therapies drive extreme costs: Annual spending on cell and gene therapies will reach $25.3 billion in 2026, with individual treatments costing $65,000 to $4.25 million.
  • Medicare negotiations provide relief: The Inflation Reduction Act's drug price negotiations will save beneficiaries $1.5 billion annually starting in 2026, with negotiated prices averaging 22% lower.
  • Plan sponsors embrace transparency: Approximately 10% of health plans are exploring unbundled PBM models, while data analytics help reduce pharmacy spend by over 25% in the first year.
A blank prescription script, banknote, and medicine
Inside Scoop

The Inside Rx Blog

Get the Inside Scoop on tips & tricks that may help your family save on prescriptions!

Subscribe to stay up to date with the latest news and tips

Medical plan costs face a median 9 percent increase projection for 2026, representing the highest annual projection in more than a decade. Prescription drugs present the most significant concern, with projected rates reaching double digits for 2026.

Plan sponsors require detailed understanding of key cost drivers for effective strategic planning. Specialty drugs pose particular challenges, with trend projections nearly a percentage point higher than all outpatient prescription drugs. Medications including Ozempic and Wegovy have altered pharmacy budget allocations, expanding their share of pharmacy spend from 9 percent to 17 percent within two years. This weight management drug utilization growth demonstrates the access versus affordability equation facing employers and plan sponsors.

New high-cost therapies replacing lower-cost treatment options drive specialty drug trends, accounting for 62 percent of the specialty drug gross cost-trend increase before rebates. Medicare drug price negotiations offer potential cost relief, taking effect in 2026 with estimated savings of $1.5 billion in annual out-of-pocket costs for Medicare beneficiaries and $6 billion per year for the Medicare program.

Top Prescription Drug Cost Drivers in 2026

Four primary factors contribute to prescription drug cost escalation in 2026, presenting distinct operational challenges for plan sponsors and healthcare systems.

GLP-1 medications and their growing impact

GLP-1 medications constitute a substantial cost driver for 2026. Ozempic and Wegovy prices may drop from $1,000 and $1,350 per month to $350 when purchased through TrumpRx. Medicare patients face copays as low as $50 per month. Novo Nordisk anticipates only a "low single digit" negative impact on global sales growth in 2026, with volume growth offsetting price reductions. Semaglutide revenues project approximately $36 billion in 2026, compared to $33 billion in 2025.

Gene and cell therapies entering the market

Gene therapy market is projected to grow dramatically, reaching $49 billion by 2035 with a 19.4% CAGR between 2026-2035. Cancer rate increases drive this expansion, with WHO predicting 35 million new cancer cases by 2050. Annual spending on cell and gene therapies reaches $25.3 billion in 2026. Treatment costs range from $65,000 to $4.25 million per therapy. Hemgenix carries a cost of $3.5 million per treatment, while Zynteglo costs $2.8 million.

Tariffs on imported branded drugs

Proposed 100% tariffs target imported branded and patented medicines, with implementation postponed to encourage domestic manufacturing. Generics represent approximately 90% of U.S. prescriptions and remain exempt from these tariffs. European Union drug imports face a reduced 15% tariff rate. This policy addresses the $233 billion in pharmaceutical imports recorded in 2024.

Inflation and supply chain disruptions

Supply chain vulnerabilities persist as a 2026 concern. U.S. pharmaceutical industry imports totaled $168 billion in unfinished pharmaceutical products during 2024. U.S.-China geopolitical tensions alter sourcing strategies, affecting 90% of U.S. biotech companies dependent on imported components. Temperature-sensitive biologics face cold chain risks, with early clinical development frequently lacking essential temperature excursion data.

Specialty Drugs and Biosimilars: A Mixed Bag

Specialty pharmaceuticals now account for more than half of total pharmacy spend, presenting substantial challenges for healthcare expenditure control.

Why specialty drugs are driving double-digit trends

Specialty drug cost increases continue at double-digit rates across prescription cost trend forecasts. Specialty drug trends exceed all outpatient prescription drug trends by nearly a percentage point. The specialty drug pipeline shows rapid expansion, with these complex therapies representing 75% of the drug pipeline in 2024.

Between 2025 and 2027, more than 80 specialty drugs for rare diseases will launch across 70+ conditions. Annual treatment costs span from $6,000 to $3.20 million. Cell and gene therapies account for 25 percent of this specialty spend. Oncology treatments demonstrate significant growth, with per-member-per-month oncology spend projected to double between 2025 and 2027.

Slow adoption of biosimilars and its consequences

Biosimilars face adoption challenges despite pricing 15-35 percent below biologics. United States biosimilar availability spans more than 5 years, while European availability exceeds 15 years. Patient initiation rates reach only 27 percent overall for biosimilar versions.

Market uptake demonstrates significant variation by medication: insulin lispro achieves 8 percent uptake while bevacizumab reaches 82 percent. This adoption pattern persists despite $37 billion in biosimilar-generated savings. Economic factors including absent financial rebates and non-economic barriers such as prescriber knowledge gaps and safety concerns limit adoption rates.

Top 10 drugs contributing to rising costs

The Centers for Medicare & Medicaid Services selected 10 high-cost drugs for 2026 price negotiation:

These 10 medications generated $50.5 billion in total Part D gross covered prescription drug costs, representing approximately 20 percent of total Part D spending. Negotiated prices effective January 2026 reflect minimum reductions of 38 percent from 2023 list prices. These negotiations will reduce Medicare beneficiary out-of-pocket costs by $1.5 billion annually while saving the Medicare program $6 billion per year.

Policy and Regulatory Shifts Affecting Rx Costs

Federal and state policy reforms target prescription drug price escalation through legislative and regulatory mechanisms.

Medicare drug price negotiations under the IRA

The Inflation Reduction Act authorizes Medicare price negotiations for high-expenditure drugs lacking generic alternatives. CMS finalized manufacturer agreements for 10 Part D medications effective January 2026, with prices averaging 22% lower than 2023 levels. Medicare beneficiaries will see approximately $1.5 billion reduction in out-of-pocket costs, while program spending decreases by $6 billion annually. CMS selected 15 additional drugs for 2027 implementation, including Ozempic and Wegovy.

State-level drug transparency laws

23 states have enacted drug price transparency legislation requiring manufacturer price reporting. These statutes mandate disclosure when medications exceed specified cost thresholds or experience substantial price increases. Texas requires reporting for drugs with wholesale acquisition costs of $100 or higher that increase 15% annually or 40% over three years. Current legislation fails to reveal actual transaction prices throughout the supply chain.

Changes in Medicaid and Medicare Advantage plans

The GENEROUS Medicaid Model permits participating states to purchase drugs at prices equivalent to eight developed countries starting 2026. Medicare Part D enrollees face out-of-pocket prescription cost caps of $2,100, increased from $2,000 in 2025. Standalone Part D plan premiums will decrease from $38.31 in 2025 to $34.50 in 2026.

How Plan Sponsors Are Responding to Cost Pressures

Plan sponsors have adopted targeted strategies to address prescription cost escalation.

Value-based contracts and prior authorization

Value-based contracts (VBCs) connect medication reimbursement to real-world performance. These arrangements minimize payer risk from suboptimal purchases while facing implementation obstacles including data collection constraints and regulatory barriers. Prior authorization programs optimize patient outcomes through appropriate medication utilization. This process prevents inappropriate prescribing and supports evidence-based therapy.

Data analytics and claims monitoring

Data-driven decision-making allows employers to reduce pharmacy spend by more than 25% on average during the first year. Advanced analytics identify financial and clinical risks within prescription programs, establishing opportunities to maximize savings while maintaining care quality.

Member education and wraparound services

Wraparound services extend mandated care through additional benefits including prescription drugs, home care, dental, vision, and hearing coverage. These services maintain older adult health and help prevent or delay nursing home care, reducing long-term costs.

Inside Rx to Save on Prescription Medications

Prescription discount cards, like Inside Rx, may be able to help individuals save up to 80% on their prescription medications. There is no fee and no subscription is required. Simply compare the price of the medication at local pharmacies, download, text, email or print the Inside Rx savings coupon and take it to the pharmacy to see if you can save.

The Inside Rx prescription discount card works like a coupon to save on the cost of prescription medication at your local pharmacy.

Ozempic

$ 1,101.99
Pen Injector, 1/0.75(3) (Package Of 3.0 Ml)
1 Package

Bupropion Hcl

$ 10.00
Tablet, 75 Mg
30 Tablets

Conclusion

Prescription drug costs present substantial challenges for plan sponsors through 2026. Double-digit increases, particularly for specialty medications, require immediate strategic attention. Specialty pharmaceuticals now represent over half of total pharmacy spend, with therapies for rare diseases commanding prices from $6,000 to $3.2 million annually.

Key cost drivers require careful analysis for effective management. GLP-1 medications including Ozempic and Wegovy have reshaped pharmacy budget allocations, while gene and cell therapies expand market presence with high price points. Supply chain vulnerabilities and potential tariffs on imported drugs add complexity to cost management strategies.

Policy reforms provide measured relief. Medicare drug price negotiations under the Inflation Reduction Act take effect in 2026, saving beneficiaries $1.5 billion annually. State-level transparency laws target price escalation, though effectiveness remains constrained.

Plan sponsors have implemented proactive response strategies. Value-based contracts linking reimbursement to real-world performance help mitigate financial risks, while data analytics identify savings opportunities without compromising patient care.

The 2026 landscape requires multi-faceted approaches balancing cost containment with appropriate medication access. Prescription drugs remain both a significant expense and essential component of employee health benefits. Strategic planning today determines cost management effectiveness while maintaining quality care for plan members.

References

Topics:
Prescription Savings