The power of pathway design in managing high-cost drug spend

Employers are right to look at rebates, formulary placement, and unit cost when they’re trying to manage specialty drug costs. But for many high-cost therapies, the drug is only part of the story. Total treatment cost can vary depending on where care happens and which benefit pays the claim.

That matters more every year as employers see more high-cost infusions, biologics, cancer therapies, and cell and gene therapies. Many of these treatments bring high administration costs on top of the drug itself, especially when care happens in a hospital outpatient setting instead of a lower-cost alternative care site.

As specialty treatment costs keep climbing, pathway design is becoming a practical way to help manage costs.

Why care setting matters

One example of pathway-driven cost variation is care setting. 

Depending on the therapy and market, the same infused therapy may be administered in a hospital outpatient setting, a physician office, a standalone infusion center, or at home—and the cost can vary widely from one setting to the next.  A 2025 analysis found that hospital outpatient infusion costs were about 42% higher than costs at alternative sites of care, with no matching improvement in adherence or adverse-event outcomes.¹

Facility fees, hospital payment rules, and differences in how infusion services are billed across care settings all add up to meaningful differences in total treatment cost.

Employers are taking a closer look at moving care to lower-cost settings as the gap between treatment sites becomes harder to justify. And as demand for lower-cost options grows, more home infusion and alternate-site providers have entered the market in recent years.²

Employers that want to explore lower-cost care settings now have a broader, more established set of delivery options to work with.

Why benefit routing matters

Care setting is only one part of the pathway equation. For some therapies, costs can also change depending on whether treatment is billed through the medical benefit or the pharmacy benefit.

For some specialty therapies, the pharmacy benefit may give employers more control over pricing and reimbursement. In other cases, the medical benefit may still be more cost-effective depending on provider contracts and billing rules.

Like care-setting decisions, these savings do not come from changing the drug or treatment itself. The same therapy on the same schedule, may result in different costs depending on how the pathway is set up and which benefit pays the claim.

Why disruption is often overstated

One of the biggest barriers to moving care away from hospital outpatient settings is the worry that it will disrupt patients. But that concern may not always match the patient experience. For patients receiving multi-hour infusions, standalone infusion centers can offer more privacy, shorter waits, and a more comfortable setting than hospital outpatient departments.

Access to alternate-site infusion care is still uneven from one market to the next. But when employers avoid changing the care setting solely to minimize disruption, they may end up keeping patients in higher-cost pathways that may not improve the experience.

A path(way) to lower specialty spend

As the use of high-cost specialty therapies continues to rise, employers may need to use every practical lever available to keep healthcare costs in check. Unlike drug pricing, rebates, or manufacturer contracting, pathway design is something employers may be able to influence directly.

Care-setting choices and benefit-routing decisions may help lower the total cost of treatment without changing the therapy or the dosing schedule. For employers already wrestling with rising specialty costs, pathway design may offer one way to help manage spend in one of the fastest-growing parts of the benefits budget.

Source:

1. Cullen, Daniel, et al. “Infusion Therapy Patient Outcomes Are Similar at Reduced Costs in Alternative Sites of Care Compared With Hospital Outpatient Departments.” Journal of Managed Care & Specialty Pharmacy, 2026.
2. MMIT. “Changing Site-of-Care Dynamics and the Growth of Self-Administered Therapies.” MMIT, 2025.