Taking Care of Employees and Costs

Healthcare costs are rising, and employers are feeling the sting. Health benefits are one of the top operating expenses for many employers, driven in part by high prescription costs. A recent Marsh McLennan Agency (MMA) analysis found that employee medical plans and pharmacy  benefits account for nearly 40% of total healthcare costs. Understandably, many employers are exploring ways to balance their healthcare spend.

MMA pharmacy specialists work with companies to find solutions that benefit both employer and employee. They review contracts, negotiate prices, recommend program adjustments, and collaborate with benefits teams and pharmacy benefits managers (PBM). Since MMA’s pharmacy program launched 10 years ago, specialists have saved clients more than $1.5 billion.

Here, MMA pharmacy benefits leaders Rick Kelly and Karen Springstead share insights on healthcare costs, prescription benefits, and how today’s market requires an overhaul.

Healthcare continues to be one of the largest line items for employers, with the majority of that being prescription drug costs. How did we get here and what does this mean for employers?

KS: The spikes we’ve seen in pharmacy costs over the last few years are driven by two main components: specialty drugs that make up a larger percentage of the overall pharmacy costs for an employer (Specialty medications treat complex conditions like neurological and autoimmune diseases and can cost hundreds of thousands of dollars), and the explosion of employees being prescribed GLP-1s—for Type 2 diabetes, as well as for weight loss.

RK: In addition, when we talk about total pharmacy spend, we need to factor in the cost for oncology treatments, which are usually covered under the medical plan. According to MMA’s 2026 Employee Health and Benefits Trends Report, cancer diagnoses among people ages 20 to 29 have nearly doubled since 2018, indicating employers are now seeing a higher quantity of costly oncology-related claims from this formerly “healthy” workforce demographic. It seems that everyone is on a GLP-1 drug, or knows someone who is.

What’s behind this class of drugs taking the mainstream by storm?

RK: The effectiveness of GLP-1s for treating Type 2 diabetes have made them a first line of defense. For weight loss, their success has led to members asking for them by name.

KS: What’s made their popularity even more exponential is that many manufacturers are increasing accessibility by offering GLP-1s to those without insurance coverage at a reduced price—a phenomenon we rarely see.

How could the increasing availability of Direct-to-Consumer (DTC) drugs impact pharmacy benefits, particularly related to weight loss GLP-1s?

KS: Less than 20% of our clients currently include GLP-1 weight-loss medications in their coverage, though some offer comprehensive diabetes wellness plans through their carrier or no-cost weight loss programs. We’re seeing a lot of potential opportunities to help employers navigate how they may be able to take advantage of DTC to educate members without coverage on how they may be able to access the cash market.  

RK: Another option for employers is setting up a health reimbursement arrangement, such as an HRA, that gives employees flexibility on how to use employer-provided healthcare dollars. Some people may use that to cover weight loss medications, while others may use it for things like contact lenses, mental health counseling, or other prescriptions. In this scenario, the employer’s exposure would be capped to whatever amount they felt comfortable adding to these accounts.

What specific strategies can employers employers use to optimize their  pharmacy benefits for both cost control and clinical effectiveness?

RK: Employers are getting desperate in terms of healthcare costs, and unfortunately there’s not a surplus of money to divert to their benefit plans. We are going to see employers conducting much deeper coverage reviews than they did five or 10 years ago. That includes what preferred drug list, or formulary, is used and how restrictive it should be, and ensuring that clinical oversight on pharmacy is performing as expected.

KS: We also look at various approaches to purchasing medications. Beyond the base benefit plan, strategies such as variable copay card programs, patient assistance programs, and international sourcing, can help both employees and employers save money.

When you ’re engaging with a client whose goal is to cut overall healthcare costs, where do you typically recommend they start?

RK: The first thing is making sure that the language in their PBM contract has been reviewed and the employer is comfortable with how the terms and conditions could impact their workforce and bottom line. Then we look at their data, set a benchmark for their overall plan performance, and match that with opportunities that fit their culture, like positioning healthcare as a key recruiting and retention tool. We develop a holistic healthcare strategy to help them both take care of their members and take care of their costs.

KS: We know that all of our clients, ultimately, are looking to curb costs. Where it gets interesting is digging into the data available to us—claims, benefits usage, wellness programs, etc.—and creating programs that match their benefits philosophy. Different employers have different workforces, each with their own baselines, goals, and budgets. Large employers, generally, have larger pockets, but they also have a larger range of employee health issues, while smaller employers may have targeted areas of claims, making it easier to pinpoint where to focus the budget. We help them understand, map out strategies, and implement the best solutions. It’s a great feeling seeing clients achieve their goals and help their individual employees experience better health outcomes.