GLP-1s and rising drug costs: a playbook for benefits leaders

Pharmacy benefits have reached a turning point.

Once considered a supporting element of plan design, prescription drug spend is now outpacing medical spend and commanding the full attention of HR, finance, and benefits leaders alike. As employers face rising costs, limited resources, and growing pressure to improve access, two categories of medication are standing out:

• GLP-1s, with their explosive demand and blockbuster price tags
• Biosimilars, offering major cost-saving potential but often underused

In a recent webinar with experts from Rightway, Nava unpacked what employers need to know—and do—about this new era of pharmacy decision-making. Here’s what came to light.

What’s the current pharmacy landscape?

Prescription drug costs are growing 1.5x faster than medical spend, up 11.4% in 2023 compared to 7.5% growth across the healthcare sector. That trend is particularly burdensome for self-funded employers, and it’s driven by four key dynamics:

• Rising GLP-1 demand: Originally developed for Type 2 diabetes, GLP-1s like Ozempic and Wegovy are now also used for weight loss and cardiovascular care. J.P. Morgan forecasts the global GLP-1 market will exceed $44 billion by 2030.
• Biosimilar bottlenecks: While biosimilars are typically 25–30% cheaper than their brand-name counterparts, their adoption remains sluggish. Pharmacy benefits manager (PBM) formulary restrictions often limit access, favoring higher-cost brand-name drugs over more affordable biosimilars.
• Rebate-driven PBM models: Traditional PBMs often base formulary decisions on rebate potential rather than net cost. This incentivizes the use of expensive brand-name drugs over lower-cost options, resulting in higher overall pharmacy spend and limited transparency for employers.

The pharmacy space is being stress-tested, and employers are at a critical decision point.

What are biosimilars, and why do they matter?

To understand biosimilars, it helps to start with biologics. Biologics are powerful, cutting-edge drugs made from living organisms—unlike traditional drugs, which are synthesized from chemicals. They’re used to treat complex, chronic conditions like cancer, autoimmune disorders, and diabetes, and they’re notoriously expensive due to their intricate manufacturing and high clinical value.

Biosimilars are medications that are highly similar to an already approved biologic, with no clinically meaningful differences in terms of safety, strength, or effectiveness. Think of them as the equivalent of generics for biologics. Because biologics are far more complex, biosimilars are harder to develop, test, and bring to market.

Why biosimilars matter:

Biosimilars can deliver the same therapeutic benefits at a much lower cost, making them a critical (and often overlooked) tool for reducing pharmacy spend and expanding access to care.

Yet adoption remains stubbornly low.

Case in point: Even after the launch of nine biosimilars, Humira still commands more than 98% of the U.S. adalimumab market, as of 2024.

Why employers aren’t seeing savings from biosimilars under traditional PBM models

Traditional PBMs often block biosimilars from formularies—not due to clinical concerns, but because rebates tied to high-cost brands are more lucrative. In some cases, PBMs even prioritize their own private-label biosimilars, which may be priced similarly to the brand.

This creates a façade of biosimilar adoption without the true cost savings.

How a clinical-first PBM strategy lowers drug costs for employers

We have good news: employers don’t have to accept these inflated costs as inevitable. Just because a drug is expensive on paper doesn’t mean it has to be expensive for your plan. With the right strategy and pharmacy partner, it’s possible to break free from rebate-driven models and unlock real savings—without compromising clinical quality or member experience.

As an example, Rightway highlighted a different approach by designing strategies to reach the lowest net cost possible—not the highest rebate yield. Their biosimilar strategy includes:

• Evidence-based formularies: Drugs are chosen based on clinical outcomes and net cost, not manufacturer incentives.
• Rigorous clinical oversight: Prescribers are guided toward cost-effective, guideline-aligned treatments.
• Pharmacy navigation & member outreach: Rightway pharmacists engage directly with providers and members to explain biosimilar transitions, delivering clarity instead of confusion.
• Copay maximization: Members are enrolled in assistance programs to lower their out-of-pocket costs.

What this looks like in practice: real-world savings

Humira vs. Yusimry (Biosimilar)

• Traditional PBM: ~$3,500 per month
• Rightway (brand, transparent pass-through): ~$2,450
• Rightway (biosimilar): $639 per month
• → ~80% cost reduction

Stelara vs. Otlufi (Biosimilar)

• Traditional PBM: ~$15,500 per month
• Rightway (biosimilar): $1,200 per month
• → Over $170,000 saved annually per member

And these aren’t one-off wins—Rightway’s biosimilar strategy consistently delivers 90%+ member adoption with minimal disruption.

How a high-touch biosimilar conversion process can drive savings without disrupting care

A number of pharmacy partners are developing clinically guided approaches to help employers transition from costly biologics to lower-cost biosimilars. Rightway, for example, uses a five-step process that prioritizes provider collaboration and member communication, ensuring cost savings don’t come at the expense of experience or outcomes.

1. Prescription flagged: When a high-cost biologic is prescribed, the system flags it and identifies clinically appropriate biosimilar alternatives based on formulary and clinical data.‍

2. Prescriber outreach: A pharmacist contacts the prescribing provider directly to discuss switching to a comparable biosimilar backed by clinical evidence and guidelines.

3. Member communication: Members are proactively informed via phone, app, or chat to explain the change, answer questions, and confirm comfort with the switch.

4. Copay assistance: If eligible, members are enrolled in manufacturer assistance programs to reduce out-of-pocket costs.

5. Biosimilar fulfillment: The biosimilar is dispensed, ensuring seamless care delivery while significantly lowering the plan’s pharmacy spend.

This kind of high-touch, clinically aligned model demonstrates how biosimilar adoption can be both cost-effective and member-friendly when executed with the right safeguards.

Questions to ask your PBM about biosimilars

Whether you’re evaluating a new PBM or looking to optimize your strategy with an existing one, biosimilars should be a central part of the conversation. With high-cost biologics driving a significant portion of pharmacy spend, it’s essential to understand how your PBM handles biosimilar access, incentives, and education. Here are some questions to ask:

• What percentage of our biologic spend is on biosimilars vs. brands?
• Are biosimilars substituted automatically at the point of fill?
• Does our PBM’s formulary prioritize private-label biosimilars?
• What’s the current rebate structure, and is it auditable?
• What member and provider education is in place to support adoption?

GLP-1s: The high-cost, high-impact category taking over pharmacy spend

With biosimilars offering a path to savings, GLP-1s represent the opposite: a category with soaring demand, high unit cost, and no near-term biosimilar relief in sight.

These medications, originally for Type 2 diabetes, are now widely prescribed for:

• Weight management
• Cardiovascular risk
• Prediabetes prevention
• Sleep apnea and more (emerging indications)

GLP-1s are improving lives, but they’re also reshaping pharmacy budgets.

A smarter, tiered approach to GLP-1 coverage

As GLP-1s continue to gain traction, the question for employers isn’t whether to cover them—it’s how. Managing this category requires more than just cost controls; it calls for a thoughtful strategy that aligns clinical needs with plan design. That’s where a tiered, population-based approach comes in. Here’s how Rightway suggests employers can take a more thoughtful, targeted approach:

Diabetes

Maintain coverage for existing Type 2 diabetes patients, but monitor adherence closely—early drop-offs reduce ROI and impact.

High-risk comorbidities

For members with cardiovascular or other serious conditions, evaluate GLP-1 use based on clinical evidence and expected outcomes.

Weight management

When prescribed for weight loss, pair GLP-1 access with behavioral or lifestyle programs to promote lasting change.

Triple-risk patients

Prioritize access for members with diabetes, obesity, and cardiovascular disease, where the clinical value and cost impact are greatest.

Five plan design levers for GLP-1 management

So, how do you move from strategy to execution—delivering care where it’s needed while keeping GLP-1 costs under control? It starts with five practical plan design levers that can be customized to fit your population and goals. Think of it as a flexible toolkit, not a one-size-fits-all solution.

1. Open access: This approach offers the broadest coverage. Any member who meets basic clinical criteria can access GLP-1s. It maximizes access but carries the highest cost exposure.

2. Step therapy: Members participate in a behavioral or lifestyle program before beginning medication. This helps reinforce long-term change and improves ROI.

3. Tightened access controls: Eligibility is restricted using clinical criteria like BMI or comorbidities and enforced through prior authorization to ensure appropriate use.

4. Cost-sharing strategies: Tiered copays or employer offsets help manage plan costs while keeping therapy affordable for members.

5. Targeted coverage: GLP-1s are limited to members at highest clinical risk—such as those with obesity, diabetes, and cardiovascular disease—where outcomes and savings are most compelling.

The key advantage? You’re not locked into one path. Whether you're aiming to boost adherence, reduce inappropriate use, or optimize spend, this framework helps you do it on your terms.

Key questions to evaluate your GLP-1 strategy

Before approving or scaling coverage, employers should take a closer look at how GLP-1s are managed across their pharmacy and medical benefits. These questions can help you assess whether your current approach is driving outcomes, controlling costs, and aligning with long-term goals. Use them when evaluating a new PBM, reviewing spend with your current vendor, or developing internal guardrails with clinical partners.

• What are our current costs and member counts for GLP-1s?
• Do we require coaching or lifestyle program participation?
• How are we monitoring adherence and therapy persistence?
• What clinical guardrails are in place to prevent vanity use?
• Can we cap monthly or annual spend?
• Are rebate results being tracked and validated?

Pharmacy strategy needs a reset

GLP-1s and biosimilars aren’t isolated trends—they reflect a broader challenge: how to manage rising pharmacy costs while continuing to deliver high-quality care.

As pharmacy benefit dynamics grow more complex, many traditional models are showing their limitations. This moment presents an opportunity for employers to explore new approaches grounded in transparency, clinical insight, and member-focused support.

At Nava, we work with clients to uncover what’s really driving spend, ask smarter questions of their partners, and co-create pharmacy strategies that align with their goals—not just what’s always been done.

The world of specialty medications is evolving quickly, but you don’t have to navigate it alone.