Employers Predict Drug Prices Will Increase in 2025, Survey Shows

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Employers expect prescription drug costs to increase an average of 8% in 2025, making prices the highest they’ve been in 15 years, according to a news release published yesterday. Data was taken from the results of the 2025 Segal Health Plan Cost Trend Survey, an annual survey of managed care organizations, health insurers, prescription drug benefit managers (PBMs) and third party administrators (TPAs). Price inflation is the biggest factor on medical costs.

Respondents predict that the highest rates will be reflected in all outpatient prescription drugs with an 11.4% increase, up from last year’s projected rate of 9.9%, calculated before PBM rebates. Outpatient prescription drugs trends are affected by factors such as drug price inflation, direct-to-consumer advertising and a changing drug mix.

The increased use of drugs with the glucagon-like peptide 1 (GLP-1s) is a driving force in drug prices, due to their effectiveness in treating both type 2 diabetes and obesity, the survey reports. In 2023, obesity management was the top medical condition driving costs at 255.3%, followed by migraines at 31.4%.

“Employers want to provide robust health benefits to their employees and families to maintain healthy lifestyles, including being at a healthy weight,” Eric Miller, vice president and consulting actuary in the National Health Consulting and Analytics practice at Segal. “However, the high cost, high demand and varying time horizons for realizing improved health outcomes creates a challenge for optimizing the use of GLP-1s, and that challenge is expected to escalate in 2025 and beyond.”

The cost benefit analysis is different for GLP-1s than other drugs because of the high price tag and amount of low-risk patients on them. While they are effective for weight loss, years may pass until the full effects of these drugs are realized. In the meantime, prices are expected to continue rising.

Survey participants also ranked the top five health plan cost management strategies, the top two of which were related to GLP-1s. They are:

1. Implement strategies to address anti-diabetic GLP-1 medications - (e.g., limits, step therapies and preauthorization)

2. Implement strategies to address anti-obesity medications for GLP-1 coverage - (e.g., limits, step therapies, lifestyle modification and no coverage)

Other survey findings include a predicted 13.3% specialty drug trend in 2025. Projections for dental provider organizations and vision trends are lower at 4.5 and 3.0%.

The medical trend forecast for Medicare-eligible retirees with Medicare Advantage (MA) PPO plans is 4.9% and the Medicare Part D trend projection is almost double at 8.9%.

The Segal Health Plan Cost Trend Survey respondents represent more than 80% of the commercially insured and self-insured market. The full 2025 survey results are available on their website.