Survey shows: Employers predict rising drug prices for 2025

Employers expect prescription drug costs to rise an average of 8% in 2025, which would be the highest price in 15 years, according to a press release issued yesterday. The data comes from results of the 2025 Segal Health Plan Cost Trend Survey, an annual survey of managed care organizations, health insurers, prescription drug managers (PBMs) and third-party administrators (TPAs). Price inflation is the largest factor in medical costs.

Respondents expect the highest rates to be for all outpatient prescription drugs, with an increase of 11.4%, compared to last year's forecast rate of 9.9%, calculated before PBM rebates. Outpatient prescription drug trends are influenced by factors such as drug price inflation, direct-to-consumer advertising, and a changing drug mix.

The increasing use of glucagon-like peptide 1 (GLP-1) drugs is a driving force in drug prices because of their effectiveness in treating both type 2 diabetes and obesity, the survey said. In 2023, obesity treatment was the condition driving the most prices at 255.3%, followed by migraine at 31.4%.

“Employers want to provide robust health benefits to their employees and families so they can maintain a healthy lifestyle, including a healthy weight,” said Eric Miller, vice president and consulting actuary in Segal's National Health Consulting and Analytics practice. “However, the high cost, high demand and varying time horizons for achieving improved health outcomes present challenges to optimizing the use of GLP-1, and this challenge is expected to become more acute in 2025 and beyond.”

The cost-benefit analysis for GLP-1 drugs is different from other drugs because they are expensive and many low-risk patients take them. Although effective in weight loss, it may take years for the full effects of these drugs to occur. In the meantime, prices are expected to continue to rise.

Survey respondents also rated the top five health insurance cost management strategies, the top two of which were related to GLP-1s. These are:

1. Implementation of GLP-1 antidiabetic treatment strategies – (e.g. boundaries, step therapies and prior authorization)

2. Implementation of strategies to cover GLP-1 drugs for obesity – (e.g. limits, phased therapies, lifestyle changes and no insurance coverage)

Other survey findings include a projected trend of 13.3% for specialty medicines in 2025. Projections for dental professional organizations and vision trends are lower at 4.5% and 3.0%, respectively.

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

Participants in the Segal Health Plan Cost Trend Survey represent more than 80% of the commercial and self-insured health insurance market. Full survey results for 2025 are available on the Segal Health Plan Cost Trend Survey website.