Prescription Costs Projected to Rise to Nearly 10% According to 2024 Segal Health Plan Cost Trend Survey

Anti-obesity drugs to account for more than half of all diabetes drug therapy claim costs

The projected annual cost trend for outpatient prescription drugs is expected to approach 10 percent, coming after three years of actual trend exceeding projections, according to new data from the 2024 Segal Health Plan Cost Trend Survey, released by leading benefits and HR consulting firm Segal. Additionally, the per-person cost trend for open-access PPO/POS plans is projected to be 6.8 percent and the medical trend projections for Medicare-eligible retirees with Medicare Advantage PPO plans is forecasted to be 4.9 percent. The projected rise is to be driven by factors including prescription drug inflation, which continues to be the primary driver for inpatient hospital, physician and overall prescription medication trends.

Specialty drug trend alone is projected to be nearly 15 percent, driven by higher utilization of new high-cost specialty drugs replacing lower-cost therapies. Diabetes, autoimmune disease and psoriasis have been the top three disease indications for prescription drugs over the past few years. However, since the first quarter of 2021, anti-obesity medications have shown the greatest growth, climbing 114 percent. This is due to many factors, including the off-label, weight-loss use stemming from social media buzz and exponential market investments in anti-obesity drugs as well as the American Diabetes Association recommending GLP-1 medication to reduce health complications. GLP-1 drugs will account for more than half of all diabetes drug therapies claim costs by the end of this year.

“Given inflationary pressure, rising acuity, shifts in treatment patterns, as well as legislative, regulatory, and judicial developments impacting health benefit plans, it is vital for plan sponsors to regularly monitor their plan claims to address cost drivers,” said Eric Miller, Vice President and Consulting Actuary in the National Health Consulting and Analytics practice at Segal. “The Segal team continues to develop innovative cost mitigation strategies so that plans can still maintain their quality of care despite rising costs.”

The Segal survey, now in its 27^th year, is recognized as one of the most definitive surveys on employer-sponsored health plans. Participants include health insurers, managed care organizations (MCOs), pharmacy benefit managers (PBMs) and third-party administrators (TPAs). Survey respondents represent more than 80 percent of the commercially insured and self-insured market. Respondents shared their trend forecasts for medical, prescription drug, dental and vision coverage and actual health cost trends based on their group health plan experience. In addition, Segal’s annual survey report provides insight on how plan sponsors can address growing health costs.

About Segal

Segal delivers trusted advice that improves lives. Segal is a privately owned benefits, human capital, communications, technology, insurance brokerage and investment consulting firm with more than 1,000 employees throughout the U.S. and Canada. Segal, Segal Marco Advisors and Segal Benz are all members of the Segal family.

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