The Rising Cost of Prescriptions: What HR and Compliance Leaders Need to Know Before Open Enrollment
Prescription drug costs are rising, and with open enrollment just weeks away, HR and compliance leaders can’t afford to ignore the impact of pharmacy benefit trends on overall plan performance.
Specialty medications, biologics, and even common maintenance drugs now account for a growing share of employer healthcare spend. In fact, the top 5% of prescriptions often make up over 50% of total pharmacy plan costs. If these drivers go unchecked, employers risk facing unexpected spikes, employee confusion, or worse, compliance issues.
Here’s what HR and compliance teams should be doing now to prepare.
The Cost Drivers You Can’t Afford to Overlook
High-cost prescriptions don’t always look like high-cost claims until it’s too late.
What’s behind the rise in pharmacy costs?
Introduction of new specialty drugs
Changes in treatment protocols
Limited availability of generic alternatives
Minimal oversight of PBM (pharmacy benefit manager) contracts
Many employers are shocked to find they’re absorbing unnecessary costs due to spread pricing, opaque rebate arrangements, or restrictive formularies. These hidden expenses often fly under the radar until renewal negotiations or budget shortfalls hit.
Why Employee Education Isn’t Optional
Even the best pharmacy benefit strategy can fall short if employees don’t know how to use it.
From tiered formularies to copay assistance, most members aren’t equipped to navigate the system. Poor medication literacy leads to underused benefits, increased non-adherence, and unnecessary claims. One study found that nearly 50% of patients don’t take medications as prescribed, often due to cost confusion or limited understanding.
Take advantage of Health Literacy Month to improve engagement with your pharmacy benefits.
Questions to ask:
Are employees aware of the cost difference between retail and mail-order?
Do they know how to access prior authorization support or appeal a denial?
Can they find and use copay assistance programs?
What to do now:
Audit and refresh your employee pharmacy education materials. Use open enrollment communications to drive awareness and improve access to support tools.
Compliance Considerations You Might Be Missing
Pharmacy benefit strategy isn’t just a finance or HR issue, it has real compliance implications.
Examples include:
Carving out high-cost drugs may impact ACA minimum value calculations
Employer-funded copay assistance could count as taxable income if not structured properly
Navigating employee appeals or protected health info may trigger HIPAA requirements
These aren’t technical footnotes; they’re legal risks. HR and compliance leaders should be at the table early when pharmacy changes are discussed.
What to do now:
Assess the compliance impact of any plan design changes before open enrollment materials go live. Ensure legal counsel and benefits advisors are aligned.
The Power of an Aligned Pharmacy Benefit Strategy
It’s not enough to offer pharmacy coverage; plans need to be equitable, sustainable, and clearly communicated.
When pharmacy strategy is aligned:
Employees feel supported and informed
Employers can control spend without sacrificing care
Compliance risks are flagged and addressed early
At BSP, we help clients take a proactive, data-driven approach to pharmacy planning. We identify cost drivers, evaluate PBM performance, and help tailor benefit design to both financial goals and workforce needs.
What to do now:
Conduct a mid-year pharmacy plan review with your broker or advisor. Use the findings to guide open enrollment decisions.
Final Thought: Pharmacy Is a Front-Line Priority
Prescription drug costs are no longer a side issue, they are central to your overall benefit strategy. With open enrollment around the corner, HR and compliance teams need a clear, coordinated plan.
A strong pharmacy strategy protects your budget, improves the employee experience, and helps ensure your benefits program is doing what it’s supposed to do: help people.
Summary Checklist
Before launching open enrollment:
Review PBM contracts for transparency and performance
Audit employee communication on pharmacy benefits
Assess compliance impact of proposed plan changes
Align HR, legal, and broker teams around a unified strategy
BSP works with clients every day to bring visibility and strategy to rising pharmacy costs, helping HR teams stay ahead of open enrollment and build benefit plans that actually work.