2026 MARKET TRENDS

Pharmacy

Key Takeaways

The high cost of drugs, especially weight-loss GLP-1 medications and other specialty drugs, will continue to be a primary driver of pharmacy trends
In response to rising costs from new therapies, employers are evolving benefit designs by increasing copays, implementing narrow networks, and using value-based formularies
Ongoing state and federal regulatory activity is reshaping drug pricing, transparency requirements and Pharmacy Benefit Manager (PBM) business models

AI is enhancing formulary management, fraud detection and patient support.

Overview

Pharmacy trends in 2026 will be shaped by continued high drug costs, especially for plans covering weight-loss GLP-1 medications, as well as specialty drug growth and increased biosimilar availability. GLP-1 therapies and other high-cost drugs will remain major contributors to the trend, while state and federal regulatory activity continues to reshape drug pricing, transparency requirements and Pharmacy Benefit Manager (PBM) business models. Employers are also evolving benefit designs in response to rising costs, with many considering increases to copays and cost-sharing and placing greater emphasis on predictive analytics, narrow networks and value-based formularies to strengthen financial and clinical performance.

Technology and clinical innovation are also influencing utilization and cost patterns. AI is enhancing formulary management, fraud detection and patient support. Remote monitoring, genomic-informed prescribing, robotics and personalized medicine are becoming more prevalent and may influence prescribing behavior and treatment selection. Digital therapeutics continue to expand, increasing demand for data-driven chronic condition support. GLP-1 medications remain a dominant force due to expanding indications, rising costs and complex coverage decisions, with impact expected to intensify as the pipeline grows and new formulations enter the market.

Primary Driver of Pharmacy Costs: GLP-1 Medications

GLP-1 medications remain one of the fastest-growing cost drivers in pharmacy benefits. The FDA pipeline continues to expand across multiple disease states, and demand is expected to increase beyond weight loss. These developments add pressure on plan sponsors to balance access, affordability and long-term sustainability.

The Brown & Brown Employer Health and Benefits Strategy Survey shows that 48% of employers cover GLP-1s for weight loss, including 42% in the mid-market and 61% in the large market. PharmaLogic®* 2025 data shows that diabetes GLP-1 drugs account for about 10% of total gross pharmacy costs, with plans covering weight-loss indications seeing an additional 10–15% impact. Utilization and cost vary by population demographics, diabetes prevalence and other drivers. As more indications gain FDA approval, demand and spending are expected to rise. Direct-to-consumer options and TrumpRx pricing negotiations may improve transparency and lower net prices, although results will vary by plan.

Actions to Consider

Define coverage criteria for weight loss, including body mass index (BMI) thresholds and comorbidities, and align disease and nutritional management programs to support outcomes
Apply prior authorization, step therapy or clinical criteria to guide appropriate use and update PBM requirements as new FDA indications are approved
Evaluate alternative funding models such as carve-outs, direct-to-consumer options or adjunct PBM programs and review contracts and rebate terms for financial impact
Offer clear resources on lifestyle interventions and communicate GLP-1 eligibility requirements to members

Use and spending on GLP-1 medications now dominates many plans. Oral options and expanded indications will increase the need for tight utilization controls and support for appropriate prescribing and adherence.

Learn more about GLP-1 use and conditions

New Drugs Reshaping Utilization, Cost and Benefit Strategies

Innovation across therapeutic categories continues to accelerate. In 2025, the FDA approved 54 new drugs and biologics, and four new gene and cell therapies. Rare disease treatments are advancing, offering clinical promise but also adding financial pressure. Specialty medications represented roughly 70% of new drug approvals in 2024, and more than half of 2025 approvals fall into this category, with about one-third targeting cancer. Additional applications remain under review, reinforcing specialty trend growth.

Biosimilar approvals and launches are increasing, with anti-inflammatory biosimilars having a particularly significant impact in 2025. PharmaLogic® 2025 year-to-date data show that anti-inflammatory drugs account for 24% of gross pharmacy benefit costs, driven largely by high-cost biologics. More than 20 biosimilars for Humira® are now available, and most formularies will exclude Humira® in 2026 in favor of at least one biosimilar. At the same time, self-administered injectable drugs continue to expand. New injectables can replace or supplement intravenous drugs given in outpatient settings, potentially shifting cost from the medical benefit to the pharmacy benefit. Four new injectable products were introduced recently and may add cost and accelerate this shift.

The drug pipeline remains robust across new therapies and expanded indications. Oncology and high-cost specialty and injectable products are playing a central role in utilization and spend and increasing the likelihood of cost shifting between medical and pharmacy benefits.

Actions to Consider

Track new indications and approvals to inform budget planning and guide plan design
Confirm PBM prior authorization, step therapy and clinical criteria address newly approved products, and ensure timely updates as FDA indications expand
Conduct site-of-care analysis to identify where injectable therapies may shift from medical to pharmacy and where savings may be possible
Collaborate with medical carriers, PBMs and pharmacy consultants to evaluate injectable use and identify additional cost-saving opportunities

Federal and State Legislative Activity Reshaping Drug Costs and PBM Pricing

Legislative and regulatory scrutiny now centers on PBMs and reshapes drug pricing and pharmacy benefit structures. State and federal rules push PBMs away from opaque financial models toward transparent pricing. These rules eliminate spread pricing, require full rebate pass-through, limit steerage practices and change adjudication algorithms. These shifts affect plan and member costs, prompting employers to review PBM contracts and consider new pricing approaches. Per-member-per-month (PMPM) pricing, NADAC-based pricing, acquisition-based pricing and point-of-sale rebates are gaining momentum. The 2026 Brown & Brown Employer Health and Benefits Strategy

Survey shows that evaluating alternative PBM pricing models ranks as a top tactic for the next 12 to 24 months. Federal actions also shape the pharmacy landscape. The Most Favored Nation Executive Order, Medicare drug price negotiations under the Inflation Reduction Act, insulin caps for Medicare enrollees, drug import tariffs, updates to direct-to-consumer advertising guidance and proposed patent reforms all add to market volatility and drive long-term shifts in how pharmacy benefits operate.

States continue to expand oversight through laws targeting formulary limits, utilization management restrictions, pharmacy reimbursement rules, steerage limits and regulation of group purchasing organizations. New laws across several states add complex requirements that may raise prescription costs, limit plan design flexibility or raise ERISA preemption concerns.

Drug costs remain a key focus for policymakers. Regulatory efforts centered on PBMs may reduce plan sponsor flexibility, influence benefit design and, in some cases, increase costs for plans and members.

Actions to Consider

Review and audit PBM contracts to identify hidden fees, spread pricing and rebate structures affected by transparency rules and request clarity on financial models and transparency commitments
Strengthen compliance and governance by monitoring state legislation, preserving cost-control levers and meeting regularly with consulting and PBM teams to assess regulatory readiness
Leverage data analytics to model the financial impact of pricing structures and formulary strategies using claims and utilization data
Engage in strategic vendor negotiations to secure full rebate pass-through, audit rights and performance guarantees, with contract terms that support renegotiation as market conditions change
Educate stakeholders by communicating regulatory impacts, formulary updates and cost-sharing changes to HR, finance and employees

Biosimilars Are Expanding Access and Creating Cost-Saving Opportunities

Biosimilars are highly similar to FDA-approved biologic medications and must demonstrate no clinically meaningful differences in safety or efficacy. They offer opportunities for meaningful cost savings compared to reference brands, though adoption has been mixed due to PBM formulary preferences, rebate structures and patient or provider familiarity. Uptake has accelerated recently, driven by biosimilars for Humira® and Stelara®. According to the 2026 Brown & Brown Employer Health and Benefits Strategy Survey, 22% of employers cite biosimilar coverage and costs as a top pharmacy benefit concern.

The biosimilar market and pipeline continue to grow. Since 2015, the FDA has approved 80 biosimilars across 19 biologic medications, with 58 launched. Approvals in 2025 included biosimilars to Stelara®, Prolia®, Xgeva®, Tysabri® and Soliris®. Anticipated 2026 launches include biosimilars for Xolair®, Eylea®, Simponi® and Orencia®. Regulatory changes, including draft FDA guidance issued in October 2025, aim to streamline requirements for interchangeability designations and reduce unnecessary clinical testing, to help lower development costs and accelerate time to market. Over the next three to five years, additional biosimilars to major reference products such as Entyvio®, Cosentyx®, Opdivo® and Keytruda® are expected.

The biosimilar pipeline remains strong and offers significant cost-saving potential, but effective plan design, PBM strategy alignment and attention to both pharmacy and medical benefit dynamics are critical to capturing these savings.

Actions to Consider

Review pricing and rebate dynamics for biosimilars, request transparency on preferred products, rebate guarantees and expected formulary changes and monitor quarterly reports for adoption and savings
Prioritize biosimilars for new-to-therapy patients to minimize disruption, and communicate any switching strategies clearly to limit member abrasion
Review biosimilar coverage on the medical benefit, where visibility may be limited, and layer in site-of-care and channel management strategies for additional savings

Section Source: All stats attributable to Brown & Brown. Employer Health and Benefits Strategy Survey, 2026.

*PharmaLogic® is Brown & Brown’s proprietary pharmacy data analytics platform that provides intelligent clinical analytics that positively impact individual medication access and improve overall population health.

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