Employer-sponsored health benefits are approaching a breaking point. According to a new study conducted by J. Price McNamara, prescription drug costs are rising so rapidly that they now outpace nearly every other driver of employer health spending. With premiums rising more than 7% in 2025 alone and prescription drug costs climbing another 6% in 2025 after an 8% jump in 2024, employers are left with no choice but to restructure benefits, increase employee cost-sharing, and reconsider what health plans look like heading into 2026.
Premiums Outpacing Paychecks
The widening gap between healthcare costs and wages tells the story of financial strain:
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Family Coverage Costs: $25,572 in 2024 → $27,362 in 2025 (+7%).
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Wage Growth: Only 4.5% in 2025, far behind premiums.
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Inflation: 3.2%, also trailing premium hikes.
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Employee Burden: Worker contributions averaged $6,296 in 2024 and are expected to top $6,600 by the end of 2025.
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Deductibles: Single coverage deductibles hit $1,787 in 2024, nearly 50% higher than a decade ago.
That means the typical U.S. worker is paying more for less coverage — a dangerous trend as household budgets tighten under rising housing, food, and childcare costs.
Prescription Drugs: The Fastest-Growing Cost Driver
Prescription drug spending has become the flashpoint of employer healthcare budgets.
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+8% in 2024
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+5.8–6% in 2025
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Expected to continue above 5% growth into 2026
This marks three consecutive years of above-trend increases.
GLP-1 Medications at the Center
Drugs like Ozempic, Wegovy, and Mounjaro — designed for diabetes and obesity — now exceed $1,000 per patient per month. Demand is surging, fueled by weight-loss marketing and expanded eligibility. Analysts predict the GLP-1 market will top $100 billion annually by 2030, creating immense financial exposure for employer health plans.
Specialty Drugs and Catastrophic Risks
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Oncology & Autoimmune Treatments: Account for over 50% of all Rx spending.
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Gene & Cell Therapies: One-time treatments can run $1–3 million per patient. For self-insured employers, a single claim could destabilize budgets.
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Employer Concerns: Over 70% of benefit executives say gene therapy drugs will be a major financial challenge by 2027.
Without structural reform, employers may be forced to exclude or severely limit coverage for breakthrough therapies.
Cost-Shifting Is Back
The labor market slowdown has given employers permission to revisit aggressive cost-shifting.
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51% of large employers will redesign plans in 2026, up from 45% in 2025.
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Expect higher deductibles, copays, and out-of-pocket maximums.
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Popular strategies include variable copays tied to provider cost and level-funded self-insured plans, which blend predictable premiums with risk protections.
For employees, this translates into fewer choices and higher out-of-pocket costs — a trend not seen since the post–Great Recession years.
Telehealth: Cost Control Meets Access
The one bright spot? Telehealth.
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68% of telehealth claims in 2024 were mental health related.
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U.S. hospitals expect 20% of care delivered virtually by 2025, up from just 9% in 2023.
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20% of employers offered high-performance telehealth networks in 2024, with adoption projected to surge in 2026.
Telehealth saves employers 11–20% in total costs compared to traditional care, while expanding access for part-time, hourly, and remote workers.
The Mental Health Gap
Mental health remains the Achilles’ heel of employer coverage.
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57.8 million Americans experience mental health challenges yearly.
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36% report barriers accessing benefits due to provider shortages.
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75% of employers plan to roll out new digital programs by 2026, but engagement remains low (30%).
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Federal funding cuts of $1.3 billion in 2026 could worsen the shortage.
Employee retention is at stake: 74% of workers say they’d stay in a job if benefits were better personalized to their needs.
Policy Spotlight: PBMs Under Fire
Pharmacy Benefit Managers (PBMs) face a regulatory shake-up.
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By 2026, PBMs will have to pass rebates directly to employer plans.
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Full transparency on fees and compensation will become mandatory.
The reforms could help employers claw back savings, but it remains unclear how quickly changes will reach employees.
Conclusion: The Rx Shockwave Ahead
The study by J. Price McNamara shows that prescription drug costs are not just a budget line item — they’re reshaping the very structure of employer health benefits. With employers preparing to cost-shift more than ever in 2026, workers face higher premiums, higher deductibles, and narrower networks.
Unless systemic reforms accelerate, the U.S. may be entering an era where life-saving therapies are available in theory but financially out of reach in practice. Employers that innovate with telehealth, high-performance networks, and flexible benefits may survive the storm — but for millions of employees, the prescription drug shockwave is already here.
