Question 1

What is the average pharmacy cost per employee per year for self-funded plans?

Accepted Answer

For 2025, median pharmacy cost per employee per year (PEPY) for self-funded employers is approximately $1,700–$2,200, representing 15–20% of total healthcare costs. Specialty drugs (biologics, oncology, rare disease) account for 50–55% of total drug spend despite being only 1–2% of prescriptions. GLP-1 receptor agonists (Ozempic, Wegovy, Mounjaro) have become the fastest-growing cost driver, adding $200–$500 PEPY for employers with significant GLP-1 utilization.

Question 2

What is a good PBM rebate rate benchmark?

Accepted Answer

Rebate rates vary significantly by drug mix, formulary design, and PBM contract terms. For traditional PBMs with pass-through contracts, median rebates are $150–$250 per member per year (PMPY). Specialty drug rebates are typically 20–40% of WAC (wholesale acquisition cost) for biologics. Employers with transparent PBMs receive 100% of rebates; employers with traditional PBMs may receive only 70–85% of rebates (the PBM retains 15–30%). Conduct a rebate audit to verify your actual rebate pass-through rate.

Question 3

What is specialty drug penetration and why does it matter?

Accepted Answer

Specialty drug penetration is the percentage of total drug spend attributable to specialty drugs (biologics, oncology agents, rare disease treatments). For most employer plans, specialty penetration is 50–55% of total drug spend. High specialty penetration (above 60%) indicates a plan with significant chronic disease burden or high-cost conditions. Managing specialty drug costs through specialty pharmacy carve-out, site-of-care optimization, and biosimilar adoption is the highest-ROI pharmacy cost-containment strategy.

Question 4

What are GLP-1 cost benchmarks for employer health plans?

Accepted Answer

GLP-1 receptor agonists (semaglutide, tirzepatide) have become the fastest-growing pharmacy cost driver. Average annual cost per GLP-1 user is $12,000–$18,000 at list price. With rebates and PBM discounts, net cost is typically $8,000–$14,000 per user per year. Employers with 5% GLP-1 utilization among eligible employees see pharmacy cost increases of $400–$700 PEPY. Most employers are implementing prior authorization, clinical criteria, and lifestyle support programs to manage GLP-1 costs.

Question 5

How do I benchmark my PBM performance against market standards?

Accepted Answer

Key PBM performance benchmarks: generic dispensing rate (target 85–90%+), specialty generic/biosimilar substitution rate (target 30–50%+ where available), mail order utilization for maintenance medications (target 25–35%), rebate pass-through rate (target 100% with transparent PBM), and administrative cost per claim (target $0.50–$1.50 for generic, $2–$5 for brand). Request a PBM performance report from your TPA or consultant comparing your plan against these benchmarks.

Pharmacy Benefit Benchmarks

Key benchmark figures

Data sources

Drug Benefit Report

Pharmacy Benefit Management Industry Report

Health Plan Cost Trend Survey

Specialty Drug Trend Report

GLP-1 Employer Impact Report

National Survey of Employer-Sponsored Health Plans

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