How to Reduce Costs for Specialty Medications and Injectables
Jan, 17 2026
Specialty medications and injectables are changing how we treat chronic diseases - but they’re also breaking the bank. These drugs, used for conditions like cancer, rheumatoid arthritis, and multiple sclerosis, make up just 2% of all prescriptions but account for half of all pharmacy spending. A single month’s supply can cost over $1,000. For employers, that’s an average of $34.50 per employee each month - and it’s only getting worse. With spending projected to hit $350 billion by 2027, cutting these costs isn’t optional. It’s urgent.
Start with Formulary Management
One of the most effective ways to control spending is by managing which drugs are covered and under what conditions. This means using formularies - lists of approved medications - to steer patients toward lower-cost, clinically appropriate options. Prior authorization, step therapy, and quantity limits aren’t red tape; they’re tools. For example, Excellus BlueCross BlueShield used prior authorization rules for GLP-1 weight loss drugs and saved $13.64 per member per month compared to national pharmacy benefit managers. That’s not a small number. It adds up fast across thousands of employees. But here’s the catch: if these rules are too strict, patients delay or skip treatment. The key is balance. Use clinical guidelines, not just cost. Involve pharmacists and physicians in the decision-making. A well-run Pharmacy and Therapeutics committee can reduce waste without hurting outcomes.Narrow Your Pharmacy Network
Not all specialty pharmacies are created equal. Some charge more, provide worse support, and have slower turnaround times. By limiting your plan to a small group of high-performing specialty pharmacies, you can cut costs by 10-15%. CarelonRx found that exclusive networks led to lower contract rates and better patient outcomes. One hospital system saved $1.3 billion over three years by switching to a preferred CVS specialty pharmacy network. Why? These networks negotiate bulk pricing, offer dedicated patient coordinators, and track adherence in real time. Patients get faster access to meds, fewer errors, and 24/7 support - all while the plan pays less. The downside? Some members resist switching. Expect a spike in calls during the transition. Solve it with clear communication: send letters, host webinars, and train your HR team to answer questions. Most people will stay once they see the improved service.Switch to Biosimilars When Possible
Biosimilars are the generic version of biologic drugs - complex, injectable medications made from living cells. They’re not copies, but they work the same way. And they cost about half as much. The FDA has approved 42 biosimilars as of late 2023. Yet adoption remains below 30% in most categories. Why? Doctors are hesitant. Patients are wary. Insurance doesn’t always push them. Hospitals that ran structured biosimilar transition programs saw 20-30% cost reductions with no drop in effectiveness. Start by targeting the top 5-10 most expensive biologics in your plan. Work with your PBM to identify biosimilar alternatives. Educate prescribers with data: show them real-world outcomes from other clinics. Offer patient support programs to ease the switch. A patient who was on a $12,000 monthly drug might now pay $6,000 - with the same results.Move Injections Out of Hospitals
Did you know that 91% of specialty drug infusions that happen in hospital outpatient departments could safely be done in a doctor’s office or even at home? A Quantum Health study found that 220 specialty drugs - making up 63% of total spending - were being administered in the most expensive setting possible. Shifting those to a physician’s office or home infusion service cut costs by 48%. A $1,500 hospital infusion became a $780 clinic visit. That’s not magic. It’s basic economics. The trick? Make it easy. Partner with home infusion providers who offer nurse visits, training, and equipment delivery. Build a list of approved outpatient clinics with fair reimbursement rates. Train your staff to ask: “Does this need to be in a hospital?” More often than not, the answer is no.
Use Value-Based Contracts
What if a drug only cost you if it worked? That’s the idea behind value-based contracts. Instead of paying full price upfront, you tie payments to real-world outcomes. Prime Therapeutics reported a 45% year-over-year increase in these arrangements. For example, a cancer drug might come with a guarantee: if the patient doesn’t respond after three months, the manufacturer refunds part of the cost. Or a drug for multiple sclerosis might be priced based on how many relapses the patient has over a year. These contracts are harder to set up. They require data sharing, outcome tracking, and legal agreements. But they’re the future. They shift the risk from the plan to the drugmaker - and that’s where it should be.Maximize Copay Assistance Programs
Manufacturers often offer copay cards to help patients afford expensive drugs. Sounds good, right? But here’s the problem: those cards don’t count toward a patient’s deductible or out-of-pocket maximum. So the patient pays $0 now - but hits their deductible later, when they need other care. Employers using “copay maximizer” programs fix this. These programs replace manufacturer cards with a plan-funded subsidy that counts toward the patient’s out-of-pocket limit. The patient still pays $0 out of pocket - but now, they’re building toward their cap. And the employer saves because they’re not paying for a system that delays cost-sharing. CarelonRx found this approach reduced employer costs by 5-8% annually. It’s ethical, effective, and patient-friendly.Track Data - Relentlessly
You can’t manage what you don’t measure. The best cost-saving programs use real-time analytics to spot outliers early. Who’s getting the most expensive drugs? Are they being used correctly? Is there a pattern of overuse? Quantum Health says successful programs integrate with 3-5 electronic health record and pharmacy systems. That sounds technical, but it’s simple: get alerts when someone starts a $10,000 drug without prior authorization. Flag cases where a patient is on two similar drugs at once. Monitor adherence - if someone stops taking their drug after a month, they’re not saving money; they’re risking hospitalization. Start small. Pick one high-cost drug class. Track usage for six months. Adjust. Repeat.
What Doesn’t Work
Some ideas sound smart but fall flat. Capping monthly out-of-pocket costs, for example, makes patients feel better - but doesn’t lower overall spending. It just shifts the cost to the plan. Same with blanket bans on certain drugs. Patients get angry. Clinicians get frustrated. And the problem doesn’t go away. Also avoid switching plans every year. The administrative cost of changing PBM or pharmacy networks often eats up any savings. Stick with a partner for at least three years. Build trust. Refine the system.Real Results, Real People
One large employer with 50,000 employees implemented four strategies: narrow pharmacy network, biosimilar adoption, treatment setting shift, and copay maximizers. In 18 months, they cut specialty drug spending by 22%. That’s $2.4 million saved annually. Patient satisfaction went up. Adherence improved by 14%. No one lost access to care. This isn’t theoretical. It’s happening now.Where to Start
You don’t need to fix everything at once. Pick one area:- If your biggest issue is high drug prices → push for biosimilars.
- If patients are stuck in hospitals for infusions → launch a home infusion program.
- If your PBM isn’t negotiating hard → switch to a network with better contracts.
- If prior authorizations are a mess → hire a dedicated pharmacist to manage them.
Are biosimilars as safe as the original biologic drugs?
Yes. The FDA requires biosimilars to show no clinically meaningful differences in safety, purity, or potency compared to the original biologic. Thousands of patients have used them for years with the same outcomes. In fact, many hospitals now switch new patients to biosimilars by default because they’re just as effective - and half the price.
Why are specialty drugs so expensive?
They’re complex to make, often requiring living cells and strict temperature controls. Development costs are high, and manufacturers have little competition. Many are protected by patents for over a decade. Plus, there’s no universal pricing system - drugmakers set prices based on what the market will bear, not production cost.
Can patients still get their preferred medication if I use a narrow pharmacy network?
Yes, but with conditions. Most networks allow exceptions for medical necessity. If a patient has tried other options and failed, or has an allergy, they can still get the original drug. The goal isn’t to deny care - it’s to encourage smarter, more cost-effective choices first. Clear policies and transparent appeals processes keep patients and providers satisfied.
How long does it take to see savings from these strategies?
Some savings show up in 3-6 months - like shifting infusions to clinics or switching to biosimilars. Others, like formulary changes or value-based contracts, take 12-18 months to fully roll out. Most organizations see a return on investment within 12-18 months. The key is starting early and measuring progress monthly.
What’s the biggest mistake employers make when trying to cut specialty drug costs?
Trying to save money by making it harder for patients to get their meds. Denying access, delaying approvals, or pushing patients to cheaper drugs without clinical support backfires. Patients stop taking their meds. They end up in the ER. Costs go up. The smartest savings come from supporting better care - not restricting it.