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, MS, and diabetes, make up just 2% of all prescriptions but account for half of all pharmacy spending. In 2023, the average monthly cost for one of these drugs was over $1,000. For employers, that’s $34.50 per employee, per month-adding up to millions across a large workforce. If you’re paying for these drugs, either as an employer, insurer, or patient, you’re not alone in struggling with the price tag. The good news? There are proven, real-world ways to cut those costs without sacrificing care.
Use Formulary Management to Stop Unnecessary Spending
Formulary management isn’t just a buzzword-it’s a tool that actually saves money. It means setting rules for which drugs are covered, and under what conditions. For example, before a patient can get a $12,000-a-month biologic for rheumatoid arthritis, they might need to try a cheaper generic first. This is called step therapy. Or, they might need prior authorization-a doctor’s note confirming the drug is truly needed.Excellus BlueCross BlueShield used this approach with GLP-1 weight loss drugs and saved $13.64 per member per month. That’s not pocket change-it’s over $160,000 saved annually for a 10,000-member plan. The key? Making sure the rules are based on clinical evidence, not just cost. When done right, prior authorization reduces waste without blocking access. A 2023 study found that 98% of specialty drug requests were still approved after implementing strict protocols. Patients didn’t lose access. But the unnecessary, high-cost prescriptions dropped.
Narrow Your Pharmacy Network to Save 10-15%
Not all pharmacies are created equal when it comes to specialty drugs. Most employers let patients use any pharmacy they want. That’s a mistake. Specialty drugs are complex. They need cold storage, trained staff, and ongoing patient support. Only a few pharmacies do this well-and they’re willing to give better prices if you give them all the business.By limiting your plan to a small network of specialty pharmacies like CVS Specialty or Express Scripts, you can cut costs by 10-15%. CarelonRx found that exclusive networks reduced contractual rates because those pharmacies compete for volume. One employer saved $35 million a year across 200 plans just by switching to a narrow network. Patients didn’t complain about the change. In fact, satisfaction went up because they got better support: nurses calling to check in, delivery with ice packs, refill reminders. The trade-off? You’re giving up choice. But most patients don’t care where they get their drug-as long as it arrives on time and they don’t have to pay more.
Switch to Biosimilars-They’re 50% Cheaper
Biosimilars are the knockoff versions of biologic drugs. They’re not generics-because biologics are made from living cells, not chemicals. But they’re nearly identical in how they work, and they’ve been approved by the FDA as safe and effective. The big difference? Price. Biosimilars cost about half as much as the original brand-name drug.Take Humira, the top-selling drug in the U.S. for years. Its biosimilar, Amjevita, hit the market in 2023 and cost 50% less. Hospitals that switched over saw 20-30% savings on their biologic budgets. The FDA has approved 42 biosimilars as of late 2023, and more are coming. Yet adoption is still below 30% in most areas. Why? Doctors are cautious. Patients are nervous. Pharmacies don’t push them. But that’s changing. In 2026, CMS is testing a new rule: grouping biosimilars and brand-name biologics under the same Medicare Part B reimbursement code. That means doctors won’t get paid more for prescribing the expensive version. The result? They’ll pick the cheaper one. And employers should do the same. Start by asking your PBM: “Which of our top 10 specialty drugs have biosimilars available?” Then switch.
Move Injections from Hospitals to Home or Clinics
If your drug is given as an infusion-like in a hospital outpatient department-you’re paying a premium. Hospitals charge $500-$1,500 just to administer the drug, even if the drug itself costs $2,000. But that same drug, given in a doctor’s office or at home, costs 40-50% less. And it’s just as safe.Quantum Health analyzed 220 specialty drugs and found that 63% of the total spending came from infusions that didn’t need to happen in a hospital. When they moved those to medical offices or home care, they saved 48% per case. That’s not theory-it’s real savings. One employer cut their infusion costs by $1.2 million in one year by shifting patients to home infusion services. The trick? You need to coordinate. Make sure the patient has the right equipment, training, and support. But that’s doable. Many specialty pharmacies now offer home delivery with nursing support. Ask your provider: “Can this drug be safely given outside the hospital?” If yes, push for the change.
Use Value-Based Contracts to Tie Price to Results
What if the drug didn’t work? Should you still pay full price? Value-based contracts say no. These are agreements between insurers and drugmakers where the manufacturer refunds part of the cost if the drug doesn’t help. For example, if a cancer drug doesn’t shrink the tumor by 30% in six months, the company pays back 50% of the cost.Prime Therapeutics reported a 45% increase in value-based contracts for specialty drugs in 2023. These aren’t common yet, but they’re growing fast. The catch? They require data. You need to track outcomes. But for high-cost drugs, that’s worth it. A drug that costs $200,000 a year but only works for 40% of patients is a waste. A value-based contract turns that into a performance-based deal. Start with your top three most expensive drugs. Talk to your PBM. Ask: “Can we negotiate a rebate if the drug doesn’t meet clinical goals?” If they say no, shop around. Some PBMs specialize in this.
Maximize Financial Assistance Programs-Without Harming Your Budget
Manufacturers offer copay cards to help patients pay for expensive drugs. Sounds great, right? But here’s the hidden cost: those cards often count as patient spending toward their deductible. That means if you’re on a high-deductible plan, you’re paying more out of pocket than you think. Worse-your employer’s plan pays more because the drug’s cost isn’t being reduced.Enter the copay maximizer. This is a program that lets the manufacturer cover the full copay, but the plan treats it as if the patient paid it themselves. So the patient’s out-of-pocket cost stays at $0, but the drug’s price doesn’t count toward the deductible. That keeps your plan’s costs down. CarelonRx found that this approach saved employers 5-8% annually on specialty drug spending. And patients were happier-they didn’t pay anything. The key? Make sure your PBM offers this. Not all do. Ask: “Do you have a copay maximizer program for specialty drugs?” If not, demand it.
Combine Strategies-No Single Fix Works Alone
You can’t just pick one trick and call it a day. The experts agree: the best results come from combining multiple strategies. Use formulary rules to stop waste. Switch to biosimilars where possible. Move infusions out of hospitals. Use value-based contracts for your top three drugs. Maximize copay assistance. Build a narrow pharmacy network. Do all of these together, and you can cut specialty drug spending growth from 10-12% per year to just 5-7%.One large employer in Florida did exactly that. They saved $4.2 million in one year on a 50,000-member plan. Their savings came from: $1.8 million from biosimilars, $1.2 million from moving infusions to clinics, $700,000 from narrow pharmacy networks, and $500,000 from copay maximizers. They didn’t cut care. They cut waste. And their employees reported better service and lower out-of-pocket costs.
What to Do Next: A Simple 6-Step Plan
If you’re managing health benefits or paying for these drugs yourself, here’s your action plan:- Identify your top 5 most expensive specialty drugs. Ask your PBM for a report.
- Check if any have FDA-approved biosimilars. If yes, switch.
- Ask if your plan uses a narrow specialty pharmacy network. If not, demand it.
- Review all infusion drugs. Can any be given at home or in a clinic? Push for it.
- Ask your PBM: “Do you offer copay maximizers?” If not, switch providers.
- Start negotiating value-based contracts on your top 3 drugs.
These steps don’t require a big budget. They require knowledge and persistence. The savings are real. The system is rigged to keep prices high-but you don’t have to accept it.
Are biosimilars as safe as brand-name biologics?
Yes. The FDA requires biosimilars to show they’re highly similar to the original drug in structure, function, and safety. They go through the same rigorous testing as new drugs. Over 40 biosimilars have been approved since 2015, and studies show no meaningful difference in outcomes. Patients using biosimilars report the same side effects and effectiveness as those using the brand name.
Why don’t more doctors prescribe biosimilars?
Many doctors aren’t trained on biosimilars or worry patients will refuse them. Some still believe they’re “inferior,” even though evidence says otherwise. Drugmakers also spend millions marketing the original brand. But as more data comes out and CMS changes reimbursement rules, doctors are starting to switch. In 2026, expect biosimilar adoption to jump to 50% or higher.
Can I switch my specialty drug to a cheaper option on my own?
You can ask-but you need your doctor’s approval. Specialty drugs aren’t like over-the-counter meds. Switching without medical supervision can be dangerous. Talk to your doctor about cost. Say: “I’m struggling to afford this. Are there cheaper alternatives that work just as well?” If your doctor says no, ask for a second opinion. Many specialty clinics offer free cost-reduction consultations.
Do these strategies work for Medicare patients?
Yes, but differently. Medicare Part B covers many injectables given in clinics, and Part D covers self-administered drugs. The Inflation Reduction Act now lets Medicare negotiate prices for some high-cost drugs starting in 2026. That will lower costs for seniors. But private plans can still use all the strategies listed here-narrow networks, biosimilars, value-based contracts-even for Medicare Advantage members.
What if my insurance won’t cover a cheaper alternative?
Appeal. Every plan has a formal appeals process. Write a letter from your doctor explaining why the cheaper drug should be covered. Include clinical guidelines. If you’re denied, ask for a peer-to-peer review-where your doctor talks directly to the insurer’s medical director. Many denials are overturned at this stage. Don’t give up. The average approval rate for appeals is over 50%.
Written by Guy Boertje
View all posts by: Guy Boertje