Specialty Drugs Are Half Your Pharmacy Spend: 5 Ways Self-Funded Plans Manage Them

Why specialty drugs dominate the budget

Specialty drugs treat complex conditions such as rheumatoid arthritis, psoriasis, Crohn's disease, multiple sclerosis, HIV, and cancer. They are often biologics, require special handling or monitoring, and can cost thousands of dollars per month. Industry analyses consistently find that specialty drugs account for more than half of employer pharmacy spending while representing fewer than 5% of prescriptions. source

That concentration changes how a self-funded plan should think about pharmacy. A few dozen members on high-cost therapies can drive more spend than everyone else combined, and one new member on a cell or gene therapy can move the whole year. Managing specialty is not a side project. For most plans, it is the pharmacy strategy.

Picture a benefits director at a 3,000-employee manufacturer opening the quarterly pharmacy report. Generic fills are up, which looks like good news. Then she scrolls to the bottom and sees that eleven members account for more than half of the quarter's drug spend. Nobody did anything wrong. Two employees started new biologics for psoriasis, a spouse began an oral cancer therapy, and one teenager on the plan started an infused drug at the local hospital. That's what specialty looks like in a real plan: a handful of people, each with a good clinical reason, adding up to the biggest line on the report.

The numbers

Sources: PSG MHE UHG. Benchmarks come from different data sets and are shown for context, not as a single calculation.

One detail stands out: in 2025, specialty trend was higher after rebates than before them. source Rebates aren't keeping pace with specialty growth, so a plan that relies on rebate guarantees to manage specialty is falling behind.

1. See both benefits as one budget

Self-administered specialty drugs (most injectables and oral cancer drugs) usually run through the PBM. Infused and provider-administered drugs often run through the medical plan, billed by hospitals and clinics. Many plans only look at the PBM side, which can miss a large share of specialty spend.

Start by building one view of specialty spend by drug, across both benefits:

• Pharmacy claims: drug, quantity, days supply, plan paid, member paid, dispensing pharmacy.
• Medical claims: drug billing codes (J-codes), units, site of care, and allowed amount per unit.
• Overlap: drugs that appear in both, where you can compare what each benefit pays for the same therapy.

2. Fix site of care

Where an infusion happens can matter as much as which drug is used. An Employee Benefit Research Institute analysis published in September 2026 found employer plans paid hospital outpatient departments 102% more on average than physician offices for the same injected or infused drugs. source Hospitals were paid more for 93 of the 106 drugs studied, the median difference was about $5,531 per patient per year, and about 59% of administrations happened in hospital outpatient settings.

EBRI estimated that paying office rates instead would save employer plans about $12.7 billion a year, or roughly $101 per covered member. source Practical steps include steering eligible members to physician offices, ambulatory infusion centers, or home infusion when clinically appropriate, and setting plan rules that require clinical justification for hospital-based infusion of drugs that can safely be given elsewhere.

3. Adopt biosimilars

Biosimilars are now a mainstream savings lever. PSG reports biosimilar share across eligible products rose from 22.6% in 2023 to 56.3% in 2025, Humira biosimilars reached 82.4% share, and Stelara biosimilars reached 18% in their first year. source

But "your PBM covers biosimilars" isn't the same as "your plan pays biosimilar prices." Ask which product is preferred, what the plan actually pays per claim, whether the brand is still covered at the same tier, and whether rebates on the brand are steering decisions. We cover this in depth in Biosimilars: Is Your Plan Still Paying Brand Prices?

4. Scrutinize the specialty pharmacy channel

Most PBM contracts require specialty drugs to be filled at the PBM's own specialty pharmacy. That isn't automatically bad, but it means the PBM sets both the network and the price. Things to check:

• Specialty pricing guarantees: are they measured per drug or as an average across a list, and which drugs are excluded?
• Limited-distribution drugs: how are drugs the PBM's pharmacy can't dispense priced and reported?
• Waste: are first fills for new oral cancer drugs dispensed in partial quantities (split fills) so you don't pay for a full month a member may not tolerate?
• Manufacturer copay assistance: how do accumulator or maximizer programs work on your plan, and who keeps the value?

5. Manage clinically, not just financially

The most durable specialty savings come from making sure each member is on the right drug, at the right dose, for the right length of time. That includes prior authorization based on clinical criteria, step therapy where evidence supports it, dose optimization, and periodic reviews of whether a therapy is still working. Done well, this protects members as much as budgets.

It also means aligning with stop-loss. Large specialty claims often hit specific stop-loss limits, so plan design changes and carrier contracts should be reviewed together.

What this looks like for a 10,000-member plan

Applying the 2025 benchmarks to a hypothetical 10,000-member commercial plan shows why specialty deserves its own strategy:

Illustrative only. Benchmarks come from different data sets; your plan's numbers depend on its members, benefit design, and contracts.

In other words, a plan this size can expect specialty costs to grow by more than a million dollars a year if nothing changes, and site of care alone may offset a large share of that. The rest has to come from biosimilars, channel pricing, and clinical management.

Questions to ask your PBM and medical carrier

1. What did our plan spend on specialty drugs last year, by drug, across both pharmacy and medical claims?
2. Which of our top specialty drugs were administered in hospital outpatient departments, and what would they cost in a physician office or at home?
3. Which biologics on our plan have biosimilars, which version is preferred, and what is our net cost per claim for each?
4. How are specialty pricing guarantees measured, and which drugs are excluded from them?
5. Are we required to use your specialty pharmacy, and how are limited-distribution drugs priced and reported?
6. Do you split-fill new oral oncology prescriptions, and how much did we spend on drugs that were discontinued in the first month?
7. How do manufacturer copay assistance programs interact with our plan design, and who receives the value?
8. Which clinical programs (prior authorization, dose optimization, adherence) apply to our specialty spend, and what results can you show?

Common mistakes

• Judging specialty by rebates. Rebate totals can rise while net cost rises faster. In 2025, specialty trend was higher after rebates than before. source
• Managing only the PBM side. Infused drugs billed through the medical plan often carry the biggest price differences.
• Assuming biosimilars are automatic. Formulary inclusion isn't the same as paying a biosimilar price.
• Changing plan design without clinical input. Specialty members are often managing serious conditions. Changes need clinical review, clear communication, and exceptions.
• Ignoring stop-loss. Plan changes can affect how large claims are reimbursed.

Specialty drug checklist for self-funded plans

1. Build one specialty view across pharmacy and medical claims, by drug and by member count.
2. Rank your top 20 specialty drugs by total plan cost, and note which benefit pays for each.
3. Map site of care for every infused drug, and flag hospital outpatient claims with lower-cost alternatives.
4. Check biosimilar status for every eligible molecule: preferred product, plan cost per claim, and brand coverage.
5. Review specialty guarantees and exclusions in your PBM contract.
6. Ask about split fills for new oral oncology starts.
7. Understand copay assistance programs and how they affect member costs and plan spend.
8. Coordinate with stop-loss before changing specialty plan design.

Frequently asked questions