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GLP-1s and Biosimilars Reshape Prescription Drug Market

Dev Team on February 15, 2025

GLP-1s and Biosimilars Reshape Prescription Drug Market

Inflation, additional treatment options approved by the U.S. Food and Drug Administration (FDA) and increased utilization of high-cost medications led to rising drug costs in 2024. In 2025, the transformation of the prescription drug market will continue due to many of the same factors, as well as changes to Medicare Part D and the potential for pharmacy benefit manager (PBM) reform.

The following are some of the most significant trends that are reshaping the prescription drug market.

GLP-1 Drug

GLP-1 drugs have gained rapid popularity from plan participants eager to lose weight and improve their overall health. Mounjaro (which has the active ingredient tirzepatide), Ozempic and Rybelsus (which both use the active ingredient semaglutide) are approved for treating diabetes but are commonly prescribed off-label for weight loss. Zepbound (tirzepatide) and Wegovy (semaglutide) are drugs that use the same active ingredients but are approved to treat obesity for qualifying patients. In addition to treating Type 2 diabetes and obesity, the

active ingredients in these medications have shown the potential for treating other conditions, including Alzheimer’s disease, heart disease and sleep apnea.

While most health care plans cover GLP-1s for qualifying Type 2 diabetes patients, employers are much more hesitant to cover them for weight loss. The high cost of these medications—combined with the need for ongoing, long-term usage—presents a significant financial commitment that some employers are unwilling to make.

The popularity of these drugs is likely to increase in 2025 as more patients become aware of GLP-1s and take action to improve their health.

Biosimilars

Biosimilars are an emerging category of biological medications. These treatments are similar to a reference drug, which is an existing biologic that was previously approved by the FDA. For a biosimilar to be approved, there must be no meaningful differences in safety and effectiveness from the original biologic. Compared with original biologics, biosimilars are lower-cost, allowing greater patient access. New biosimilars are gaining FDA approval and entering the market each year. As of 2024, over 60 biosimilars have been approved. Biosimilars have the potential to help reduce costs in a prescription drug market that is otherwise experiencing significant inflationary pressure.

However, the widespread adoption of biosimilars in the drug market has had its share of challenges related to drug exclusivity rights, active patents, approval processes and inconsistent success rates for developing biosimilars.

Cell and Gene Therapies (CGT)

Advanced treatments, such as CGT, are designed to treat conditions like blood and lung cancer, sickle cell anemia and spinal muscular atrophy. These therapies demonstrate significant medical advancement but come with a high price tag.

CGT operates uniquely compared to other treatments. CGT is generally administered once or twice over a patient’s lifetime. With CGT, payment occurs upfront, and the patient experiences health benefits over time. Some insurance and pharmaceutical companies may offer nontraditional payment models, such as risk-sharing arrangements, performance-based payments that are determined by the effectiveness of the treatment, and other installation models that spread out the cost of the treatment.

The FDA has approved around 40 CGT products. The agency is expected to approve between 10 and 20 treatments in 2025, and hundreds more are currently in clinical trials and could become available in the coming years. With more individuals eligible each year for treatments like CGT, employers will need to make decisions about coverage and mitigating cost exposures.

Medicare Part D Changes

As a result of the Inflation Reduction Act, the Medicare Drug Price Negotiation Program allows the federal government to negotiate the prices of drugs for Medicare-eligible individuals. The first round of negotiations concluded, and the new pricing is effective Jan. 1, 2026. Medicare will select up to 15 more drugs covered under Part D for negotiation in 2027 by Feb. 1, 2025. In addition, beginning in 2025, Medicare Part D plans will include a $2,000 cap on prescription drugs covered by the plan.

PBM Reform

There is broad support for revamping PBM practices, such as increasing transparency on rebates, detaching drug prices from PBM compensation and expediting generic drugs for some high-cost prescriptions. Individual states have enacted laws that adopted more regulations of PBMs, but there is bipartisan support for increased federal regulations that could impact how PBMs operate.

Summary

In 2025, employer efforts will likely turn to understanding these growing categories of specialty drugs, adjusting plan formularies and managing prescription drug benefits to balance workforce needs with the reality of rising drug costs.

15 Low- and No-cost Employee Benefits to Offer

Dev Team on February 15, 2025

15 Low- and No-cost Employee Benefits to Offer

Employers that sponsor group health plans are subject to many different compliance requirements under federal law. Keeping track of these various requirements can be challenging, even for the most attentive employers. Mistakes can easily occur, which may trigger penalties, excise taxes, enforcement action or lawsuits, depending on the type of mistake. To help avoid these potential consequences, employers should regularly review their compliance with employee benefits laws and implement strategies to address any compliance gaps.

This article highlights 15 budget-friendly employee benefits.

Affordable Benefits That Employees Want

Employers that sponsor group health plans are subject to many different compliance requirements under federal law. Keeping track of these various requirements can be challenging, even for the most attentive employers. Mistakes can easily occur, which may trigger penalties, excise taxes, enforcement action or lawsuits, depending on the type of mistake. To help avoid these potential consequences, employers should regularly review their compliance with employee benefits laws and implement strategies to address any compliance gaps.

  1. Flexible work arrangements—Many of today’s workers desire flexible work hours or the option to work remotely. This flexibility can greatly improve work-life balance and reduce stress levels. Remember that flexible work arrangements require clear policies and communication to ensure accountability and consistency among workers.
  2. Flexible vacation policies—Instead of rigid vacation accrual systems, more employers are implementing unlimited or flexible vacation policies. Trusting employees to manage their time off can lead to greater autonomy and responsibility and help reduce burnout. However, flexible policies require trust and accountability from employees and may entail additional coordination to manage leave schedules.
  3. Wellness programs—Popular wellness initiatives include yoga classes, meditation sessions or health challenges. Promoting physical and mental well-being can lead to healthier, happier employees. Wellness programs are trending as a way to foster positive company culture, but it’s important to keep in mind that they often require commitment and resources for planning and implementation.
  4. Family-friendly policies—The path to and journey of parenthood are unique. Employers can offer attractive family-friendly policies, such as parental leave, flexible child care arrangements, generous nursing breaks or assistance with adoption expenses. Supporting employees in their family responsibilities can improve loyalty and morale.
  5. Professional development opportunities—Today’s workers value learning and development programs for their career growth. Investing in employee professional growth opportunities, such as online courses, workshops or conferences, demonstrates a commitment to their long-term success.
  6. Employee recognition programs—Emotional salary, which comprises nonmonetary components contributing to an employee feeling adequately rewarded at work, contributes to higher levels of job satisfaction. Frequent recognition is one such factor of emotional salary that can help keep workers happy. When employees feel valued, recognized and appreciated for their contributions, they are more likely to enjoy their work and find it fulfilling. Therefore, employers can establish a system for publicly acknowledging and rewarding outstanding performance. Recognition doesn’t always have to come with a monetary reward; a simple “thank you” can go a long way.
  7. Employee assistance programs (EAPs)—These programs can help employees save on health care expenses, provide tax benefits and promote financial wellness. While such programs require administrative setup, the payoff can be worth it, as EAPs provide confidential support for employees dealing with personal or work-related issues.
  8. Flexible spending accounts (FSAs) or health savings accounts (HSAs)—Even if an organization can’t afford to provide comprehensive health care benefits, offering FSAs or HSAs allows employees to set aside pre-tax dollars for medical expenses, which may reduce their financial burden.
  9. Financial education workshops—More workers want guidance to increase their financial literacy. To meet this desire, employers can provide resources or workshops on personal finance management, budgeting and retirement planning. Empowering employees with financial literacy can alleviate stress and improve overall well-being.
  10. Mentorship programs—Mentorship can facilitate knowledge transfer, boost career development and employee engagement, and strengthen the company’s talent pipeline. By offering mentoring resources or pairing junior employees with experienced mentors within the organization, a company can foster professional growth, skill development and a sense of belonging. A mentorship program can easily be scaled based on employees, roles and organization.
  11. Paid volunteer time—Employers can encourage community engagement by granting paid time off for employees to volunteer with charitable organizations. Giving back to the community fosters a sense of purpose and fulfillment and may even enhance team bonding.
  12. Casual dress code—Relaxing the dress code policy can make employees feel more comfortable and increase morale. This option could entail casual Fridays or more lax requirements during summer. The dress code policy should be clearly defined to avoid confusion.
  13. Summer hours—To help boost employee morale and satisfaction during the summer months, employers can offer summer hours, such as closing an hour or two early on Fridays. This perk demonstrates flexibility and trust from the employer and can ultimately help improve employees’ work-life balance during vacation season.
  14. Employee discount programs—Employers can offer discounts that appeal to workers’ interests and needs. This perk allows employees to save money on their everyday purchases, which can improve their financial literacy and boost company loyalty. Keep in mind that exclusive discounts hinge on partnerships and negotiation, and they may not be equally beneficial to all employees, depending on their interests and preferences.
  15. Health and wellness resources—It may be beneficial to provide access to resources such as mental health hotlines, virtual counseling sessions, or fitness and meditation apps. Prioritizing employee well-being sends a clear message that their health is valued.

Summary

Offering employee benefits doesn’t have to come with a hefty price tag. These low- or no-cost benefits that workers value can enable employers to create a supportive and fulfilling work environment that, in turn, attracts and retains top talent. Investing in employee satisfaction not only boosts morale and productivity but also strengthens the overall success and reputation of the organization.

Contact us for more information.

This Benefits Insights is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice. © 2024 Zywave, Inc. All rights reserved.

5 Employee Benefits Trends Shaping 2025

Dev Team on February 15, 2025

5 Employee Benefits Trends Shaping 2025

Employee benefits are transforming, and employers can get ahead of these changes as they strive to attract and retain top talent. The modern workforce is multigenerational, with evolving expectations around work-life balance, mental health and personalized benefits. In this dynamic environment, understanding and implementing the latest trends in employee benefits can set an organization apart as an employer of choice.

This article explores five key trends that will shape employee benefits in 2025.

1. New Administration’s Benefits Changes

Following the 2024 election and the return of the Trump administration to the White House, employers are keeping their eyes out for imminent changes to the health care system. It remains to be seen whether Trump and the Republicans will renew the Affordable Care Act subsidies passed through the Inflation Reduction Act. Nonrenewal of these subsidies, set to expire at the end of 2025, could lead to premium increases and decreased enrollment. Potential changes could also occur to Medicare and Medicaid, which could influence employer decisions regarding retiree health benefits and supplemental coverage options for those enrolled.

Furthermore, employers will have to wait and see how Trump’s platform will impact reproductive health and family policies (e.g., paid leave, child care and the child tax credit) for their employees. The latest election results could bring significant changes to employee benefits for the next four years and beyond.

2. Health Plan Design Modifications

Several industry surveys and reports reveal that employers anticipate health care costs to grow between 7% and 8% in 2025. Provider shortages, rising drug costs, chronic health conditions and aging populations continue to drive health care costs. In addition, glucagon-like peptide-1 (GLP-1) drugs and advanced treatment options, such as cell and gene therapies and biologics, are becoming more popular, even though they come with a high price tag.

This year, employers may struggle to mitigate skyrocketing health care costs while keeping benefits affordable for employees. As a result, many employers will plan and implement multiple cost-saving strategies to mitigate rising health care costs. One such popular strategy is modifying health plan designs. A Mercer survey revealed that half of employers (53%) will make cost-cutting changes to their plans in 2025, up from 44% in 2024. These changes generally involve raising deductibles and revisiting other cost-sharing arrangements. These changes often result in higher out-of-pocket costs for employees seeking care. Employers were hesitant to pass on cost increases in previous years due to attraction and retention concerns. While cost sharing is not the first option, more employers this year may raise deductibles, premiums and copays to offset costs. While many employers have held off on making plan-related changes, they’re finding it more difficult, as health care costs have remained high for the last few years.

Employers may also maintain full coverage of recommended prevention and screening services or incentivize employees to seek cost-effective care options. Efforts to increase employee health care literacy can also help individuals make educated and cost-effective care choices.

3. Supportive Family-building Benefits

Reproductive health care benefits remain a key issue for employers as they strive to meet employee needs and remain competitive. A ResumeBuilder.com survey revealed that 1 in 5 American workers are unlikely to consider a job offer in a state with a highly restrictive abortion policy. Also, 3 in 10 employees are unlikely to work in a state that passes legislation banning in vitro fertilization (IVF), and 14% of workers are likely to leave to work elsewhere if legislation effectively banning IVF is passed in the state where they work. While employers can’t necessarily control which state they’re located in, it’s important to understand employee sentiment and consider benefits and support that meet employee needs.

Additionally, more employers are offering family-building benefits because they have proven highly valued among employees looking to start or build their families. This year, many employers are expanding benefits offerings to include the following:

  • Paid parental and adoption leave
  • Child care subsidies
  • Flexible scheduling 
  • Surrogacy benefits
  • Family planning assistance
  • High-risk pregnancy care
  • Pregnancy, lactation, postpartum and menopause support 
  • Testosterone deficiency treatments

Employers providing legal reproductive care benefits should assess the implications of these offerings as reproductive health care laws continue to evolve.

4. Growing Popularity of GLP-1s

Americans’ heightened interest in and spending on GLP-1 drugs is a major driver of rising health care costs. While GLP-1 drugs were traditionally used to treat diabetes, they are now in demand for weight loss.

These drugs are available in various doses and strengths and are meant to be used as a long-term treatment for their approved uses. GLP-1 treatment costs an average of around $1,000 per individual each month and should be taken continuously. When considering covering weight loss drugs, many employers are concerned that they require a long-term commitment to be effective.

GLP-1 use is already widespread but is expected to increase in popularity. KFF reports that around 1 in 8 Americans have already used a GLP-1 drug, while 6% are currently taking one. However, this number is projected to rise in the coming years. Investment bank J.P. Morgan estimates that 9% of the U.S. population could be on GLP-1s by 2030.

This trend impacts workplaces as employees ask their employers to cover weight loss drugs. Given the priciness of GLP-1 drugs and their long-term commitment, employers may still be on the fence about whether they should cover the drugs despite demand.

5. The Rise of Biosimilars

Specialty drugs, including biological drugs, are one the fastest-growing categories of pharmacy spending. Biologics are medications that come from living organisms, such as sugars, proteins and DNA. Biologics treat a range of conditions, such as cancer, psoriasis, rheumatoid arthritis and inflammatory bowel diseases. Even though these drugs are effective at treating complex health conditions, they are expensive. According to a report published in the medical journal JAMA, biologics make up only 2% of prescriptions but account for 37% of net drug spending. What’s more, biosimilars have the ability to be a deflationary force in an otherwise rising- cost health care industry.

Biosimilars are an emerging category of biologic medications. These treatments are similar to a reference drug, which is an existing biologic that was previously approved by the U.S. Food and Drug Administration (FDA). For a biosimilar to be approved, there must be no meaningful differences in safety and effectiveness from the original biologic. Compared with original biologics, biosimilars are lower-cost drugs that allow for greater access to more patients. New biosimilars are gaining FDA approval and entering the market each year. As of December 2024, 64 of these medications are currently approved and have been frequently entering the market since the first biosimilar was approved in 2015.

In the past decade, $36 billion of biosimilar spending has saved $56 billion on original biologics. These savings could total over $180 billion in the next five years. However, efforts to integrate biosimilars into the drug market have faced challenges with reaching widespread adoption, such as drug exclusivity rights, active patents, approval processes and success rates for developing biosimilars.

Looking forward, the total biologics industry is projected to expand. Industry projections show that the market size is expected to grow from a current spend of around $450 billion to almost $850 billion over the next decade.

Summary

As the workforce’s needs continue to evolve, so must the benefits that companies offer to remain relevant and meaningful to employees. Every workplace is different, but employers can strive to monitor and understand the latest benefits trends to better attract and retain workers.

Contact us today for more benefits resources.

This Benefits Insights is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice. © 2025 Zywave, Inc. All rights reserved.