Recent changes in legislation and manufacturer pricing strategies have upended the traditional financials of the pharmacy benefits market. Manufacturer rebates, which have long been a centerpiece of the market, are falling out of favor, with a shift toward lower upfront product costs. As a result, the projection of average wholesale price and ingredient cost trends has become a more important exercise. This report provides insights into pharmacy cost and utilization trends based on our analysis of Milliman’s proprietary Milliman Consolidated Health Cost Guidelines Sources Database. This multiyear, multiple-line-of-business, longitudinal database includes claims information from several national and regional health plans and represents more than 80 million lives. In the paper, we also discuss factors that may have influenced these trends and their potential future implications, and explore key metrics in a supplemental information section.

Emerging trends discussed:

• Weight-loss drugs: Spending for obesity glucagon-like peptide-1 agonists continues to increase disproportionately compared with other drug classes, driven by drug innovation and continued patient demand.
• Antidiabetics: List price trends for brand-name insulin products are expected to become more stable after the significant reduction seen at the end of 2023 and beginning of 2024.
• Biosimilars: The market continues to experience significant pricing changes as plans choose from many available strategies.
• Drugs for metabolic dysfunction-associated steatohepatitis: The approval of Rezdiffra, used to treat a liver condition often found in those with high cholesterol, type 2 diabetes, or obesity, will likely encourage other manufacturers to pursue their own treatments within this therapeutic class.