HR and finance leaders urged to reconsider pharmacy benefits cost impact

ST. LOUIS, As prescription drug costs continue to rise, HR and finance leaders are being urged to reconsider the true cost of pharmacy benefits beyond the immediate financial impact. According to SHARx, a procurement management solution for high-cost prescription drugs, employers are under increasing pressure to balance pharmacy spending with other critical areas of employee compensation and benefits.

Paul Pruitt, SHARx's Chief Growth Officer and Co-Founder, highlighted that the impact of rising drug costs extends far beyond the pharmacy budget. "Employers are facing significant pressure to invest in compensation, hiring, and other benefits, while employees are questioning whether their healthcare benefits are truly adding value to their total compensation package," said Pruitt.

Recent Bureau of Labor Statistics data reveal that private sector employers' health benefit costs increased by 6% year over year, compared to a 3.1% rise in wages and salaries. Pharmacy spending is a major contributor to this increase, and when it exceeds expectations, employers often have limited options for absorbing the additional expense. This can result in higher employee contributions, larger deductibles, delayed benefit improvements, and tighter compensation or hiring budgets.

Pruitt noted, "Employees start to wonder if their healthcare benefits are worth the money and whether they can afford to use them. They also question the ease of accessing the medications they need. These concerns are leading both employers and employees to rethink the term 'benefit.'"

The pressure on employers to maintain sustainable benefits while supporting recruitment, retention, and employee wellness is driving difficult decisions about cost absorption and employee contributions. Employers must decide how much of the growing cost the organization can bear and how much should be passed on to employees.

Pruitt emphasized the distinction between cost control and cost shifting. "True cost reduction lowers total pharmacy spend through measures like better sourcing, utilization management, and simplifying access. Cost shifting, on the other hand, merely delays the expense by increasing deductibles, copays, or coverage restrictions without addressing the underlying cost of care."

If total spending remains the same while employees pay more, Pruitt warns that the cost problem has not been solved; it has merely been moved. This can lead to employees struggling to access necessary medications, and HR teams facing increased complaints and escalations that undermine trust in the organization's benefits.

The issue is also viewed through the lens of opportunity cost. CFOs should consider how unexpected prescription spending impacts other areas of the business, such as merit increases, additional hires, or other workforce priorities. For instance, $500,000 in avoidable pharmacy expenses could support additional headcount, compensation increases, or other benefit enhancements.

Pruitt advises that pharmacy decisions increasingly require joint ownership by HR and finance. Before annual renewal, CHROs and CFOs should review total pharmacy spend, year-over-year trends, forecast variances, cost shares, specialty and GLP-1 exposure, high-cost claimant concentration, prescription abandonment, member complaints, and HR escalation volumes alongside recruitment, retention, and compensation priorities.

Employers are also cautioned against defining success solely by achieving the lowest projected pharmacy cost. A sustainable strategy should balance affordability, access, member experience, and predictability. The central question should shift from "How much does our pharmacy benefit cost?" to "What is our pharmacy strategy allowing or preventing us from doing for our people?" The answer can significantly influence more than just healthcare spending, impacting hiring, compensation, and overall employee experience.

Founded to combat the high cost of prescription drugs, SHARx was built on the principles of putting people before profits. With an innovative and ethical sourcing model, the company aims to reduce waste, provide radical transparency, and ensure affordable, reliable, and dignified access to necessary medications. Notable sports figures, including Sophie Cunningham, Brock Osweiler, and Heath Shuler, are helping to amplify SHARx's mission to restore financial equity to the healthcare system.