Specialty Drugs: More Indications. More Risk.
Is your pharmacy spend predictable enough to weather the storm?
Pharmacy spend isn’t just rising; it’s becoming increasingly difficult to predict. For brokers and plan sponsors, the challenge is no longer limited to high-cost drugs. It’s the accelerating pace of utilization growth, driven by expanding indications, that is reshaping pharmacy budgets in real time.
Expansion of Drug Indications
While drug pricing often commands headlines, utilization expansion is the quieter force creating sustained financial pressure. The expansion of drug indications has transformed once-niche specialty medications into mainstream treatment options, as nearly 40% of new drugs gain additional indications within five years of launch. When manufacturers secure additional FDA approvals to expand their medications’ clinical use and longevity, plans are exposed to rapid cost growth that they likely didn’t predict and aren’t built to absorb.
The result? More eligible members, longer treatment durations, and compounding cost exposure for plans.
Real-World Examples
Many specialty medications such as Skyrizi® (risankizumab) and Stelara® (ustekinumab) entered the market serving limited populations. Over time, additional approvals expanded their reach across more common disease states, significantly widening the patient pool.
GLP-1 therapies such as semaglutide (Ozempic®, Wegovy®) and tirzepatide (Mounjaro®) offer a clear example. Initially approved for type 2 diabetes, they’ve now been granted expanded approvals – for weight management, cardiovascular risk reduction, sleep apnea, and kidney disease, among others – dramatically increasing utilization.
Key figures:
- GLP-1 utilization has nearly doubled between 2024 and 2025
- Ozempic® and Mounjaro® now represent $20 billion+ in annual Medicare Part D spend
This pattern extends beyond GLP-1s:
- Skyrizi®, first approved for psoriasis, is now indicated for the treatment of psoriatic arthritis and Crohn’s disease
- Stelara®, expanded from dermatology into gastrointestinal indications including ulcerative colitis
Each added indication increases plan exposure – not simply because the drugs are expensive, but because more members qualify for long-term therapy.
Why Indication Evolution Creates Budget Volatility
Expanded indications drive higher costs in two ways:
- Greater member eligibility = increased utilization volume
- Long-term treatment duration = amplified spend
Even modest shifts in utilization can produce an outsized financial impact with such costly medications. For self-funded and level-funded plans, this creates volatility that is difficult to forecast using traditional claims-based pricing models.
Predictive Financial Modeling
Managing utilization increases requires more than clinical oversight alone. As indications expand, more clients are seeking a PMPM financial model that proactively accounts for industry trends and removes budget volatility.
Not only is this pricing model more predictable and cost-friendly, it is also aligned with emerging legislation that supports the shift from variable pricing to truly transparent fee models.
PBDRx combines comprehensive specialty management strategies and our PMPM predictive pricing model to help brokers and their clients combat the cost impact of increased utilization, offering:
- Greater cost visibility
- Clean, balanced billing
- Protection from sudden spikes tied to indication expansion
This financial predictability is supported by a comprehensive specialty management strategy, including:
- Data-driven utilization management
- Strategic and custom formulary designs
- Hands-on clinical programs
PBDRx actively manages today’s evolving specialty landscape and its associated cost drivers, empowering brokers with the insight needed to better anticipate pharmacy spend and forecast total healthcare costs.
If you’re seeking a smarter approach to specialty management, we are here to help you shift from reacting to this trend to managing it with purpose and predictability for your clients.