The Data Problem Behind Prescription Drug Waste

Healthcare technology has become very good at adding steps to medication management, but struggles to realize that more doesn't always mean better.

A prescription can trigger a new rule, a workflow alert or another outreach campaign when a member has not filled a medication. These interventions may solve narrow problems, but pharmacy cost management still grapples with a harder question: When should the system prompt a clinical review, stop paying for a medication or identify a more cost-effective option before unnecessary spending continues?

That question is becoming more urgent as drug costs rise. Prescription drug spending increased 7.9% in 2024 and reached $467 billion, according to the Centers for Medicare & Medicaid Services.¹ The IQVIA Institute reported that net medicine spending increased 10.6% in 2025, rising from $548 billion to $606 billion.²

The clues behind wasteful drug spending often already exist inside pharmacy and clinical data, but they rarely sit in one place. Payers can see what was paid, pharmacies can see what was dispensed, physicians understand the clinical history and benefit designs show what patients may owe at the counter. When those signals stay separated, the default is usually continuation.

A better model identifies wasteful drug spending already embedded in the pharmacy benefit, then routes well-supported opportunities to physicians through a workflow that protects the member experience and avoids unnecessary work for employers, physicians and pharmacists.

What Is the Commercial Cost of Additive Systems?

In 2021, researchers Gabrielle Adams and Leidy Klotz described a cognitive pattern called subtraction neglect.³ When people are asked to improve something, they tend to add rather than remove. This idea helps explain prescribing behavior, but it also applies to the technology and payment infrastructure that surrounds prescriptions.

Many medication management tools are designed to add another step to an already crowded process, whether that means a prior authorization checkpoint, a utilization management rule or another member outreach effort. These interventions can be useful, but each one asks a physician, pharmacist, payer or member to do more work before the system can determine whether the medication still makes clinical and financial sense.

That design matters because drug spending doesn't rise only from high-cost therapies. Spending also increases when duplicate therapies persist, when older prescriptions no longer meet the patient's needs or when a lower-cost option could achieve the same clinical effect. These cases are harder to find than a single expensive claim because the waste is often spread across thousands of ordinary medication decisions.

Comprehensive medication review also requires time, clinical context and a high-fidelity medication reconciliation list, while its value can be hard to measure in the moment. When a medication is removed, success may look like the adverse event that never occurs, or the hospitalization that never happens. Prevention leaves no fingerprints.

Fragmented Data Hides the Second Look

Medication review is difficult because the full medication story is rarely visible in one place. A claim can show that a prescription was paid, but not whether the therapy still fits the patient. A formulary file can point to a less expensive option, but it doesn't indicate whether the physician has a clinical reason to avoid it. Without that shared view, an old prescription may continue simply because no one has enough context to question it.

For biopharma and payer executives, that gap has commercial consequences. Drug affordability affects whether patients start therapy, stay on therapy and generate the long-term value a treatment is meant to deliver. A clinically strong medication can still fall short if the member cannot afford it or the payer cannot sustain the cost.

Price data alone cannot separate high-value prescribing from avoidable waste. Medication intelligence must connect the clinical rationale behind a prescription with the pharmacy and benefit data surrounding it, giving physicians enough context to reconsider a medication before unnecessary spending continues.

From Utilization Management to Medication Intelligence

Traditional utilization management often starts with coverage questions: whether a drug is covered, whether prior authorization is required or whether another therapy has been tried. A subtraction-oriented technology model starts with a different review, looking for prescriptions that may no longer be needed, may overlap with another therapy or may have a clinically appropriate, lower-cost alternative.

Those questions can be translated into analytics, alerts and physician-facing recommendations, but the goal is not to create another administrative hurdle. The commercial value comes from finding savings already present in prescribing and claims patterns, then routing those opportunities through a workflow that preserves the physician's role and reduces friction for the patient.

Broad restrictions can save money, but they can also create downstream costs through appeals, abandonment, physician abrasion and delayed therapy. More targeted medication intelligence focuses on cases with a clearer clinical and financial rationale for review. Finding avoidable waste without undermining appropriate use gives health plans and employers a more disciplined way to manage pharmacy costs.

A More Targeted Phase of Pharmacy Cost Management

Technology can identify patterns at scale, but prescribing decisions remain clinical decisions. A payer-facing or pharmacy-facing platform may surface a medication that appears duplicative, risky or more expensive than a clinically similar option while providing the physician with enough context to decide whether the recommendation fits the patient.

Prescription drug spending will remain a central concern for payers, employers, policymakers and biopharma companies. High-cost therapies will continue to shape that conversation, but everyday medication use also contains savings opportunities that are easier to miss because they are dispersed across ordinary prescribing and claims patterns.

The most useful innovation in medication management may be technology that helps the system recognize when doing less is the smarter, safer and more affordable choice.

Siva Mohan, MD, is Cofounder, president and Chief Medical Officer at RazorMetrics.

References

1. Centers for Medicare & Medicaid Services, National Health Expenditure Fact Sheet, published January 2026. https://www.cms.gov/data-research/statistics-trends-and-reports/national-health-expenditure-data/nhe-fact-sheet
2. IQVIA Institute, U.S. Medicine Use Trends 2026 report, published April 28, 2026. https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/us-medicine-use-trends-2026
3. Gabrielle Adams, Benjamin Converse and Andrew Hales, writing in the journal Nature, published April 7, 2021. https://www.nature.com/articles/s41586-021-03380-y