Report: GLP-1s, Oncology to Drive Drug Spending Surge in 2027

More than 85% of health plan actuaries surveyed for PwC's “Medical Cost Trend: Behind the Numbers 2027” report expect pharmacy spending to outpace overall medical cost growth next year, a signal with direct consequences for how manufacturers plan market access, contracting, and channel strategy heading into the 2027 benefit cycle.¹

As payers and employers finalize 2027 benefit designs, oncology, GLP-1s, and PBM economics aren't just structural cost drivers, they're also where formulary placement, contracting terms, and channel design decisions get made. The forecast is less a budget exercise than an early read on where commercial friction is headed.

What Is Driving the Numbers?

PwC projects Group medical cost trend at 9.0% for 2027 and Individual market trend at 8.5%, the fifth straight year of elevated increases, based on a survey of actuaries at 27 health plans covering 103 million employer-sponsored and 8 million ACA marketplace members.¹ Medical costs still account for the larger share of that growth, but pharmacy is climbing at the faster rate.

In an interview with Pharmaceutical Commerce, Philip Sclafani, a PwC principal and advisor on the report, says "the rate of increase in pharmaceutical spending is the fastest and faster than we've seen in recent years.”

How Does GLP-1 Exposure Keep Expanding?

According to the report, GLP-1s remain a major pharmacy inflator. Prescriptions filled in December 2025 were double the December 2024 volume, and FDA approvals have broadened beyond obesity and diabetes into cardiovascular disease, MASH, chronic kidney disease, and obstructive sleep apnea, expanding the eligible population even where employers have tightened obesity-specific coverage.¹ Despite that hesitation on the weight-loss side, overall coverage has still grown: KFF data cited in the report found that 43% of large employers with 5,000 or more workers covered GLP-1s for weight loss in 2025, up from 28% the year before.¹

In his interview with Pharmaceutical Commerce, Sclafani walks through how payers and employers are approaching GLP-1 coverage. Diabetes coverage, the original and longest-standing use, is "fairly broadly covered and should be," he says. Weight-loss coverage is a different matter — excluded from Medicare and, on the commercial side, "very much an employer-by-employer decision," even when a GLP-1 already sits on a PBM's national formulary. Employers still have to decide whether to cover the drug for weight loss at all and, if so, under what conditions, like BMI thresholds, enrollment in a structured weight-management program, or restrictions on which specific GLP-1s are covered.

That employer-by-employer dynamic has produced what Sclafani calls a "topsy-turvy" market. "Some employers are adding coverage, some are taking away coverage," he says. Some have looked outside the PBM entirely, partnering with direct-to-patient programs and offering access through there, rather than covering it through their PBMs, sclafani adds, noting employers now have "upward of twenty various types of direct-to-employer and direct-to-patient programs" to choose from.

Recent approvals of oral formulations add another growth lever. "No question the approval of both of the orals on market is a seminal event for this market," Sclafani says. "There's just going to be some people that are needle shy that may have wanted the benefit of a GLP-1, but not to inject."

That expansion is colliding with growing employer hesitation. A separate survey of 105 large employers by the Business Group on Health found that while two-thirds currently cover GLP-1s for weight management, 10% plan to drop that coverage in 2027 and only 72% are committed to continuing it.²

Sclafani describes the calculus behind that hesitation from the employer's perspective: "I pay for all the people that use a GLP-1 now, and as a self-insured employer, I pay for that dollar for dollar." The return on that spending, he says, is uncertain and likely delayed — "I may not see the benefits of these for five, ten, fifteen years" — in part because "there's been no long-term rate studies" yet proving newer GLP-1s reduce cardiovascular events.

That volatility helps explain why direct-to-patient and direct-to-employer channels have grown so fast. "Ninety plus percent of sales of some of the newer GLP-1s have been direct," Sclafani says. For manufacturers, the diverging signals, broader clinical eligibility on one side and eroding employer commitment on the other, make channel strategy and direct-access programs as important to 2027 planning as formulary contracting itself.

Why Are Oncology Costs Growing?

US spending on cancer medicines reached $143 billion in 2025, and oncology spending is expected to climb nearly 60% by 2030, driven by antibody-drug conjugates, bispecific antibodies and radioligand therapies, according to IQVIA data cited in the report.¹ Unlike pharmacy-benefit categories, oncology drugs administered under the medical benefit remain comparatively unmanaged. "Physicians and providers and these centers of excellence need the right latitude to choose the right drug and treatment algorithm," Sclafani says. "It's not even drug by drug — it's mixtures of drugs and lines of therapy."

"That's sort of what America does," Sclafani says. "We pay for access to those latest oncology treatments as they're approved, studied and evaluated by NCCN and other bodies."

Will PBM Transformation Lower Net Costs?

The report identifies PBM reform as a wildcard rather than a deflator, and Sclafani was direct about the distinction. "Transparency does not equal cost reductions," he says. “History has shown parts of healthcare have gone through these types of structural changes before and come out preserving their profit margin.”

Drawing a parallel to past structural shifts, such as providers' move from AWP- to ASP-based reimbursement, he said intermediaries have historically adjusted their models without giving up margin. "It's still going to cost the same, or I guess nine percent more next year, no matter what we do," he says.

The practical takeaway: expect potential new transparency requirements and de-linked pricing models to reshape PBM and payer relationships procedurally, but plan budgets and net-price assumptions around steady — not shrinking — cost pressure as 2027 contracts take shape.

References

1. PwC. Behind the Numbers: Medical Cost Trend 2027. PwC; 2026. Accessed June 18, 2026. https://www.pwc.com/us/en/industries/health-industries/library/behind-the-numbers.html.
2. Business Group on Health. GLP-1 Costs Loom Large for Employers, Forcing Challenging Coverage Decisions, Business Group on Health Survey Finds. Published June 11, 2026. Accessed June 18, 2026. https://www.businessgrouphealth.org/newsroom/news-and-press-releases/press-releases/2026-glp-1-survey.