Congress' push to rein in drug costs will impact benefit strategies

• What's at Stake: Rising pharmacy costs threaten the sustainability of employer-sponsored health coverage.  
• Supporting Data: Employer-sponsored coverage insures more than 150 million Americans.  
• Forward Look: Expect transparency, competition, and contracting reforms to reshape employer pharmacy strategies.
• Source: Bullets generated by AI with editorial review

As prescription drug spending continues to climb, employer groups are pressing lawmakers to go beyond surface-level reforms and address structural inefficiencies embedded throughout the drug supply chain.

Testifying before the House Energy and Commerce Subcommittee on Health, James Gelfand, president and CEO of The ERISA Industry Committee (ERIC), emphasized that employer-sponsored coverage — which insures more than 150 million Americans — remains the largest source of private health insurance in the U.S., and is increasingly burdened by rising pharmacy costs.

Gelfand cautioned lawmakers that PBM reform alone will not fully address affordability challenges. Instead, he argued that a broader look at misaligned incentives, limited competition and opaque business practices across the entire supply chain is necessary to deliver meaningful relief for employers and workers.

"The U.S. healthcare system is known for innovation," Gelfand said in the hearing. "Yet it has become a complex web of intertwined entities and actors that each have their hand in the cookie jar well before a drug ever makes it to the end user, the patient." 

He urged Congress to continue pursuing transparency and accountability reforms to ensure employers are securing the best value on behalf of plan participants.

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For benefit leaders, increased transparency, as well as enhanced reporting and data access could strengthen audit capabilities and improve negotiating leverage with vendors.

"ERIC member companies are committed to working with Congress to identify misaligned incentives, market failures, and regulatory barriers that drive up costs, so we can advance solutions that promote competition and help large employers continue to offer access to affordable, high-quality healthcare," Gelfand said. 

Contracting flexibility and competition

Additional legislation discussed at the hearing would aim to foster greater fairness in provider contracting, including allowing employers to incentivize employees to choose high-quality, lower-cost providers and contract directly with hospitals without restrictive affiliated-provider requirements.

For benefit managers, these policy discussions mirror real-time challenges: Specialty drug growth, limited visibility into net pricing and constrained contracting flexibility. While federal reforms remain under debate, employers continue to explore parallel strategies — from reassessing PBM arrangements and promoting biosimilar utilization to strengthening data analytics and pursuing value-based purchasing models.

Read more: Exclusive research: Benefit leaders face a pharmacy cost crisis in 2026

The message from Capitol Hill was clear: Sustaining employer-sponsored coverage will require more competition, more transparency and stronger accountability throughout the prescription drug ecosystem. For benefit leaders, those priorities are already shaping the next generation of pharmacy cost-containment strategies.

"We look forward to working with the Committee to enact legislation addressing these critical goals, ensuring that large employers can continue to offer affordable healthcare coverage, including access to affordable drug options, to the tens of millions of Americans who depend on employer-sponsored coverage," Gelfand concluded in his testimony.