Two major employer healthcare reports released this month highlight the mounting financial pressure facing plan sponsors as they prepare for 2027.

New projections from Aon estimate employer healthcare costs will rise 9.5% in 2027, marking a fourth consecutive year of near-double-digit increases that push average costs above $19,000 per employee. Prescription drug spending remains a major driver, fueled by continued adoption of specialty medicines and GLP-1 therapies. The Business Group on Health reached a similar conclusion in its annual survey, finding that pharmacy costs are expected to be the primary contributor to rising employer healthcare spending next year.

At the center of both projections are GLP-1 medications, which continue to gain traction across a growing range of clinical indications. Together, the reports underscore that employers are faced with balancing access and long-term affordability for their benefit strategies.

That financial pressure is already influencing coverage decisions. Reporting this week confirmed that a growing number of large employers plan to scale back or eliminate GLP-1 coverage for weight loss in 2027, following the 6% of large employers who dropped coverage this year. PepsiCo joined that cohort and informed some employees that it would end coverage for weight-loss medications, citing the drugs as one of the fastest-growing costs in its health plan.

At the same time, emerging direct-to-consumer and direct-to-employer purchasing models are creating new pathways to expand access to GLP-1 therapies while offering employers greater control over costs. Continued innovation will be essential as plan sponsors evaluate coverage options and manufacturers pursue new pricing and distribution approaches.

– Megan Hickey, Managing Director

With employer coverage under strain, many patients prescribed GLP-1s have likely seen ads or searched for info on the Medicare GLP-1 Bridge Program. Roughly two months into existence, the program’s impacts are beginning to come into focus.

Large pharmacies report GLP-1 uptake among older adults this summer has exceeded expectations, with analysts confirming a jump in prescriptions after the Bridge program took effect in July. Separately, GLP-1 maker Eli Lilly published real-world data showing that when adults older than 55 used Zepbound and stayed on therapy for one year, the resulting lower rates of emergency care and hospitalizations offset the cost of the drug under the Bridge Program.

Despite the program’s promise, patients are reporting troubled waters under the Medicare Bridge. Applicants saying they are being denied due to one provision in small print: The $50 price applies only to people using the medicine solely for weight loss, excluding users diagnosed with Type 2 diabetes or obstructive sleep apnea.

Budget-conscious states are still hesitant to jump on the GLP-1 bandwagon. Nine months after the Trump administration announced it would work with state Medicaid programs to widen access, only Indiana has publicly signed on to the BALANCE pilot program. Several states told Politico they have no plans to participate and will consider narrowing GLP-1 coverage for citizens.

– Andrew Wishon, Editor-in-Chief

More than rhinestones and records: Dolly Parton quietly built a remarkable healthcare legacy. Over more than two decades, she put her philanthropy behind scientific discovery, better care and healthier communities in her native Tennessee and beyond.

In her honor this week, we celebrate Dolly’s imprint on the industry by the numbers:

• $1 MILLION: Her 2020 gift to Vanderbilt University helped fund early COVID-19 research connected to the Moderna vaccine.
• 3: The Dolly Parton COVID-19 Research Fund supported three pandemic research projects.
• 60%: The share of patients at the newly renamed Dolly Parton Children’s Hospital who rely on Medicaid, with her philanthropy supporting access to pediatric care for families across East Tennessee. The 152-bed hospital also reaches communities through nearly 40 additional locations.

– Leah Nebbia, Managing Director, who visited Dollywood in high school and would highly recommend it for a late-summer weekend getaway

• August 31 – expected announcement of drug pricing deals with biotech companies, White House

• “The latest federal data show that the number of parents seeking exemptions from school vaccines rose sharply across America in the past year. Unfortunately, that means the worst of Kennedy’s health legacy is yet to come.” – Editorial Board, The Washington Post
• “Should U.S. restrictions on Chinese biotech take effect, there’s an obvious work-around: European pharmaceutical companies as the licensing conduits for Chinese-discovered drugs entering the U.S. market will become obvious.” – Pavle Vukojevic et al., STAT
• “Ardent critics of laissez-faire economics will argue this means drugmakers prioritize profits over patient outcomes, but the two goals are not mutually exclusive. Lives can be improved and extended as stock prices tick up.” – Tom Price, The Washington Post
• “Denmark, which the Make America Healthy Again movement often singles out as a health success story, is a case in point. Its excellent outcomes did not emerge from a single policy or a particular vaccine schedule.” – Reginald D. Williams II, The Hill

• The Trump administration is expected to announce a new round of MFN drug-pricing agreements with midsized biotech companies next week, extending beyond the 17 deals reached with large pharma companies last year. Bloomberg: White House to Announce New Drug Pricing Deals with Biotechs.
• The Fifth Circuit rejected PhRMA’s challenge to Medicare drug price negotiations, with legal experts calling future Supreme Court appeals “pretty dim” after drugmakers have lost all challenges decided on merits. Endpoints: Pharma’s legal battle over Medicare negotiations reaches ‘dead end.’
• The FDA approved Revolution Medicines’ Rasonque to treat pancreatic cancer, a first-of-its-kind pill launching at a list price of $39,800 per month. Associated Press: FDA approves landmark pancreatic cancer drug that’s shown to improve survival.
• A CMS rule barring Medicaid funding for pediatric gender-affirming care is raising broader alarms as a possible precedent for denying coverage of other FDA-approved drugs. STAT: Medicaid transgender care rule sets precedent that could restrict coverage of other drugs.
• The European Commission concluded it is too early to draw reliable conclusions about the impact of U.S. MFN drug pricing policy on European medicine launches and prices. Politico: Too early to assess impact of Trump’s drug pricing policy on Europe, EU says.
• HHS is requesting public comment on restructuring childhood vaccine categories, which could allow insurers to drop zero-copay vaccine coverage and alter eligibility under a federal program. STAT: HHS document offers new clues to Kennedy’s vaccine plans.
• Texas Democratic Senate candidate James Talarico unveiled a healthcare plan backed by Mark Cuban that calls for antitrust legislation targeting vertically integrated conglomerates. CNBC: Texas Senate hopeful Talarico teams with Mark Cuban on plan to break up healthcare ‘monopolies.’