01 MARKET SIGNAL
Diabetes Remains a Major Cost Driver Across the Working-Age Population
A recent BenefitsPRO report highlights the significant prevalence of diabetes among Americans ages 45–64, a demographic representing a substantial portion of the nation’s experienced workforce.
According to the American Diabetes Association, individuals diagnosed with diabetes incurred an average of $19,736 in annual medical expenditures in 2022, approximately 2.6 times the expected spending of individuals without the condition. Nationally, the economic burden of diagnosed diabetes reached an estimated $412.9 billion, including direct medical expenses and lost productivity.
While the growing adoption of GLP-1 medications and other metabolic therapies presents meaningful opportunities to reduce future rates of type 2 diabetes, the financial implications for today’s employer-sponsored health plans remain substantial.
02 WHY THIS MATTERS
Chronic Disease Creates Recurring Financial Exposure for Employers
Unlike isolated medical events, diabetes frequently requires continuous treatment, including prescription medications, diagnostic testing, physician visits, and ongoing management of associated conditions.
For midsized employers, even a relatively small population of members managing diabetes can represent a meaningful and recurring component of annual healthcare expenditures.
Importantly, these costs are not determined solely by the prevalence or severity of disease. They are also influenced by the prices negotiated and paid for the medical services, medications, and supplies required to manage it.
For CFOs and HR leaders, this distinction is critical. While an employer may have limited influence over the underlying health conditions of its workforce, it can exercise considerably greater control over the contractual and administrative mechanisms through which healthcare is purchased.
03 HPX PERSPECTIVE
The Greater Opportunity Lies in Prescription Drug Economics
Traditional, carrier-bundled pharmacy arrangements often incorporate multiple layers of financial incentives, including PBM rebates, spread pricing, formulary placement arrangements, and other intermediary compensation structures.
These mechanisms can create a meaningful disconnect between the underlying acquisition cost of a medication and the amount ultimately paid by the employer health plan.
For commonly prescribed diabetes treatments, including insulin and newer metabolic therapies, the financial implications can compound across recurring prescriptions and years of treatment.
At HPX, we believe employers should evaluate pharmacy administration through a fundamental question: Is the health plan consistently securing the lowest available net price for clinically appropriate medications, or is its purchasing power constrained by contractual arrangements that preserve unnecessary intermediary margins?
Addressing this challenge requires more than negotiating larger rebates or modifying formularies. It requires visibility into actual net costs, independent evaluation of available sourcing channels, and the administrative flexibility to respond as pharmaceutical pricing and competition evolve.
The objective is not simply to reduce pharmacy spending. It is to eliminate avoidable costs without compromising the accessibility or quality of care available to employees and their families.
04 LOOKING AHEAD
Better Disease Management Requires Better Purchasing Discipline
The continued expansion of GLP-1 therapies, evolving clinical guidelines, and increasing pharmaceutical competition could meaningfully reshape diabetes prevalence and treatment economics over the next decade.
However, improved clinical outcomes will not automatically translate into lower employer health plan expenditures.
As new medications enter the market, patents expire, competing therapies emerge, and manufacturer pricing arrangements change, employers will need health plans capable of adapting to these developments rather than remaining confined to a single, static purchasing model.
For forward-thinking organizations, the opportunity is twofold: support better long-term health outcomes through appropriate access to effective treatments, while maintaining disciplined oversight of the prices paid to deliver those treatments.
The future of sustainable employer health plans will depend not only on what healthcare is consumed, but on how efficiently that healthcare is purchased.