Cigna plans to shift to a rebate-free model for its commercial pharmacy benefit offerings starting in 2027 that applies discounts upfront at the point of sale. Understanding the potential trade-offs will be key as employers evaluate future benefit strategies.
On September 25, 2025, President Trump announced plans to impose a 100 percent tariff, effective October 1, on branded or patented pharmaceutical products imported into the United States unless manufacturers are already “building” a domestic facility.¹ While the announcement captured widespread attention, recent reporting suggests that enforcement could be delayed, selectively applied, or even paused altogether as the administration finalizes exemption criteria and navigates political and legal challenges.²
What It Means for Plan Sponsors
At this stage, the proposed tariffs have no direct impact on pricing or supply. Potential effects will depend heavily on how exemptions are defined and implemented. Drug costs could rise modestly if manufacturers pass through tariff-related expenses or if domestic production proves more expensive than overseas manufacturing. Supply chain risks remain a consideration for therapies with limited domestic capacity, though wholesalers report stable inventories and no immediate disruptions.
Outlook & Next Steps
Many implementation details are still being developed, including whether tariffs will apply to finished products or active ingredients and which product classes may ultimately be affected. Stakeholders across the pharmaceutical industry are lobbying heavily, and political, legal, or logistical challenges could shape how the tariffs are ultimately applied.3 Industry experts expect additional guidance in the coming weeks as agencies refine rulemaking and consider exemptions for essential medicines.
For now, no immediate action is required from plan sponsors and brokers. Given ample inventories, high generic utilization, and the likelihood of broad exemptions on many brand name drugs, the near-term risk to pricing increases related solely to tariffs appears highly unlikely. We will continue to monitor developments closely and update our brokers and clients as the policy landscape evolves.
Sources:
3Trump drug tariff draws backlash from NJ pharma industry – NJBIZ
Please note that this article was originally published on 10/01/2025 and updated on 10/03/2025 after the Benecard Team received further guidance from the State.
On September 24, 2025, the NJ SHBP Plan Design Committee (PDC) met and approved several changes to the prescription drug plans for the State Health Benefits Program – Local Government (SHBP-LG).
The following changes apply to all State and SHBP-LG prescription plans, including MMRx and with the exception of the HD High Plan which was not referenced in the resolution. It is also important to note that these changes only apply to active employees. There were no changes to the early retirees or Medicare-eligible retirees.
Effective November 1, 2025, non-diabetic GLP-1 drugs prescribed for weight loss will carry a $45 copay per 30-day supply until the State implements a lifestyle management program. Once the program is active, members who participate will continue paying the $45 copay, while those who do not participate in a lifestyle management program will see their copay rise to $125 per 30-day supply.
The SHBP-LG will introduce the following copay structure which is now expected to become effective on July 1st, 2026:
● Generic drugs: $10 retail (per 30-day supply) / $10 mail order (90-day supply)
● Preferred brand drugs: $20 retail (per 30-day supply) / $50 mail order (90-day supply)
● Non-preferred brand drugs: $75 retail (per 30-day supply) / $150 mail order (90-day supply)
● Specialty drugs: $75 (available through mail order only, up to a 30-day supply)
In addition, mail order will become mandatory for all maintenance drugs. The resolution also sets new out-of-pocket maximums for prescription drug benefits: $2,120 for individuals and $4,240 for families. All other prescription benefits remain unchanged—such as mandatory generic, mandatory mail order for specialty drugs, step therapy, and an exclusionary formulary.
As of now, the above plan changes do not come with any rate reduction off the double-digit premium increases for 2026 which were approved in early September.
This remains a fluid situation. Benecard will continue to closely monitor this ongoing situation and keep you updated on any further developments or communications related to the NJ SHBP-LG. In the meantime, if you have any questions on this topic, please email us at talktous@benecard.com.
Sources:
SHBP PDC RESOLUTION #2025-11
Prescription drug costs are one of the fastest-growing¹ and most unpredictable components of employer-sponsored health plans. A single high-cost therapy or catastrophic claimant can skew an entire year’s budget, disrupt cash flow, and destabilize long-term benefit strategies. Just 1% of employees account for nearly a third of all health care spending, averaging more than $206,000 per person annually1.
Self-funding is often viewed as a cost-saving strategy because PBMs “promise” savings through manufacturer rebates, drug discounts, and clinical management programs. On the surface, these look attractive, but the actual savings or expected claim costs these PBM’s propose are not guarantees.
Let’s get right to rebates which typically become the primary selling point under self-funding. Unlike our fixed rate program, where rebates are accounted for in month one and floated by Benecard, self-funded PBM’s typically don’t pay such rebates until 120–150 days after the close of each contractual year’s quarter—resulting in cash-flow challenges and budget uncertainty.
Prescription drug costs are especially vulnerable to excessive spikes in claims costs—often driven by one or two specialty drugs such as those related to oncology2 or inflammatory conditions, as well as weight-loss and diabetes drugs like GLP-1s. Stop-loss coverage may appear to offer protection, but it is not a silver bullet for managing 100% of the pharmacy risk. Plan sponsors remain exposed to exclusions through “laser” provisions, gaps in coverage, and additional costs beyond the stop loss insurance. Furthermore, after a poor claims year, it can become difficult to find a stop-loss underwriter willing to take on the risk.
Benecard’s fixed-rate Rx benefit program is designed to break this cycle. Unlike self-funding, our model eliminates volatility by guaranteeing plan sponsors’ Rx bottom line and providing them with a fixed monthly rate for prescription drug coverage. That means:
Another strength of Benecard’s approach is the administration of collectives (groups of employers who share the risk together). By combining purchasing power and spreading risk across a broader population, collectives create stability that individual employers, particularly smaller ones, cannot achieve on their own.
Collectives help reduce the impact of catastrophic claims and ensure that no single employer bears disproportionate financial burden. For brokers advising clients, collectives are a powerful option to recommend, particularly for small to mid-sized employers who want the advantages of self-funding without the inherent risks.
For plan sponsors, the choice is not just about funding models; it’s about risk management, predictability, and long-term sustainability. As brokers and consultants look for innovative ways to support their clients, and as plan sponsors seek to balance rising costs with competitive benefit offerings, fixed-rate Rx and collective solutions deliver precisely what today’s plan sponsors need: stability, protection, and guarantees.
To learn how Benecard’s fixed-rate Rx solutions can safeguard your Rx benefit plans, we invite you to connect with us and explore a smarter path forward. Email us at talktous@benecard.com to get started.
Sources:
1 “Just 1% of employees drive nearly a third of all health care spending”, BenefitsPro
2 “86% of employers increased cancer care spend since last year”, BenefitsPro
Both the State Health Benefits Commission (SHBC) and the School Employees’ Health Benefits Commission (SEHBC) officially approved AON’s recommended premium increases for 2026. These approvals follow special hearings held last week, which members of the Benecard team attended to stay at the forefront of developments affecting our industry.
Key Takeaways from the Hearings
In July, we reported on the recommended premium increases from AON, the actuary for the State of New Jersey. With last week’s approvals, those recommendations are now official:
| SHBP – Local Government: +32.7% medical +62.9% prescription | SEHBP – School Boards: +27.9% medical +58.6% prescription |
In addition, both commissions discussed the possibility of implementing plan design changes for medical and Rx as early as 2026. While the scope and timing remain undetermined, this introduces new uncertainty for groups still in the State plans.
What This Means for Plan Sponsors
For plan sponsors, the message is clear: while the 2026 increases are now official, the uncertainty surrounding benefit design introduces another layer of risk. Local government and school board groups already face unsustainable premiums, and the possibility of mid-year changes only heightens the need to consider alternatives. Benecard can offer full risk protection and/or access to trusts or group purchasing organizations, providing greater stability and predictability. Moving sooner rather than later may help employers avoid the brunt of escalating costs and unpredictable plan design shifts.
Next Steps
Plan sponsors should review their most recent claims experience and census with their broker and obtain accurate quotes from private carriers.
If you are currently contracted with a broker, have them contact Richard Van Noord, Benecard’s Vice President of Sales, at (800) 734-9528 or talktous@benecard.com. If you do not have a broker, you can contact Richard directly to explore available solutions.
This update continues our ongoing GLP-1 intelligence series, helping you navigate the evolving pharmacy landscape. Following our recent updates on the oral GLP-1 pipeline and evolving market pressures, we now have concrete data from Eli Lilly’s orforglipron Phase 3 trial.
The Results: Promising But Nuanced
Eli Lilly announced last week that its oral GLP-1 drug, orforglipron, achieved 11.9% average weight loss in their 72-week study with the convenience of daily oral dosing and no dietary restrictions. However, tolerability challenges emerged with 10.3% of patients discontinuing due to side effects (vs. ~7% with current injections) and notable GI effects including nausea (34%) and vomiting (24%)1. With regulatory submission planned by end of 2025, we’re looking at a potential 2026 market launch.
What This Means for Patient Care & Plan Management
The data reinforces that oral GLP-1s represent genuine clinical progress but also confirms that thoughtful benefit design remains essential. While there are approximately 8 million patients on injectable obesity and diabetes drugs, around 170 million could benefit from the oral form1. Plan sponsors should adopt proactive management strategies to handle utilization growth of this magnitude.
Benecard’s Balanced Approach Rather than blanket exclusions, we help clients implement clinically informed strategies that balance patient access with cost sustainability. Our comprehensive approach includes an array of benefit modeling scenarios such as including coverage of non-oral GLP-1’s for weight loss for those with clinically severe obesity, defined treatment parameters, proactive positioning for emerging oral formulations, and centralized management through Benecard Central Fill for enhanced oversight and manufacturer copay access.
Sources: 1cnbc.com/2025/08/07/eli-lilly-obesity-pill-weight-los-trial.html
Recent headlines and industry surveys highlight a growing concern: navigating prior authorization is a significant challenge for patients, prescribers alike. Delays, administrative hurdles, and varying standards across health plans can complicate access to needed treatments. These headlines have sparked renewed scrutiny of a process that’s too often misunderstood and has prompted action at the highest levels — from federal agencies introducing new rules for faster, more transparent decisions, to congressional hearings calling for greater accountability.
At Benecard, we believe prior authorizations, which we refer to as “clinical reviews”, deserve a clear and balanced conversation. Yes, the system needs improvement. But clinical reviews also play a vital role. They help protect patients’ health and safety, ensuring they receive the most appropriate, safe, and effective care. They also ensure our employer plan sponsors pay for only those covered medications being used in accordance with FDA approved uses and/or supporting medical compendia.
WHY CLINICAL REVIEWS EXIST
There are over 20,000 prescription drugs on the market today, each with evolving FDA-approved uses, off-label applications, changing safety warnings, and potential interaction risks. This makes it impossible for prescribers to track every detail for every patient, especially when a patient sees multiple prescribers or has a complex treatment plan.
Clinical reviews address this gap by consolidating prescription information into a single system, enabling PBMs to identify and report key risks such as harmful drug interactions, duplicate therapies, and new safety concerns that may not be visible to a prescriber. This is not about questioning a prescriber’s expertise. It’s about supporting them with additional safeguards to ensure the clinical appropriateness, safety, and effectiveness of medications before they are approved and dispensed to the patient. Want to see a real-world example of how this works? Click the link below to read our case study which demonstrates why clinical reviews are essential for patient safety.
BENECARD’S COMMITMENT TO BETTER CARE & LESS RED TAPE
At Benecard, clinical reviews aren’t just an administrative checkbox; they are a critical safety net to make sure each patient receives the right drug, in the right dosage and quantity, at the right time.
Our patient-first philosophy focuses on protecting members and plan sponsors by ensuring safe and appropriate use of prescription medications. While cost savings often follow from these safeguards, clinical oversight of the patient’s safety is always our top priority.
One of the biggest frustrations we hear from members with prior authorizations is the waiting — not knowing where things stand, when a decision will be made or having to go through the process for the same drugs on a routine basis. We have invested heavily in technology and service enhancements to reduce friction, improve communication, speed up decisions and extend the approval duration:
Sources:
Americans say prior authorizations are a major problem, insurers vow to reduce burden
Recent headlines highlighted the Trump administration may be threatening to impose steep tariffs, potentially as high as 200%1, on imported prescription drugs. This is part of a broader initiative to reshore pharmaceutical manufacturing to the United States.
While this may sound alarming, there is no immediate cause for concern. At this time, these tariffs have not yet been enacted and, according to both Commerce Secretary Lutnick and President Trump’s statements, any tariff changes would not take effect for at least 12 to 18 months. This would place the possible implementation window between the latter half of 2026 or beginning of 2027. More details are expected to be forthcoming from the Trump administration.
The Benecard team is actively monitoring this development and we will continue to keep our healthcare professionals and plan sponsors apprised of any tariff policy announcements or news related to this matter from the Trump administration.
Contact us today at (800) 734-9528 or talktous@benecard.com to discuss how Benecard is helping employers tackle rising drug trends.
Sources:
1200% drug tariffs loom as Trump pushes reshoring of pharma manufacturing
Last week, AON presented its recommended 2026 premium increases to the State Health Benefits Commission (SHBC) and the School Employees’ Health Benefits Commission (SEHBC) — and the numbers are substantial for both medical and Rx premiums:
SHBP – Local Government:
SEHBP – School Boards:
These increases are still recommendations and are not yet finalized, but they reflect the ongoing financial instability in these plans which are consistent with the recent NJ State Department of Treasury report (see our recent article in case you missed it). We will continue to actively monitor this situation and will update you as soon as the SHBC and SEHBC vote on the final 2026 rates.
In the meantime, if your public sector clients are enrolled in the SHBP or SEHBP, now is the time to start evaluating alternative options. In this volatile market, Benecard’s fixed-rate prescription benefit model can offer greater predictability and stability.
Contact us today at (800) 734-9528 or talktous@benecard.com to learn more about our unique prescription benefit solutions.
The GLP-1 landscape continues to evolve rapidly, with new data revealing both expanding employer coverage and intensifying financial pressures. As we’ve highlighted in our ongoing GLP-1 series, understanding these trends, and implementing proactive management strategies, has never been more crucial for plan sponsors.
Recent data reveals a dramatic shift: 36% of employers now provide GLP-1 coverage for both weight loss and diabetes (1). While this reflects growing recognition of these medications’ value, it comes with serious cost implications. The use of GLP-1 drugs for weight loss currently represents 10.5% of total claims, and 27% of employers report GLP-1 drugs account for more than 15% of their annual drug spend (1). With oral formulations approaching FDA approval, the trend is accelerating.
Faced with these unprecedented cost pressures, more than three-quarters of employers now employ cost-control mechanisms (1), including:
Benecard has developed targeted benefit design features to help reduce the rising costs associated with brand-name GLP-1 drugs prescribed for weight loss while ensuring appropriate clinical care:
Plan sponsors implementing structured GLP-1 management today position themselves for long-term sustainability as this market continues to expand. Our fixed-rate Rx benefit solution provides the predictability you need while our innovative benefit designs help control utilization without compromising quality care.
Contact us today at (800) 734-9528 or talktous@benecard.com to explore customized GLP-1 management solutions.