Employers turn on their PBMs as healthcare costs near a two-decade high

US employers are heading into 2027 benefit renewals with healthcare costs projected to rise at their fastest pace in nearly two decades and deepening frustration with the vendors managing their pharmacy spend.

The WTW 2026 Best Practices in Healthcare Survey found that employers project healthcare costs will rise 11.1% in 2027 before plan changes, and 9.7% after them, just 1.4 percentage points lower. That gap between pre- and post-change trend reflects a central finding of the report: traditional plan design adjustments are doing less of the work than they used to. In the three preceding WTW surveys, the gap between pre- and post-change trend held at 1.0 to 1.1 percentage points; this year it is 1.4 points on a before-change trend nearly three points higher than last year. The survey, now in its 30th year, drew on responses from 471 US employers with at least 100 employees, covering seven million workers.

Pharmacy is where the pressure is concentrated.

Pharmacy costs are expected to rise 11.5% in 2026, up from 9% in 2025. When drugs administered through medical benefits are included, WTW estimates pharmacy accounts for approximately 36% of total employer healthcare claims. Nearly half of employers (49%) now say significant changes to their healthcare programs will be necessary within three years, up sharply from 34% the year prior.

“Pharmacy has moved from a line item to the center of the healthcare cost conversation,” said Jeff Levin-Scherz, population health leader for North America at WTW. “GLP-1s, specialty drugs and gene therapies can change patients’ lives, but the costs of these advances are hard to sustain.”

PBM satisfaction collapses

The pharmacies and the drugs themselves are one part of the problem. The entities that manage pharmacy benefits are becoming another.

The Net Promoter Score for pharmacy benefit managers fell from -10 in 2024 to -25 in 2026, driven by declines across every dimension WTW measured. Confidence in PBM pricing, rebate program quality, and coordination with medical carriers all dropped by double digits. Sixty-four percent of employers have taken action, are planning to, or are actively considering changes to their PBM relationships, including taking contracts out to bid and evaluating alternative PBMs.

That sentiment is already showing up in market behavior. A separate survey of 408 employers by the National Alliance of Healthcare Purchaser Coalitions, published in August 2026, found the share using one of the three largest PBMs - CVS Caremark, Optum Rx and Express Scripts - fell nine points in a single year, from 63.4% to 54.3%.

The movement was concentrated among smaller employers, and the trend is feeding a broader reshaping of the PBM market ahead of significant regulatory change.

The Consolidated Appropriations Act of 2026, signed into law on February 3, requires PBMs to pass through 100% of rebates and related remuneration to ERISA-governed group health plans, a provision that takes effect for contracts entered into or renewed for plan years beginning on or after August 3, 2028. That requirement raises the fiduciary stakes for employer plan sponsors, and by extension, for the advisors who help them evaluate whether their pharmacy arrangements are reasonable and defensible. The standard of care around PBM oversight for self-funded plans has shifted, and the 2027 renewal cycle is the first full test of what that means in practice.

Vendor accountability broadens

The scrutiny extends beyond PBMs. The average employer now works with 13 health and wellbeing vendors, up from 11 in 2022.

Yet only 34% evaluate the clinical impact of their point solutions, and 42% the financial impact. Against that backdrop, employers are tightening their grip on the broader vendor landscape. The share planning to take health plans or vendors out to bid rises from 39% today to 84% by 2028, the share evaluating fraud, waste and abuse climbs from 23% to 55%, and the share planning to cut back vendor numbers more than doubles, from 14% to 38%.

GLP-1 coverage is part of the same accountability reckoning. The share of employers covering GLP-1 medications for weight loss declined for the first time in three years, from 57% to 53%, with cost cited by 91% of those who dropped or are considering dropping coverage. The pullback follows a period of rapid GLP-1 cost escalation, with pharmacy now accounting for approximately a quarter of total employer healthcare spend.

Eighty percent of employers say they prefer long-term, multiyear solutions over immediate savings. The direction the WTW data points toward is accountability over addition, scrutinizing what existing vendors are delivering rather than layering on new programs.

“Employers need a multi-year strategy with finance at the table,” said Courtney Stubblefield, strategy and specialty leader for health and benefits at WTW. “Employers should start by asking whether they are getting enough value from the money already being spent.”