Exception Pathways, In-Benefit Optimization: Two Approaches to Specialty Savings

Specialty medications continue to expand what is clinically possible while placing increasing pressure on employer and health plan budgets. Federal health spending data show U.S. prescription drug spending reached $467 billion in 2024, rising nearly 8% year over year. Specialty trend now drives a disproportionate share of total pharmacy spend, forcing plan sponsors to evaluate multiple cost-containment strategies simultaneously.

In response, many employers and advisers have adopted alternative funding programs (AFPs) as a targeted way to manage exposure to a narrow set of ultra-high-cost specialty drugs. When applied intentionally, these models can generate meaningful savings, particularly where traditional benefit designs struggle to absorb rapid unit-cost escalation.

AFPs operate by redirecting access to select medications through nonstandard pathways, such as manufacturer assistance programs or alternative sourcing arrangements. When executed well, they can reduce unit cost and protect the broader benefit from catastrophic claims.

At the same time, AFPs introduce an operational model that differs from traditional in-benefit management. Because access is managed outside the standard pharmacy benefit, these programs typically require additional coordination among members, prescribers, specialty pharmacies and third-party vendors. That coordination changes how access is administered and how operational responsibility is distributed.

Understanding AFP tradeoffs

AFP models vary widely, but several common considerations tend to shape outcomes:

• Execution sensitivity: Savings depend on consistent vendor performance and timely coordination across multiple parties.
• Operational variability: Nonstandard access pathways can introduce differences in communication, timing and member experience.
• Clinical oversight requirements: Prescriber engagement and documentation are essential to maintaining therapy continuity.
• Regulatory and audit considerations: Exception-based models require clear guardrails and defensible documentation.

These factors do not negate the value of AFPs. They define where careful oversight and complementary strategies matter most.

In-benefit optimization: Addressing portfolio-wide inefficiency

In-benefit optimization takes a different approach. Rather than rerouting access, it focuses on reducing waste and inefficiency within the existing pharmacy benefit.

Common sources of in-benefit savings include:

• Duplicative or overlapping therapies.
• Inappropriate dosing duration or regimen complexity.
• Oversupply and avoidable refill patterns.
• Missed opportunities for clinically appropriate lower-cost alternatives already available in-network.

This approach emphasizes physician-directed execution within normal clinical workflow and alignment with existing pharmacy benefit manager and carrier structures. By working inside established processes, in-benefit optimization preserves continuity for both members and prescribers while producing savings that are repeatable and measurable.

How these strategies work together

Exception-based funding models and in-benefit optimization are not competing solutions. They address different cost drivers and are often deployed together.

In practice:

• AFPs are most effective for managing targeted exposure tied to a limited number of high-cost therapies.
• In-benefit optimization delivers durable savings across the broader medication portfolio, independent of funding model.

Layered thoughtfully, these approaches allow plan sponsors to balance targeted cost relief with system-wide stability.

What employers actually need: Durable, defensible savings

The most sustainable specialty savings strategies tend to share several characteristics:

• Preserve therapy continuity.
• Minimize unnecessary administrative burden for members and prescribers.
• Operate within clear regulatory and supply frameworks.
• Produce savings that are measurable, explainable and defensible.

Many of the largest cost drivers exist inside the benefit itself, regardless of whether AFPs are used. Addressing those drivers requires disciplined execution and clear clinical alignment.

Operationalizing a balanced strategy

Plan sponsors can strengthen specialty savings outcomes by:

• Pinpointing concentration: Identify the small number of drugs, classes or conditions driving disproportionate spend and validate appropriate use.
• Auditing for waste signals: Look for duplication, oversupply, regimen complexity and avoidable utilization.
• Pressure-testing disruption: Evaluate time-to-therapy, communication burden and continuity risk before changing access pathways.
• Strengthening prescriber-facing execution: Prioritize approaches that fit into clinical workflow and support clinician decision-making.
• Defining defensibility up front: Ensure strategies are easy to explain to members, clinicians, auditors and regulators.
• Measuring beyond dollars: Track adherence, continuity, grievances and avoidable escalations alongside net cost.

The real decision in front of plan sponsors

Health plan sponsors face a genuine affordability challenge. The decision is not whether to pursue savings, but how to layer strategies responsibly.

AFPs can play a meaningful role in managing high-cost exposure. In-benefit optimization addresses inefficiencies that exist regardless of funding model. When evaluated together, these approaches support affordability while preserving stability across the benefit.

Savings are most sustainable when cost control aligns with clinical appropriateness and continuity of care. That alignment protects both the benefit and the member experience.

Ryan Czado, PharmD, MBA, is chief pharmacy officer, RazorMetrics