What's driving prescription drug costs?

Prescription drug costs are one of the fastest-growing drivers of health care spending in North Carolina and across the country. In 2025, medical drug spending was Blue Cross NC’s largest cost driver, accounting for roughly one-third of total cost increases.

Prescription costs are weighing on families and employers across the state. More people are worried about paying for the medicines they need, and some are making hard choices, like skipping doses, waiting to fill a prescription or going without medication because of the cost.

Like the rest of the health care system, rising prescription costs aren’t random. Several forces are pushing costs higher, often in ways that aren’t visible to the people paying for them.

The hidden journey of a prescription dollar

A prescription medicine travels through a complex supply chain before it reaches a patient at the pharmacy counter.

Behind the scenes, manufacturers, wholesalers, pharmacies, and pharmacy benefit managers (PBMs) – the companies that negotiate drug prices and manage prescription coverage on behalf of health plans and employers – all play a role.

Prescription drug pricing is complex, with different prices possible at different points in a drug’s journey from the manufacturer to the pharmacy counter. Many factors can affect the cost of medication along the way; this complexity can make it difficult to understand what is driving prescription drug costs and where opportunities exist to make medications more affordable.

Innovation can come at a cost

Many breakthrough medications are changing lives. Breakthrough therapies are helping people manage complex and chronic conditions that had few treatment options just a decade ago.

But that innovation often comes at a price. Specialty medications now account for roughly half of all pharmacy spending while making up only a small share of prescriptions filled. Spending on specialty and infused medications is projected to keep growing by more than 10% annually.

The harder question is how to keep these treatments within reach for the people who need them, and how to build a system that can sustain them over time.

Why competition matters

Many people have experienced how competition is supposed to work in pharmacy. A brand-name drug's patent expires, generic versions arrive, and the price drops.

That dynamic is one of the most effective cost controls in health care: generic medications account for about 90% of prescriptions filled in the US, and they cost less here than in most other high-income countries.

But for the most expensive medications, that competition – and the cost reduction that comes with it – may never arrive.

Today's highest-cost treatments – including injected and infused therapies for cancer and autoimmune conditions – are far more difficult and expensive to copy than a standard pill. Even after patent protections expire, it can take years before lower-cost alternatives become available, and when competition is limited, prices stay high longer for patients, employers, and health plans alike.

What is Blue Cross NC doing about it?

As the only North Carolina-based not-for-profit health insurer offering coverage in all 100 counties, Blue Cross NC is working to slow the rise of prescription drug costs while improving access to the medications people need.

Lowering costs for members today

We invest in programs that lower what members pay for their medications today, across the counter, the pharmacy, and the specialty categories driving the most cost.

Through More Than A Script, we work with independent pharmacists across North Carolina to provide personalized support for chronic conditions like diabetes and hypertension between doctor visits. More than 100 independent pharmacies participate, with 84.8% of enrolled members meeting their health goals and $1.58 million in cost savings to date.[D]

We also look for ways to reduce what members pay at the counter. RightPrice Rx[D] automatically applies our lowest available discount card price on covered prescriptions, and our program with Sempre Health rewards members for refilling prescriptions on time, saving more than $4.2 million across 17,000 enrolled members.[D]

Our Value Optimizer offering provides copay assistance for specialty medications, saving eligible members an average of more than $120 per year.

Rethinking how pharmacy benefits work

Much of the complexity described above is built into the standard way pharmacy benefits are structured.

We’re taking a different approach through CurateRx,[D] our new pharmacy solution. CurateRx is a flexible pharmacy operating model that combines Blue Cross NC's in-house pharmacy expertise with a portfolio of strategically selected partners, all managed under Blue Cross NC oversight.

Rather than accepting a single, one-size-fits-all package, employers can select the components that fit their workforce, allowing for more customization and more flexibility in plan design.

And because the model is built in separate pieces rather than bought as one package, Blue Cross NC has clearer visibility into where dollars are going across the supply chain. It’s built to give employers more choice and more accountability from the vendors involved, and to evolve as their needs change over time.

This work reflects a broader belief: if the current structure is what drives up cost, then changing that structure has to be part of the solution.

Driving change together

Supply chain complexity, limited competition, and the rising cost of specialty medications are embedded in how prescription drugs move through the system today. Together, they make costs harder to see, harder to predict, and increasingly difficult for families and businesses to manage.

Slowing the rise of prescription costs will require greater transparency, stronger accountability, meaningful competition, and a willingness across the health care system to reimagine a system that better serves members, employers, and communities.

We're committed to this work, and we'll keep pushing ourselves and others to do their part.