Rising stop loss premiums are putting new pressure on self funded employers and the brokers who advise them. Many plans are seeing increased renewal rates, driven in part by specialty pharmacy costs, GLP-1 utilization, unpredictable large claims, and emerging cell and gene therapies.1
While Pharmacy Benefit Managers (PBMs) do not set stop loss premiums, the way a PBM manages drug cost, utilization, specialty therapies, and reporting can directly influence the risk profile a stop loss carrier evaluates at renewal.
The Connection: Pharmacy Spend Drives Stop Loss Risk
Stop-loss coverage is designed to protect employers from catastrophic claims, which are high-cost, unpredictable events that exceed a set threshold.
Today, many of those catastrophic claims are attributable to:
- Specialty medications (e.g., oncology, autoimmune therapies)
- Gene and cell therapies
- High-cost chronic treatments
The scale of the risk is clear: specialty medications represent a small share of prescriptions but account for more than half of total pharmacy spend for many employer health plans. These therapies are among the fastest-growing drivers of employer healthcare costs and can contribute to the large claims that affect stop loss reimbursement and renewal pricing.1
The same pharmacy claims managed by a PBM are often the ones that determine stop loss performance.
Where PBMs Fit Into the Risk Equation
PBMs do not set stop loss premiums, but they directly influence the risk profile that stop loss carriers underwrite in three critical ways:
1. Controlling the Cost of High-Impact Drugs
PBMs manage formularies, negotiate drug pricing, and guide utilization toward lower-cost generics, biosimilars, clinically appropriate therapies, and cost-effective treatment pathways.
These strategies matter because specialty drugs, GLP-1 therapies, and other high-impact medications are creating new budget pressure for employer plans. When utilization rises quickly, even a small number of claims can materially affect pharmacy trend and stop loss exposure.
The PBM’s approach matters because formulary management is only as effective as its clinical strategy, pricing model, transparency, and alignment with the plan sponsor’s goals. Misaligned incentives can keep higher-cost drugs preferred even when lower-cost, clinically appropriate options are available.
For employers, that difference can directly affect drug spend, specialty trend, member affordability, and downstream stop loss risk.
2. Managing Utilization Before Claims Escalate
PBMs implement clinical and utilization management programs such as prior authorization, step therapy, and quantity limits to support appropriate medication use. They may also use clinical therapy management and adherence programs to identify high-risk members earlier, reduce duplicate therapies, and address utilization concerns before costs accelerate. The PBM’s approach matters because these tools are most effective when applied consistently, clinically, and in alignment with the plan sponsor’s goals.
When managed well, these strategies can reduce avoidable high-cost claims and help limit the “shock claims” that drive renewal increases.
3. Providing Data and Visibility for Better Risk Management
PBMs generate reporting on drug utilization trends, high-cost utilizers, emerging therapy pipelines, and opportunities for intervention. That visibility is increasingly important as cell and gene therapies advance.
Mercer, a global consulting firm, reports that many gene therapies are priced above $1 million per treatment, with some costing $2 million to $3 million; cell therapies commonly cost about $400,000 to $500,000 before related administration costs.2 Without early visibility into these costs, employers may not see a high-cost claim coming until it hits the claims fund.
This exposure is especially consequential in self-funded plans, where pharmacy claims flow directly through the employer’s claims fund, and PBM decisions help determine how much of that spend is actually incurred.
A transparent PBM with claim-level reporting can support more accurate underwriting discussions, improve cost predictability, and help brokers and employers get ahead of these risks before they materialize.
Why PBM Performance Matters at Stop Loss Renewal
At renewal, stop loss carriers evaluate pharmacy trend, large-claim drivers, and the effectiveness of pharmacy management strategies. Plans with strong specialty management, transparent reporting, and controlled utilization may be viewed as more predictable and better managed.
Conversely, employers with limited specialty oversight, poor transparency, or unmanaged utilization may face higher increases, tighter contract terms, or additional risk-sharing mechanisms.
What Brokers and Employers Should Evaluate
To determine whether pharmacy strategy is supporting stop loss performance, brokers and employers should ask their PBM targeted questions in four key areas.
Transparency and alignment
- Are drug costs clearly defined at the drug level and auditable?
- Are rebates and discounts passed through?
Specialty drug management
- What strategies are in place for high-cost therapies?
- How are biosimilars and alternatives evaluated and implemented?
Clinical management programs
- How are high-risk members identified and supported?
- What controls are in place to prevent unnecessary utilization?
Data and reporting
- Does your PBM help you clearly see your pharmacy trend and large claim drivers?
- Are insights actionable for both plan management and underwriting discussions?
The Bottom Line
Pharmacy spend, especially specialty drugs, is a primary driver of the catastrophic claims that stop‑loss coverage is designed to protect against.
PBM strategy is no longer separate from stop‑loss strategy. It is a direct input that can help plans reduce volatility, improve cost predictability, and support more sustainable performance.
How ClearScript Can Help
ClearScript helps brokers and employers bring greater clarity, control, and confidence to pharmacy benefit management. Through transparent pricing, clinically grounded utilization management, specialty drug oversight, and actionable reporting, ClearScript helps plan sponsors identify cost drivers, manage high-impact therapies, and prepare for more informed stop‑loss renewal conversations.
Ready to better understand how your pharmacy strategy may be influencing stop‑loss risk? Connect with ClearScript to review your current PBM approach, identify opportunities for improvement, and build a strategy that supports more predictable, sustainable plan performance.
You can also explore ClearScript’s article, Your Guide to Managing Trend in 2026, for additional strategies to help plan sponsors understand, manage, and communicate pharmacy trend.