Prescription drug spending in the United States, net of rebates and discounts, grew 11.4% in 2024, up from 4.9% growth the prior year, according to IQVIA data cited by the Congressional Budget Office. That acceleration puts significant pressure on organizations managing specialty drug budgets to understand not just what they’re spending, but what they’re actually spending net of every available offset.
That understanding starts with one question: when your organization refers to its specialty drug net cost, what’s actually in that number?
What PSG’s Data Shows
PSG’s 2026 Trends in Specialty Drug Benefits Report asked respondents directly whether they can track actual specialty drug net drug cost inclusive of rebates and discounts. 78% said yes. That means roughly 1 in 5 organizations, across employers and health plans, cannot track this figure at all.
The breakdown matters: 84% of health plans can track it, compared to 75% of employers. The gap between health plans and employers reflects, in part, that health plans tend to have more structured reporting infrastructure. But even among health plans, 16% are operating without a reliable net cost figure for specialty drugs.
For organizations that can track net drug cost, the follow-on question is equally important: is the figure being tracked actually complete?
What Goes Into Net Drug Cost — and Where Gaps Typically Appear
Net drug cost is not a single data point. It reflects the result of layering several distinct inputs: the price paid at acquisition, reimbursement received, any contractual arrangements through GPOs or other purchasing vehicles, and manufacturer rebates, which under the medical benefit operate on different timelines, different eligibility requirements, and different submission processes than their pharmacy counterparts.
A 2023 study of 10 large pharmaceutical manufacturers found that manufacturers’ net price was on average 52.1% lower than list price, reflecting the cumulative impact of price concessions across channels. Research presented at the AMCP Nexus 2025 conference found a median rebate of $29,400 per specialty drug — equivalent to a 28% discount off list price, across 161 specialty drugs analyzed. These figures illustrate how substantially rebates can affect the difference between list price and actual net cost, and how consequential it is whether those rebates are captured and included in the calculation.
The medical benefit is where the net cost picture is most frequently incomplete. As documented in PSG’s survey, only 51% of organizations receive specialty drug rebates under the medical benefit, compared to 93% under the pharmacy benefit. For the half of organizations not receiving medical benefit rebates, the rebate layer of the net cost calculation on the medical side is simply absent, not zero, but unaddressed. The net cost number being used may reflect pharmacy benefit economics reasonably well while leaving the medical benefit largely unreconciled.
Why This Matters for Planning
Net drug cost is the foundation of consequential decisions: actuarial modeling, benefit design, trend reporting, vendor negotiations, and budget projections. A figure that is incomplete on the medical benefit side, either because rebates aren’t being captured or because the medical benefit layer isn’t being included in reporting, means those decisions are built on an estimate rather than a complete accounting.
This isn’t a compliance issue. It’s a financial planning accuracy issue. And in an environment where specialty drug spending net of rebates grew over 11% in a single year, the margin for imprecision is narrower than it’s been.
The gross-to-net landscape is also shifting. Drug Channels’ analysis from late 2025 documented that some manufacturers began reducing list prices in 2025, which compresses the spread between list and net, meaning the rebate layer that historically inflated gross-to-net differentials may look different going forward. Organizations that have been reporting net cost using approximations built on historical list-price-minus-rebate calculations may need to revisit those assumptions as the pricing landscape evolves.
What to Watch
1. Transparency expectations are rising on both benefits. Regulatory direction under the CAA 2026 has established rising standards for pharmacy benefit cost reporting. As those expectations mature, the medical benefit, where net cost reporting is less structured, will face increasing scrutiny. Organizations whose net cost figures can’t be explained and defended across both channels will feel that pressure first.
2. The 22% who can’t track net drug cost represent a planning risk, not just a reporting gap. PSG’s data shows that 1 in 5 organizations cannot track actual specialty drug net cost inclusive of rebates and discounts. For those organizations, budget projections for specialty spend are built without a complete cost baseline, which creates exposure in any year where specialty trend accelerates.
3. Health plans score better than employers, but meaningful gaps remain at both levels. 16% of health plans and 25% of employers cannot track specialty drug net cost. For TPAs serving self-funded employer groups, the employer’s inability to track net cost may not be visible until a cost review or audit surfaces the discrepancy.
4. The shifting gross-to-net dynamic warrants a reassessment of existing assumptions. As list prices for some specialty drugs decline and the rebate structures attached to them change, net cost calculations built on prior-year assumptions may not hold. Periodic reassessment of what’s actually included in the net cost figure, across both benefits, is a reasonable planning practice regardless of current reporting capability.
The Practical Question
The most useful near-term exercise for most organizations isn’t a full reporting rebuild. It’s a more focused review: when the net cost figure for specialty drugs is reported internally, what inputs is it actually drawing from, and does that include the medical benefit rebate layer?
For organizations where the answer is unclear, that uncertainty is itself informative. A net cost figure that can’t be explained input-by-input is difficult to defend in leadership conversations, vendor negotiations, or planning reviews where financial precision matters.
PSG’s data puts a number on how common this situation is. The more useful question is whether your organization is on the right side of it.
When your organization references specialty drug net cost in budget or planning conversations, how confident is your team in what’s actually included in that figure? We’d like to hear what you’re seeing in practice.
Disclaimer: This newsletter references publicly available findings from Pharmaceutical Strategies Group’s 2026 Trends in Specialty Drug Benefits Report, as well as publicly available research from the Congressional Budget Office, IQVIA, the American College of Clinical Pharmacy (AMCP), Global Legal Insights, and Drug Channels. VativoRx is not affiliated with, endorsed by, or partnered with any source referenced. All data points are cited objectively from publicly available sources for informational purposes only. This newsletter does not constitute legal, regulatory, clinical, or financial advice. Rebate eligibility, net cost calculation methodologies, and outcomes vary significantly by organization, program terms, payer contracts, and applicable laws and regulations. Readers should consult their legal, compliance, and financial advisors regarding specific circumstances.
