Reducing Pharmacy Spend by Spending Smarter

Managing pharmacy costs is important, and it can be achieved through multiple approaches, including negotiating prices (i.e., rebates) and optimizing utilization. However, reducing total pharmacy costs can also come from prioritizing increased utilization in the right areas. Instead of consistently restricting use, organizations should look for win-win opportunities where strategic pharmacy investments drive better outcomes and lower overall spend. One example is optimizing the delivery and utilization of diabetic supplies, such as continuous glucose monitoring (CGM). While costs in this category may increase, Total Pharmacy and Total Cost of Care should decline over time as outcomes improve. This approach is supported by research showing that patients with type 2 diabetes who routinely use CGM experience significantly greater reductions in HbA1c compared to those who do not use it, with the highest-use group seeing a 1.52 percentage point reduction at 12 months versus 0.63 in non-users (Hirsch et al., 2025).

Hirsch, I. B., Garg, S. K., Repetto, E., et al. (2025). Continuous glucose monitoring frequency and glycemic control in people with type 2 diabetes. JAMA Network Open, 8(10), e2539278. https://doi.org/10.1001/jamanetworkopen.2025.39278