LOCKTON'S POV
Global trends reflect continued high costs
Rising costs aren’t isolated to the U.S., and an increasingly complex and expensive global benefits landscape (with high costs driven by medical inflation, regulatory change, workforce expectations, and innovation) is influencing U.S. and multinational employers at a broad scale.
Medical inflation is rising across the globe
Global trends have now returned to double digits, with an average global increase approaching 12% in 2025. In some regions, including the Middle East and South Asia, projections are even higher — up to 16% to 18%.
GLOBAL MEDICAL TREND 2023-2025
Source: 2025 Trend Study; Lockton’s book of business
Healthcare costs are rising faster than general inflation in nearly every major talent market, driven by the structural costs of healthcare delivery, advances in treatment, increasing disease burden, and growing health awareness. In addition to the impact of general inflation on provider expenses, costs are being driven internationally by higher utilization rates, poor plan use, and ineffective care management.
Global cost dynamics broadly mirror those experienced in the U.S., with chronic conditions as top cost drivers, the prevalence of long-term behavioral and mental health treatment, high-cost specialty drugs, and new advanced therapies, such as biologics and gene therapies. But while new and high-cost medications and advanced medical technology are the second and third highest contributors to global cost increases, respectively, the direct impact of prescription drugs on plans varies significantly by country based on the interplay of social and private coverage, as well as the collective purchasing of pharmaceuticals and regulation of their costs. In regions like the Middle East where plans pay the entire cost of prescription drugs, pharmacy costs have a much more significant impact on employer-sponsored plans than in Europe where social systems carry much of the cost.
Additionally, it is common practice in many countries for plans to cover both inpatient and outpatient care at 100%, often without deductibles, copayments or other cost-sharing mechanisms that could be used to influence member behavior or directly lower premiums.
Trade policy uncertainty could drive further cost increases
Continued market pressures and tariff developments in the U.S. and at a global level are layering on top of an already high-cost environment.
Drug prices and availability are influenced by international pipelines and regulatory policies and approvals, while shifts in trade agreements affect import prices of both medical materials and pharmaceuticals. As these global trade dynamics continue to shift, employers could see additional cost pressures affecting their health plans.
Given the uncertain long-term implications surrounding trade policy, it is increasingly important for U.S. and multinational employers to monitor these developments closely and plan for continued inflationary pressure across the globe.
Rising healthcare costs are not just a U.S. challenge; they are a global reality not expected to ease.
And as global forces increasingly show up locally, U.S. employers could face new high-cost dynamics. Addressing these challenges with proactive benefit decisions that prioritize long-term value and cost management will be key for staying ahead of global pressures.
