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    How multifamily offices are playing commercial real estate

    With more than $12 billion under management, Realm is a multifamily office investment platform specializing in commercial real estate.
    The typical family using Realm has about $200 million in investable assets.
    CEO Travis King tells CNBC about his favorite real estate plays, what he’s staying away from and how he views the high-interest rate environment.

    A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.
    The family offices of high-net-worth investors are increasingly pouring their money into alternatives, and real estate is high on their list. For some, instead of going it alone, they’re joining forces in multifamily offices.

    The multifamily office model lets these investment arms of wealthy families pool resources, share expertise and unlock bigger deals. With more than $12 billion under management, Realm is a multifamily office investment platform specializing in commercial real estate. The typical family using Realm has about $200 million in investable assets.
    CNBC spoke with its CEO, Travis King. Here are some highlights from the conversation, edited for length and clarity: 

    Property Play: Why go multifamily?

    Travis King: We are better investors collectively than we would be individually. So what that means is we’re combining not only capital, but also our collective trusted relationships and industry knowledge and geographic knowledge to find and execute better investment decisions.
    You’ve seen big allocations amongst the institutions. They’ve all grown their real estate allocations, in some cases, from low single digits to, in some cases,10% or more allocation-wise. You still don’t see that with a lot of the family offices, although there’s a strong desire to do so. 

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    So I think that next horizon is going to be finding ways to access direct real estate with these families that will allow them to be able to diversify a little bit more and enjoy some of those benefits of real estate that have been a little bit elusive unless you wanted to actually buy that real estate yourself, which can tend to be very time intensive, for sure, and, a lot of times, requires a pretty large dedicated staff.

    PP: How do you play real estate?

    TK: Real estate is evolving, right? There’s never one thing that you want to be focused on in real estate. I think that’s part of what gives us a leg up. … You’ve heard the adage ‘location, location, location,’ and that’s true. I think that continues to be a very true adage. What we find is that we’re unique in that we move across property type and across geography. So given the scale that we have as an organization with, I think collectively, north of $12 billion in investable assets amongst these families that we work with, we have the ability to see a lot of different deal flow in a lot of different areas. 
    In real estate, there’s a macro-cycle, and that cycle is always very important. You don’t want to swim against the tide. You also don’t want to, you know, try to fight the cycle. But there’s micro-cycles that happen in different geographies and within different property types, so that’s a key thing to consider.

    PP: So of the many CRE sectors, what’s your fave?

    TK: If you look at this point in time, what we think is interesting, you’ll start with office. I think in a lot of areas, we’re starting to see office really be in an area where we think that pricing has kind of bottomed. And you know that because when we start looking at some of these investment decisions — we’re looking at one right now in Northern California — it becomes less of, ‘Hey, would we like this if it were just a little bit cheaper?’ And it starts to get to the point where that’s not really the question anymore. It really gets down to saying, ‘We know it’s cheap. It’s intrinsically cheap.’ In some cases, we’re buying things at 15% of replacement cost. 

    Realm CEO Travis King
    Courtesy of Realm

    PP: What are you staying away from?

    TK: What I try to stay away from are broad categories, right? Say, for example, like, well R&D or industrial is going to be over. These things cycle, and there’s going to be different points in time. So I think the market, by and large … they look at things and say, ‘OK, data centers, you know,  they’ve been over invested, and now there’s too much capital in data centers.’ We particularly were, we’re not really in data centers in a large way, because we focus on that lower middle market. 

    PP: Isn’t everybody in data centers?

    TK: Yeah, but it’s the big boys in data centers, right? I’m trying to find an angle where we have something that others don’t. If you look at the big boys that have got tens of billions of dollars in their fund to be able to invest, there’s a lot of dollars required to do the infrastructure in the data center. We really focus on, kind of $50 million deals and below, because we feel like we’ve got an edge there. So yes, everyone is in data centers, but it’s one of those things where a lot of people are saying, ‘Wow, there’s a lot of money chasing this. It might be late in the cycle.’ I tend to probably agree with that, but it’s also just outside of the realm of where we’re trying to invest.

    PP: How does your business change if interest rates come down?

    TK: I would say reducing interest rates helps real estate in most every regard. I think first and foremost, it’s going to help transaction volume. I think it just provides a wind to the sails of transactions, and it raises the value of all real estate. More

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    Fintech firm Lendbuzz to file for IPO

    Lendbuzz, an auto finance fintech company, is planning to file an IPO prospectus as soon as Friday, according to people familiar with the matter. 
    The Boston-based company is targeting a valuation of around $1.5 billion, according to one of the people.
    Lendbuzz is looking to go public amid a wave of fellow fintech companies.

    Traders work at the New York Stock Exchange on Aug. 29, 2025.

    Lendbuzz, an auto finance fintech company, is planning to file an IPO prospectus as soon as Friday, according to people familiar with the matter. 
    The Boston-based company is targeting a valuation of around $1.5 billion, according to one of the people, who asked not to be named discussing internal matters. That valuation may change as Lendbuzz and its advisors hold discussions with investors. 

    The decade-old company uses alternative data and machine learning algorithms to assess the creditworthiness of consumers with limited financial history. Lendbuzz’s loans are funded by asset-backed securitization, warehouse loans from traditional banks and through the sale of portfolios to institutional investors – mainly insurance companies – that are looking for yield. 
    Lendbuzz is aiming to go public amid a wave of fellow fintech companies. Klarna and Chime have each gone public in the last three months. Chime is trading below its initial public offering price, while shares of Klarna are about 7% higher than its IPO, priced earlier in the week. 
    Goldman Sachs and JPMorgan are managing Lendbuzz’s offering, according to the people familiar.
    Lendbuzz, Goldman and JPMorgan declined to comment. 

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    How ultra-rich families invest in sports, from major leagues to social clubs

    Half of family offices have invested in sports or would like to, according to a new survey by Goldman Sachs.
    That said, investment firms of the ultra-wealthy expressed little interest in women’s sports and emerging leagues.
    Many family offices are spreading their bets to capitalize on multiple revenue streams and hedge against inflation.

    SEATTLE, WA – SEPTEMBER 07: George Kittle #85 of the San Francisco 49ers celebrates with fans and teammates after scoring a touchdown against the Seattle Seahawks during the game at Lumen Field on September 07, 2025 in Seattle, Washington. (Photo by Robin Alam/Icon Sportswire via Getty Images)
    Icon Sportswire | Icon Sportswire | Getty Images

    A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.
    While ultra-wealthy families and their investment firms are investing in fewer startups, they are still clamoring for a piece of the action when it comes to sports. 

    According to a new survey by Goldman Sachs, 25% of family offices have invested in sports or related assets like ticketing or arenas, and another quarter are interested in doing so.
    Last week, Julia Koch, the widow of billionaire David Koch, and her family agreed to buy a minority stake in the NFL’s New York Giants, according to Bloomberg. In June, Guggenheim Partners CEO and billionaire Mark Walter reached a deal to buy a majority stake in the NBA’s Los Angeles Lakers at a valuation of $10 billion. And a trio of Bay Area families, including venture capitalist Vinod Khosla’s, bought a 6% stake in the San Francisco 49ers in May.
    However, while women’s leagues and emerging sports like pickleball have garnered more buzz, investor appetite hasn’t caught up, according to the bank’s survey. Only 19% of 245 family offices said they had invested in or are interested in investing in women’s established leagues, while 71% expressed interest in major men’s leagues. A smaller percentage (16%) indicated past investment or interest in women’s emerging leagues or men’s minor leagues.

    There are some high-profile examples, with a cohort of billionaire investors securing three new WNBA team franchises in June. However, these investors are betting on future equity growth rather than cashflow for financial return, as previously reported by CNBC’s Alex Sherman.
    Goldman Sachs’ Meena Flynn told Inside Wealth that family offices, which invest for the long term, can afford to be patient with team ownership, no matter what kind of sports they’re getting into.

    “It really combines their interests from a passion perspective as well as long term value creation,” she said.

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    Moreover, family offices see sports as hedges against inflation since they have multiple revenue sources such as streaming rights and ticketing, according to Flynn, Goldman Sachs’ co-head of global private wealth management.
    Many major league owners are growing their sports empires by investing in other sports and related enterprises, such as Blackstone’s David Blitzer, the first person to own equity in all five major men’s U.S. sports leagues. This year alone, his family office Bolt Ventures has backed Fantasy Life, a sports betting media firm; Ballers, a chain of social clubs for racket sports; and club operator Padel Haus. More

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    China warns Mexico to ‘think twice’ before raising tariffs, threatens countermeasures

    Mexico plans to raise tariffs on vehicles coming from Asia, particularly China, to 50%.
    We “hope Mexico will be extremely cautious, and think twice before acting,” China’s Ministry of Commerce said in a statement late Thursday, translated by CNBC.
    Mexico’s auto industry is the country’s largest employer, Jorge Guajardo, Washington, D.C.-based partner at Dentons Global Advisors, previously told CNBC. He is a former ambassador of Mexico to China.

    The Leopard 8 is one of the three cars BYD’s Fang Cheng Bao brand unveiled in Shenzhen on April 16, 2024.
    CNBC | Evelyn Cheng

    BEIJING — China’s Ministry of Commerce has warned Mexico of countermeasures as the country plans to hike tariffs on Asia-made cars to 50%.
    We “hope Mexico will be extremely cautious, and think twice before acting,” the ministry said in a statement late Thursday, translated by CNBC.

    “China and Mexico are mutually important trade partners,” the ministry said. “We are not willing to see both sides’ economic cooperation affected by this situation.”
    Mexico’s Secretary of Economy Marcelo Ebrard told reporters Wednesday that the country planned to raise tariffs on vehicles coming from Asia, particularly China, to 50% from the current 20%. The increased duties still need Congressional approval, and the tariffs would take effect 30 days later, he said.
    “China will take necessary measures … to resolutely safeguard its legitimate rights and interests,” China’s statement read.
    Faced with “U.S. abuse of tariffs,” countries should safeguard free trade, China said. “The coercion of others should never sacrifice third-party interests.”
    Mexico’s planned China tariffs are part of a broader federal budget proposal that would affect $52 billion worth of the country’s imports, according to a report from The Wall Street Journal.

    In the ongoing trade tensions with the U.S., China’s countermeasures have included restrictions on exports of minerals critical to the production of cars and other advanced technology. Chinese companies have come to dominate the supply chain for many of those minerals.
    Sitting on the southern border of the U.S., Mexico benefits from the United States-Mexico-Canada Agreement (USMCA) for tariff-free trade among the countries. But USMCA, which took effect in 2020, requires a far greater portion of a vehicle to be made in the region than the North American Free Trade Agreement agreement it replaced.

    Mexico’s auto industry is the country’s largest employer, Jorge Guajardo, Washington, D.C.-based partner at Dentons Global Advisors, previously told CNBC. He is a former ambassador of Mexico to China.
    “At 50 percent, the tariffs are lower than the 60 percent tariffs Russia applies to Chinese cars,” Guajardo told CNBC in an email Friday. “I have yet to see China label the same accusations [of coercion] on Russia or Brazil, I assume that’s a tacit agreement that they understand there is no appetite in the world to absorb China’s excess capacity.” Brazil in July announced tariffs of 35% on electric-car imports.
    Excess supply was a reason why global trade existed, a Chinese official told CNBC last year, adding that that if China was producing too many electric cars, other countries dominated in global exports of liquefied natural gas, agricultural products and high-end semiconductors.
    From June 2022 to July 2024, more than 20 Chinese auto parts and manufacturers have announced over $7 billion in investments in Mexico, according to the Coalition for a Prosperous America, an advocacy group.
    It’s unclear how many of the projects have been completed. Chinese electric car giant BYD has notably not yet built a long-awaited factory in Mexico.
    The central American country has been China’s top destination for car exports, according to China Passenger Car Association figures earlier this year.
    “The thing that’s very important about Chinese autos is that where they’re taking market share, a lot of times, it’s not really from the Western brands. It’s really from the other Asian brands. I think that’s what we’ve seen in Mexico,” Eugene Hsiao, Macquarie Capital, head of China equity strategy, said on CNBC’s “The China Connection” earlier this week, ahead of Mexico’s latest tariff announcement.
    But even with hints of a 25% increase in duties at the time, Hsiao said that he expected “the value proposition for a lot of these Chinese cars, I think, remains intact, even with some of these tariffs.” More

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    Here’s what Paramount Skydance would be buying in a deal for Warner Bros. Discovery

    David Ellison, the CEO and chairman of the newly minted Paramount Skydance, has tapped an investment bank to help prepare a takeout offer for Warner Bros. Discovery.
    Warner Bros. Discovery has a massive library of major franchises including DC superheroes, Lord of the Rings, Game of Thrones and Harry Potter.
    The company also has the rights to broadcast games from the National Hockey League, Major League Baseball and March Madness basketball along with the French Open and Nascar.

    Paramount+ signage in the Times Square neighborhood of New York, US, on Thursday, Dec. 21, 2023.
    Gabby Jones | Bloomberg | Getty Images

    David Ellison looks to be buying up a media empire.
    The CEO and chairman of the newly minted Paramount Skydance has tapped an investment bank to help prepare a takeout offer for Warner Bros. Discovery, according to people familiar with the matter who spoke on the condition of anonymity to discuss nonpublic dealings.

    Warner Bros. Discovery had yet to receive an offer as of Thursday, according to people familiar. However, shares of the company soared almost 30% Thursday afternoon, notching the stock’s best day of trading on record.
    Representatives for Paramount and Warner Bros. Discovery declined to comment.
    Bringing Warner Bros. Discovery into the fold would add to Ellison’s growing list of franchise acquisitions and sports media rights. WBD, which announced in June it plans to separate into two entities, has a suite of desirable assets. Add those to Paramount’s collection of intellectual properties and Ellison could have a content behemoth on his hands.
    “A bid for WBD would solidify the overlooked value of its portfolio of assets that was weighed down by its balance sheet,” Robert Fishman, analyst at MoffettNathanson, told CNBC Thursday.

    A mountain of content

    Already in house, Paramount boasts movies and television shows from franchises like Star Trek, Transformers, SpongeBob SquarePants, Teenage Mutant Ninja Turtles, Paw Patrol, Scream and Mission Impossible.

    More recently, it has expanded its video game-based IP beyond Sonic the Hedgehog, which is a billion-dollar franchise in its own right, to snag the rights to make a Call of Duty theatrical film and the distribution rights to Legendary’s Street Fighter adaptation.
    Warner Bros. Discovery has a massive library of major franchises including DC superheroes, Lord of the Rings, Game of Thrones and Harry Potter. It also has legacy cartoons like Scooby-Doo, Looney Tunes and Tom and Jerry. It is also the distributor of Legendary’s Dune franchise and Godzilla and King Kong films.
    Last year, Warner Bros. was the second-highest grossing studio at the global box office and Paramount was the fifth-highest, according to data from Comscore.
    In addition to bolstering Paramount’s theatrical slate, Warner Bros. Discovery’s streaming service HBO Max counts more than 125 million subscribers as of the end of the second quarter. Paramount+ currently has around 77 million streaming users.

    Chasing ESPN

    In the wake of the Paramount-Skydance merger, Ellison also secured a $7.7 billion, seven-year deal to make Paramount the exclusive U.S. home for TKO Group’s UFC mixed martial arts organization. The agreement means UFC will stop its pay-per-view model and events will be available directly to Paramount+ subscribers and, in some cases, on CBS.
    Sports rights are scarce and only become available when previous deals expire. Apple is already expected to be the home of Formula 1, and Major League Baseball is waiting until its deals expire after the 2028 season to reorganize its media packages. That means that Paramount will have few other top-shelf sports assets to bid on and acquire in the mid-term.
    Meanwhile, Warner Bros. Discovery has the rights to broadcast games from the National Hockey League, Major League Baseball and March Madness basketball along with the French Open and Nascar.
    A potential tie-up between Paramount Skydance and WBD would exponentially expand Paramount’s library of intellectual property and an arsenal of sports content that could help it compete with Disney’s ESPN. More

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    Paramount Skydance is preparing a bid for Warner Bros. Discovery, sources say

    Paramount Skydance is working with an investment bank as it prepares an offer for Warner Bros. Discovery, according to people familiar with the matter.
    Warner Bros. Discovery shares closed up more than 28% on Thursday, the stock’s best day ever. Shares of Paramount Skydance closed up 15%.
    The Wall Street Journal first reported the recently merged Paramount Skydance was preparing a takeover bid for the entirety of WBD.

    Paramount Skydance is working with an investment bank as it prepares an offer for Warner Bros. Discovery, according to people familiar with the matter.
    Warner Bros. Discovery had yet to receive an offer as of Thursday, according to people familiar with the matter, who spoke on the condition of anonymity to discuss nonpublic dealings. A bid could come as early as next week, CNBC’s David Faber reported Thursday.

    Shares of Warner Bros. Discovery closed Thursday at $16.15, or up more than 28% — the stock’s best day ever. The company’s stock rose after the initial report from the the Wall Street Journal that the recently merged Paramount Skydance was preparing a takeover bid.
    Representatives for Paramount and Warner Bros. Discovery declined to comment.
    Shares of Paramount Skydance closed up about 15%.
    Warner Bros. Discovery recently announced plans to separate its global TV networks business from its streaming business and studios. The Journal reported Thursday the Paramount Skydance bid would be an all-cash offer for the entirety of WBD.
    Earlier this week, WBD CEO David Zaslav said at an investor conference that the planned separation would likely be completed by April. The streaming and studio assets would be renamed Warner Bros., while the global TV networks business — which will own a suite of pay TV networks including TNT and CNN — will be Discovery Global.

    While WBD executives said in June that each company would be “free and clear” to do deals following the split, a bid before the separation would have to be for the entire company, one of the people said.

    Media moves

    David Ellison, CEO of Skydance Media attends the 81st Annual Golden Globe Awards at The Beverly Hilton on Jan. 7, 2024 in Beverly Hills, California.
    Kevin Winter | The Hollywood Reporter | Getty Images

    The media industry has been navigating a transformation as streaming has upended the pay TV bundle, a longtime cash cow for TV and entertainment companies.
    A merger between Paramount Skydance and Warner Bros. Discovery would create a media behemoth with a huge portfolio of pay TV networks, a sprawling range of sports rights and two major film studios.
    Paramount Skydance owns broadcast network CBS, as well as pay TV networks like BET, MTV and Nickelodeon, and streaming service Paramount+. Its film studio is known for movies like “The Godfather,” “Top Gun,” and “Forrest Gump.”
    With the exception of a broadcast TV network, WBD has similar assets — a result of its own merger in 2022 between WarnerMedia and Discovery. The company owns networks like CNN and TNT, as well as HBO and streaming service HBO Max. Its Warner Bros. film studio also has a historic track record, and owns the intellectual property to franchises like “Harry Potter,” DC Comics and “The Lord of the Rings.”
    Both companies have a long list of major sports rights, too, the marquee content for all traditional TV and streaming platforms. A merger would put the likes of the NFL, MLB, an array of college football and basketball, and other major sports under one roof.
    Media executives and experts have expected consolidation could be coming to the industry.
    Zaslav has said publicly for some time that media companies need to consolidate. During an earnings call in November, shortly after Donald Trump was elected as president, Zaslav said a new administration could usher in more dealmaking.
    However, in recent months, some media companies have moved toward separation. Late last year, Comcast announced that its NBCUniversal would spin off its pay TV networks, which includes CNBC and MSNBC, into a separate, publicly traded entity. Months later, WBD announced it would make the same move.
    Paramount Skydance is the result of an $8 billion merger that was announced last year and received regulatory approval in August to move forward after a lengthy delay.
    The Federal Communications Commission cleared the way for the merger weeks after Paramount agreed to pay $16 million to Trump to settle a lawsuit he filed against the company over the editing of an interview on CBS’s “60 Minutes” with former Vice President Kamala Harris.
    At the time of deal’s approval, FCC Chairman Brendan Carr said in a statement that he welcomed “Skydance’s commitment to make significant changes at the once storied CBS broadcast network.”
    The company is looking to cut more than $2 billion in costs, and layoffs are expected to continue. Last week, Paramount SKydance sent a memo to its employees saying they were expected to return to the office five days a week in the new year, or seek a buyout.
    A lot has changed since the merger, which was backed by RedBird Capital Partners. The company has done a slew of deals under the leadership of David Ellison, son of Oracle founder and multibillionaire Larry Ellison, including acquiring the U.S. rights to TKO Group’s UFC for seven years, beginning in 2026.
    On Wednesday, Larry Ellison became more than $100 billion richer after software company Oracle issued growth projections that dramatically lifted the company’s stock.
    Disclosure: Comcast is the parent company of NBCUniversal and CNBC. More

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    Kodak launches vintage-style toy camera with strong sales

    Eastman Kodak launched a series of toy cameras called “Kodak Charmera.”
    The cameras have already sold out since the launch earlier this week.
    Charmera cameras are being sold in blind boxes, so consumers don’t know what they’re getting until they buy it.

    Kodak Charmera Keychain Digital Camera
    Source: Kodak

    Eastman Kodak’s latest product launch — a line of 1980s-inspired digital toy cameras called the “Kodak Charmera” — seems to have struck a nostalgic chord with consumers.
    The palm-sized point-and-shoot cameras, released Tuesday in collaboration with camera company Reto, are already sold out on Kodak’s website and are only available for pre-order at most affiliated retailers.

    Weighing 30 grams and measuring 2.2 inches across, the camera is marketed as a functional fashion accessory and comes in seven styles, each with filters that mimic the look of vintage film photography.
    The cameras are sold in blind box packaging, meaning buyers won’t know which style they’re getting until after they purchase one. They can take a gamble and buy a single camera for $29.99, or get the whole color set for $179.94.
    But a banner on Kodak’s website said because of the cameras’ high demand, “dispatch will be delayed for 1-10 working days.” It added that some regions might see an error saying shipping isn’t available when they go to check out because they’re out of stock.
    The sales come as Kodak, a pioneer of the photography industry, has been struggling.
    Kodak’s second-quarter earnings report, released in August, warned that its finances “raise substantial doubt” in its ability to continue operations. The company posted a net loss of $26 million, down 200% from a net income of $26 million for the second quarter of 2024, along with a 12% decrease in gross profit with millions in debt obligations.

    The company said at the time that it had a plan to terminate its retirement pension plan to raise money, and noted that the “going concern disclosure” is a technical report required by accounting rules.
    Shares of the company are down more than 9% year to date.
    Still, the Charmera’s early success suggests Kodak may have tapped into Gen Z’s growing appetite for the vintage look from Y2K fashion to film-style photography. In May, the Global Wellness Institute named “analog wellness,” including predigital technology, as its top trend for 2025.
    The Charmera fits squarely into that niche and is capitalizing on another Gen Z obsession: blind box buying.
    Kodak’s selling strategy mirrors that of Beijing-based Pop Mart, which has seen booming sales driven by Gen Z buying Labubus, an elf-like monster doll created by Hong Kong Dutch-based artist Kasing Lung, and other toy collectables.

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    Health care inflation rises as patients, employers brace for biggest jump in health spending in 15 years

    Medical care costs rose 4.2% in August, according to the Consumer Price Index, now at the highest level in three years.
    Large employers are projecting a 9% increase in overall health care spending for 2026, and a 12% increase when it comes to drug spending, fueled by high-priced cancer drugs and GLP-1s for weight loss.
    There’s been a surge in workers using flexible spending and health savings accounts to buy GLP-1s in the cash-pay market
    Employers are beginning to explore new payment models to get low cash-market pricing for their own health plans

    Jose Luis Pelaez Inc | Digitalvision | Getty Images

    Health-care inflation is fueling higher coverage costs, setting the stage for what could be the largest increase in health-care spending by large employers in 15 years.
    Medical care costs in August rose 4.2% on an annualized basis, according to the Labor Department’s Consumer Price Index, compared to an overall inflation rate of 2.9%. The cost of doctors’ visits climbed 3.5%, while hospital and outpatient services jumped 5.3%.

    Those price increases are contributing to higher health insurance costs for 2026. Consumers who don’t qualify for government subsidies to buy health coverage on the Affordable Care Act exchanges could face double-digit premium increases for next year, according to early filings from insurers.
    Workers with employer health coverage could also have to pay higher premium and out-of-pocket costs next year.
    Large employers are projecting their overall health coverage costs will rise an average of 9% in 2026, according to several business group surveys, which would be the highest level of health-care inflation since 2010.
    More than half of companies surveyed by benefits consulting firm Mercer earlier this year said they are considering passing on some of those increases to workers, but the Business Group on Health says most large employers in its survey are looking for other ways to cut costs.
    “Employers have shied away in every way possible, from passing on costs to employees. This year, we see the first indication that they may look to pass some of that on to employees, but again, only as a last resort. They’re going to try and pull as many other levers as possible,” said Ellen Kelsay, BGH president and CEO.

    Employer cost drivers: cancer drugs and GLP-1s

    Shana Novak | Stone | Getty Images

    Prescription drug prices rose 0.9% in August, according to the Consumer Price Index, which considers a range of widely-used generic and brand-name drugs.
    But for large employers, expensive drugs are the major drivers of higher health spending.  
    Companies surveyed by BGH are projecting a 12% increase in pharmaceutical costs next year, on top of an 11% hike this year fueled by cancer drugs and diabetes and obesity treatments like Novo Nordisk’s Wegovy and Ely Lilly’s Zepbound.
    “Cancers have been for the fourth year in a row, the top condition driving healthcare costs — cancers at younger ages, later stage diagnoses,” said Kelsay, who added that pricy weight loss drugs are are a close second.
    “When it comes to the treatment of obesity, that has been the space that has been the most frothy for the past two to three years and has been what has fueled a lot of this pharmaceutical spending,” she said.
    Nearly two-thirds of employers with 20,000 workers or more offer access to weight loss drugs known as GLP-1s, according to Mercer. Less than half of small employers surveyed plan to offer access in 2026.  
    With growing demand for the drugs, more companies are tightening eligibility requirements and beginning to explore more affordable ways to provide access for their employees, including the cash-pay market.

    Cash-pay GLP-1s

    A telehealth executive whose firm offers compounded GLP-1s told CNBC that some large employers are quietly letting workers know they can use health savings accounts to buy the medications for less in the cash market.
    “They are worried about how much [the drugs] cost, but that doesn’t mean they don’t think their employees shouldn’t have access to them. They just don’t want to have to pay for it,” said the executive, who spoke on condition of anonymity because of the confidential nature of the discussions.
    Health account data shows more workers are turning to direct-to-consumer options, including Eli Lilly’s Lilly Direct and Novo Nordisk’s Novocare online pharmacies, both of which offer their weight loss drugs at roughly half the list prices of more than $1000.
    GLP-1 purchases are now the top category of cash-pay spending in pre-tax flexible spending and health savings accounts, for expenses not covered by insurance, according to the CEO of health payments processor Paytient.
    “We see a tripling from last year to this year of usage at GLP-1 oriented providers. These are places like Lilly Direct, like Ro, like Hims & Hers, and that’s a growing segment,” said Paytient founder and CEO Brian Whorley.  
    But employers worry that the cash-pay trend leaves lower-income workers out of the equation because they can’t afford the out-of-pocket costs. That is prompting discussions about how their companies can obtain cash-pay prices to help boost more equitable access for employees.
    Self-insured employers have contracted directly with so-called Centers of Excellence for specialty medical care such as cancer treatment and joint replacements. But they can’t currently do the same for many drugs. Under agreements with pharmacy benefit management firms, or PBMs, both the drugmakers and employers would violate their contracts by using a direct cash-pay process. 
    But employers are increasingly pressing PBMs for better options, says BGH’s Kelsay. They are beginning to consider new types of benefit managers, which are proposing new payment models for drugs in the development pipeline.
    “There are some new entities — some startups in this space — that are building out products and solutions where they are going on behalf of a pooled group of employers to negotiate with manufacturers on certain cell and gene therapies,” she said. 
    Paytient’s Whorley calls the challenge of making GLP-1s more affordable a stress test moment for employers and PBMs.
    “They’re at a perfect sort of Venn Diagram of clinically effective drugs that change people’s lives, that increasingly will force a choice,” when it comes to financing, Whorley said. “If we get this right, it can provide a blueprint for all the drugs like GLP-1s that will … present challenges for health plans.” More