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The evolving landscape of the workforce is marked by a significant trend: the growing percentage of Baby Boomers continuing to work full-time, challenging traditional retirement norms.
In 1987, only 11% of individuals over 65 were employed, but today, this figure has risen to nearly 20%, representing about 6.6% of the total workforce, according to the Pew Research Center.
Projections suggest that by 2032, nearly 9% of the workforce will be 65 and older, and by 2050, this could reach 23%.
This trend presents both challenges and opportunities for employers, insurers and the broader healthcare system.
By understanding how the aging workforce impacts drug utilisation and costs, stakeholders can better manage benefits and support long-term workforce health.
Baby Boomers, born between 1946 and 1964, have been a driving force in many societal changes, and their continued presence in the workforce is no exception.
Several factors are driving older individuals to remain in the workforce:
- Financial necessity: In the UK, the state pension age is currently 66 for both men and women, but it will gradually increase to 67 between 2026 and 2028, affecting those born after April 1960.
- Longer, healthier lives: People in the UK are enjoying longer and healthier lives than they were when the state pension age was established at 60 and 65 in 1940. Longer working lives provide the opportunity to achieve financial stability in later years, while also maintaining social connections and staying active, according to the Centre for Ageing Better.
- Age-friendly economy: The modern economy has also become more age-friendly, with fewer jobs requiring physical stamina and more offering flexible schedules. Additionally, there is a growing demand for skilled, educated workers, a need that is not being met by the smaller Gen X cohort. As a result, the Transamerica Center for Retirement Studies found 66% of workers aged 60 and over now expect to work past 65 or never retire.
Implications for employer drug costs
The impact of an aging workforce on drug spend is a complex issue.
With age often comes increased reliance on medications, particularly for chronic conditions, and the likelihood of having multiple chronic illnesses increases significantly with age.
Johns Hopkins Medicine found hypertension, high cholesterol, diabetes and arthritis are among the most prevalent conditions affecting older populations.
The good news is that the most used medications for these conditions are relatively inexpensive.
However, the issue of polypharmacy, or the use of multiple medications, becomes more prevalent as people age.
About 30% of those aged 60 and up use five or more prescription drugs regularly, Johns Hopkins Medicine also found.
While each medication may have a valid clinical reason, polypharmacy can lead to adverse events, poor health outcomes and increased healthcare costs.
Despite the expectation that many will continue working, the reality often differs.
Many people retire earlier than planned due to health issues, changes at work, or unexpected financial windfalls.
The question isn’t just whether older employees will increase drug costs but by how much, and whether those costs can be mitigated or reduced through smarter benefit design.
The limited data on drug costs for older workers suggests that while they do incur drug expenses, these costs are relatively low for common medications.
More serious conditions often lead to retirement, which may explain the lack of a significant increase in employer drug costs. The absence of widespread discussion on this issue further supports this observation.
Opportunity for innovation
The aging workforce should not be viewed solely as a cost driver. Rather, it presents an opportunity to innovate and personalise benefit offerings.
By designing insurance plans that are more responsive to the unique health needs of older workers such as expanded health management programs, and increased access to telehealth.
Additionally, fostering a culture of preventive care and wellness is critical.
Encouraging older workers to engage in regular health screenings, lifestyle interventions, and open communication with care teams can delay the onset or worsening of chronic conditions, reducing the need for multiple medications.
