Large language models pretrained on general-domain corpora often exhibit tokenization inefficiencies when applied to specialized domains. Although continual pretraining for domain adaptation partially alleviate performance degradation, it does not resolve the fundamental vocabulary mismatch. To address this gap, we introduce a targeted parameter-efficient domain adaptation approach that combines vocabulary adaptation with pretraining for LLM-based text summarization. Our unified framework augments pretrained tokenizers with domain-specific tokens while selectively replacing under-trained and unreachable tokens to limit parameter growth. We evaluate our approach on Llama-3.1-8B and Qwen2.5-7B across legal and medical summarization tasks on a challenge-oriented evaluation protocol focused on expert-driven text and summaries which typically has higher concentration of over-fragmented Out-of-Vocabulary (**OOV**) words. The vocabulary adaptation algorithm enhances the overall quality of the summarization model by improving semantic similarity between the generated summaries and their references. In addition, the adapted model produces summaries that incorporate more appropriate novel and domain-specific words, leading to improved coherence, relevance, and faithfulness. We further observe that our proposed approach significantly reduce training time by 35-55% over continual pretraining and reduce parameter counts up to 37% w.r.t expansion-only methods. We make codebase publicly available at [url](https://github.com/gb-kgp/VocabReplace-Then-Expand).

Large Language Models (LLMs) recently achieved great success in medical text summarization by simply using in-context learning. However, these recent efforts do not perform fine-grained evaluations under difficult settings where LLMs might fail. They typically report performance scores over the entire dataset. Through our benchmarking study, we show that LLMs show a significant performance drop for data points with high concentration of out-of-vocabulary (OOV) words or with high novelty. Vocabulary adaptation is an intuitive solution to this vocabulary mismatch issue where the LLM vocabulary gets updated with certain expert domain (here, medical) words or subwords. An interesting finding from our study is that Llama-3.1, even with a vocabulary size of around 128K tokens, still faces _over-fragmentation_ issue with medical words. To that end, we show vocabulary adaptation helps improve the LLM summarization performance even in difficult settings. Through extensive experimentation of multiple vocabulary adaptation strategies, two continual pretraining strategies, and three benchmark medical summarization datasets, we gain valuable insights into the role of vocabulary adaptation strategies for customizing LLMs to the medical domain. We also performed a human evaluation study with medical experts where they found that vocabulary adaptation results in more relevant and faithful summaries. Our codebase is made publicly available at https://github.com/gb-kgp/LLM-MedicalSummarization-Benchmark.