Weighing employer GLP-1 coverage considerations

Barriers to accessing GLP-1s

Right now, access to GLP-1s is left wanting. Around two-thirds (65%) of patients said in the PwC survey that they haven't started taking a GLP-1 yet because of cost. The list price for these medications ranges from $800 to $1,400 per month, according to GoodRx.

This comes as insurance coverage remains murky. Right now, blockbuster weight loss drugs are usually only covered by insurance when they are being used to treat type 2 diabetes. Additionally, some employers choose to exclude GLP-1 drugs from their health plans, mostly because of the high price tag.

That said, discussion churns as more employers consider the downstream consequences of not including these drugs in coverage. After all, GLP-1s have proved to effectively treat obesity, a chronic illness that carries a price tag of around $173 billion annually, according to the CDC.

Treating obesity and other less-studied diseases could have a ripple effect that ultimately improves patients' overall health and well-being and potentially reduces downstream costs.

Given that promise, the decision to cover GLP-1s is a big one for employers moving forward, according to Manuel Jurado, associate partner at The Dedham Group, a strategy consulting firm for the life sciences.

"These therapies on the obesity side are definitely considered expensive," Jurado said in a recent interview. "From a budget impact standpoint, it is challenging for a lot of these employers to tolerate such a high budget impact. They're just trying to do their best to find creative ways to cover these therapies without necessarily breaking the bank."

Barriers to covering GLP-1s

Even in a company that can afford to cover GLP-1s to some extent, employees might have challenges with accessing the drugs because coverage is not 100%.

For employers, the financial impact of fully covering GLP-1s is the biggest deterrent to providing members with access to the drug. Tied to that, employers want a clearer value proposition before moving forward. The drug demonstrates a lot of promise, but diabetes is the only indication for which it has been thoroughly tested.

That's not to say employers aren't aware of the empirical evidence supporting GLP-1 efficacy. The drugs have proved to effectively treat obesity, and they've also been linked to other chronic illnesses like cardiovascular disease. Some pharmaceutical manufacturers have argued to big employers that the net impact of addressing some of the most costly chronic illnesses in the U.S. is astronomical.

But it's not just a question of whether these drugs work well enough to reduce downstream health expenditures. The decision to cover GLP-1s is nuanced for employers, according to Jurado.

"The challenge for these employer groups, especially for these younger population groups, is that we're in a society where people don't tend to stay at a job for more than a couple of years," Jurado explained.

Jurado said it could take years for an employer to see ROI for these weight loss medications because patients need to take them for a long period of time to truly move the needle on their well-being. If an employer makes that investment, they could find themselves in a sticky financial situation should an employee leave the company before they -- and their employer -- see the benefits of the treatment.

None of that is to mention the medication adherence woes that beleaguer GLP-1 efficacy. One 2024 study showed that around half of GLP-1 users did not take the medication as prescribed consistently; nearly 70% stopped taking the medications by 24 months. Reasons for cessation could include availability of the drugs, cost and complications from side effects.

The drugs stop working once patients stop taking them, potentially triggering weight regain and complicating things for employers that helped fund access.

But Jurado remained optimistic that the drug would prove worthy of the investment.

"Slowly, hopefully, we'll see more data that supports why there are economic savings and economic value as well for using these GLP-1s chronically," Jurado said.

Benefits of covering GLP-1s

According to KFF, it's not that common for big employers to cover GLP-1s for weight loss. In an October 2024 data set, KFF said fewer than one in five firms with 200 or more employees covered the drugs that year.

But still, employers see the value in coverage. A 2023 survey from Accolade found that 79% of human resources (HR) decision-makers agree that GLP-1 coverage will help employees' long-term health. Another 77% agreed that GLP-1 coverage would make employees feel that they got a better health insurance package.

"God forbid something happens in a period of time that you didn't have a patient on treatment. Obviously, that is a significant cost to your system," Jurado explained, acknowledging that employers will want to provide the real health benefits GLP-1s can provide. In fact, there's a health risk to withholding coverage, just as there are risks to providing it.

Beyond risk aversion, however, many employers have expressed that covering these drugs is the right thing to do for their employees.

The Accolade survey showed that most employers that covered GLP-1s tied coverage to better employee satisfaction and well-being (75%). Additionally, 58% of HR decision-makers agreed that wellness program engagement grew as a result of GLP-1 coverage. Around half (57%) observed improvements in comorbidities, which they associated with GLP-1 coverage.

Employers know that comprehensive benefits packages attract strong candidates and anchor existing talent. GLP-1 coverage is a high priority in the current workforce, where 15 million adults are already on semaglutide and 129.2 million adults are eligible for the drug for weight loss purposes, according to Beth Israel Deaconess Medical Center.

"Especially for blue-collar jobs when you can work at an Amazon versus a Walmart versus a Target, in many cases when you have obesity or when you're looking for treatment, you're probably going to lean toward the job at this point that has the best benefits," Jurado affirmed.

Although employers might want to provide coverage for GLP-1s, the high cost of the medication might impede those efforts. However, some employers are tapping vendor partners and looking into lower-cost alternatives, like coverage for compounded GLP-1s, to make ends meet.

In the next part of this series, we'll explore the strategies employers are using to provide some coverage for GLP-1s.

Kelsey Waddill is a managing editor of Healthcare Payers and multimedia manager at Xtelligent Healthcare. She has covered health insurance news since 2019.

Sara Heath has covered news related to patient engagement and health equity since 2015.