GLP-1s: Balancing Costs and Benefits
Obesity happens when your body stores too much fat, to the point where it can affect your health. It’s typically measured using BMI (body mass index), which is calculated by dividing your weight by the square of your height. A BMI over 30 is considered obese, while a BMI between 25 and 30 falls into the overweight category.
Being overweight or obese is a major cause of disability and correlated with various diseases and conditions, particularly heart disease, type 2 diabetes, obstructive sleep apnea, certain types of cancer, and osteoarthritis. On average, obesity reduces your life expectancy by six to seven years, and for individuals with severe obesity, life expectancy can be reduced by a decade.
Research shows that the medical costs for someone with obesity are more than six times higher than for someone who isn’t overweight. Altogether, these costs add up to nearly $114 billion.
With all the challenges surrounding obesity, prevention is more important than ever. But it’s not as simple as just eating better or exercising more—it takes a multi-layered approach that involves healthcare, communities, families and individuals. Changes to diet, as well as, exercising, have historically been the go-to recommendations from doctors…..that is until recently.
GLP-1 Agonists
Initially developed to help treat type 2 diabetes, the glucagon-like peptide-1 (GLP-1) agonists play a critical role in regulating blood glucose (sugar) levels. These medications mimic a natural hormone produced in the intestines, helping to lower blood glucose, boost insulin production, and slow down digestion. That slower digestion keeps you feeling full longer, which can support both weight loss and diabetes management.
The early successes associated with weight loss have brought substantial popularity to the drug class. And when you consider the long-term risks of obesity—like high blood pressure, cardiovascular disease, sleep apnea, and arthritis—it’s easy to see why. Beyond just managing diabetes, these medications could help prevent a range of serious health conditions, potentially saving money on future healthcare costs.
But for employers and plan sponsors, the big question is: should they cover these drugs, partially cover them, or exclude them altogether? The cost is significant and balancing that against the long-term health benefits isn’t an easy decision.
Let’s look at some statistics…
80% of US adults surveyed believe insurers should cover this class for those individuals who are overweight or obese by definition.
In 2024, 44% of employers with more than 500 employees covered this class for weight loss (the vast majority cover for the management of type 2 diabetes)
Becker’s Hospital Review
Many employers are wondering—does covering these drugs for weight loss actually help lower overall medical costs in the long run?
Prime Therapeutics performed a study that did not demonstrate an offset in medical costs in non-Diabetic members within two years. In fact, healthcare costs increased by 46%.
Another big consideration is how well users can tolerate these medications. GLP-1 agonists aren’t without their downsides—they often come with side effects like nausea, vomiting, diarrhea, and stomach pain. Because of this, sticking with the treatment can be a challenge for some, making long-term adherence less than ideal. In the same study by Prime Therapeutics, only 25% of patients on GLP-1 agonists remained on therapy at two years.
What factors should plan sponsors consider when deciding whether to add coverage for this class of drugs for weight loss?
If plan sponsors decide to cover these medications for weight loss, they should consider implementing a broader health and wellness strategy, one that includes diet exercise, and behavior changes for best long-term results.
There are multiple vendor partners to consider such as Omada, Weight Watchers, Lark, Wondr Health Advanced, Diathrive and Calibrate to name a few.
Taking this approach could help employers see better results in the long run. 88% of members surveyed on a medicated weight loss journey prefer a multimodal approach where they have the support that includes not only medications but healthy habits and external support.
Options for managing coverage under the prescription benefit
To ensure appropriate utilization, here are key considerations for covering the GLP-1 agonist class:
- Prior Authorization – ranges from standard PBM protocols to custom criteria set by the plan sponsor. This may include confirming risk factors, checking BMI, and ensuring other treatments have been tried first. This process helps ensure that the medication is being prescribed for the right reasons and is medically necessary.
- Day Supply Limit – refers to the maximum number of days’ worth of medication a plan will cover at one time. Plan Sponsors could consider not allowing more than a 30-day fill based on rates of non-adherence with these medications setting a limit can help control how much is dispensed at once, prevent overuse, and encourage ongoing monitoring of treatment progress.
- Increase refill threshold – studies show that up to a 4% of drug surplus may be on hand and in excess
Plan sponsors want to make the right choice when it comes to covering weight loss drugs, but there’s no one-size-fits-all approach. Every employer has different goals for their benefits strategy, which is why it’s important to regularly assess how these medications fit into the bigger picture of employee health and wellness.
Even if an employer decides to cover these drugs for weight loss, the financial side, especially rebates, can get complicated. This drug class is highly rebate-eligible, and we’ve seen challenges with both standard and custom utilization management criteria. That’s why it’s critical to discuss the financial impact with PBMs, as their flexibility in customizing coverage criteria can vary.
For employers that do not cover GLP-1s for weight loss but want to assist their membership, there are still options. Eli Lilly provides a direct option for a discounted price, and programs like GoodRx and RxSaveCard can also help lower costs.
Compounded Semaglutide
Compounded semaglutide has been a hot topic when it comes to insurance coverage. Unlike FDA-approved versions like Ozempic and Wegovy, compounded semaglutide is mixed by compounding pharmacies, often as an alternative when shortages occur. In 2022, the FDA added semaglutide to its drug shortage list, allowing compounding pharmacies to source ingredients and create their own versions. However, this comes with risks. The FDA has raised concerns about where these ingredients are sourced, warning that some may come from unregulated foreign suppliers. This could lead to issues like contamination, incorrect dosing, or even medications containing no active drug at all.
Now that the FDA has removed Semaglutide from the shortage list, employers should focus on covering only FDA-approved medications from the original manufacturers. This helps ensure safety, quality, and consistency for those relying on these drugs for diabetes management or weight loss.
Key Takeaways
Plan sponsors have several factors to weigh when deciding whether to cover these medications for weight loss. At M3 and Ethica Pharmacy Advisors, we work directly with you to help define your goals and strategic direction regarding weight management. Contact your M3 Client Executive or Ethica Pharmacy Advisor today for guidance on vendor selection and customized clinical criteria for this drug class.
About Ethica Pharmacy Advisors
Ethica Pharmacy Advisors is an innovative pharmacy consulting firm. Using in-house expertise, 21st-century tech and real-time insights, Ethica empowers clients to see costs, understand usage and negotiate better terms by exploring beyond the typical vendors who dominate the marketplace.
