GLP-1 drugs are a double-edged sword for the nation’s employers. Although they are having a demonstrable effect on workplace health, the high cost is putting a strain on their budgets.
GLP-1s, known by brand names such as Ozempic, Wegovy, Mounjaro or Zepbound, originally were developed to help regulate blood sugar in people with Type 2 diabetes. They also lead to substantial weight loss for people with obesity and show promise in helping manage other conditions, such as cardiovascular disease, obstructive sleep apnea and substance use disorder.
However, nearly 8 in 10 employers report that GLP-1s are driving an increase in their company’s health care costs, leaving many to consider some difficult choices in balancing costs and care, according to a new survey from Business Group on Health. Most employers cover GLP-1s for diabetes, and two-thirds of surveyed employers currently cover GLP-1s for weight management, the survey found.
Employers rely on various strategies to ensure the appropriate use of GLP-1s for weight management, including validating clinical eligibility through objective biometric data; requiring participation in a weight-management program to receive coverage; limiting prescribing to specific providers; and excluding certain medications from the formulary.
For some employers, however, such requirements do not ease the cost pressures on their health care budgets. Of those covering GLP-1s for weight management, less than three-quarters said they are likely to continue that coverage in 2027, while 10% said they likely will not. Companies that do not cover GLP-1s for weight management today are unlikely to add coverage in the future.
Among other survey findings:
- Although more than half of employers that cover GLP-1s for weight management expect the medications to yield significant clinical benefits, few have yet seen evidence (such as a reduction in obesity rates and fewer employees needing bariatric surgery) within their aggregated claims.
- Nearly 9 in 10 employers anticipate that the availability of an oral GLP-1 medication will result in higher demand for the drugs overall, and only 9% anticipate a decrease in price.
- When it comes to how much employees pay for the medications, more than 8 in 10 employes use the same standard cost-share arrangement as they do for other medications. This approach far exceeds options such as using a special design or having no out-of-pocket costs.
- Nearly 8 in 10 employers involve their executive leadership in GLP-1 coverage decisions.
“Our findings show the tremendous concern employers have regarding these medications from a cost and financial viability perspective,” said Ellen Kelsay, president and CEO of Business Group on Health. “Against the backdrop of anticipated double-digit health care cost increases, fueled to a large degree by GLP-1s and overall prescription drug costs, companies cannot ignore the reality that GLP-1s have significant implications for health care budgets – and overall affordability.”