How Employers Can Manage GLP-1 Drug Costs Without Cutting Employee Benefits

GLP-1 medications to manage type 2 diabetes and promote weight loss have skyrocketed in the US. A KFF health tracking poll found that 1 in 8 U.S. adults are currently taking a GLP-1 medication, and nearly 1 in 5 have taken one at some point. Some take it for weight loss. Some are using it as part of their diabetes regimen. Others are taking it for conditions like heart disease. Since the introduction of new pills in January, use is expected to increase even more in the coming months.

With about half of the U.S. population getting their health insurance through an employer, many businesses are facing increased demands from employees for GLP-1 coverage. Your organization may be among them. The key is finding the right balance of responding to employees needs while controlling costs for your business.

7 Strategies Employers Can Use to Manage GLP-1 Coverage Costs

1. Utilization Management: This can include one or more clinical guardrails.
   • Eligibility restrictions: Some employers and insurers are limiting GLP-1 coverage to FDA-approved criteria like a formal Type 2 Diabetes diagnosis or a Body Mass Index (BMI) below 30 (or 27 with comorbidities).
   • Prior authorization and step therapy: You could require documentation of medical necessity as well as the required preliminary use of lower-cost alternatives before authorizing GLP-1 meds.
   • Provider constraints: You could limit prescribing authority to specialists rather than all medical providers.
2. Integrated Care and Support: This can include mandatory lifestyle programs (pairing Rx with behavioral health guidance) or exercise programs to sustain weight loss and prevent medication dependence. Coaching is often another option.
3. Tiered Formulary Design: Putting GLP-1 meds in a drug formulary tier with higher cost sharing. This helps control your business’ costs, while still offering a benefit for employees and their dependents.
4. Spending Caps: Adopting annual or lifetime caps on weight-loss meds to ensure employer financial predictability.
5. DTC Partnership: Consider a partnership with a direct-to-consumer (DTC) health care organization or drug manufacturer. Eli Lilly and Novo Nordisk both have deals to bypass traditional pharmacy benefit managers. They offer discounted, home-delivered meds through Ro and GoodRx. Weight Watchers has its own program for those taking Wegovy and Zepbound.
6. Discounted Retail Partnerships: Costco is partnering with manufacturers and vetted telehealth providers to offer discounted pricing on GLP-1 meds. Walmart has expanded its health services to include comprehensive GLP-1 support. Virtual consultations are available through Curai Health, Twin Health, and Wheel. Amazon One Medical has launched a discounted program, too.
7. Prescription Alternatives: When GLP-1 meds like Ozempic, Wegovy, and others are not covered by insurance, there are other alternatives. They include Qsymia that combines a stimulant to suppress appetite with a seizure med that reduces cravings. Contrave acts on brain pathways to reduce hunger and cravings; it is often used for emotional eating. Another option is Orlistat, which reduces the amount of dietary fat absorbed by the body. There are also supplements available that support natural GLP-1 production.

Talk With Your Broker for GLP-1 Solutions for Your Business

With nearly 40% of U.S. adults affected by obesity, the increasing interest in GLP-1 meds and related alternatives is no surprise. Talk with your health insurance broker about the solutions to address the growing demand. If you don’t already have an employee benefits broker, we make it easy to search for one.