GLP-1 Drugs: A Costly Dilemma for Employer Health Plans

The topic of the newest Weight loss drugs or more formally known as GLP-1 drugs has never been more relevant than it is today.

Drugs such as Wegovy, Ozempic, and Mounjaro are familiar names to almost every average American. If you are not taking one of these drugs yourself, chances are you know someone who is currently taking one of them and has had a positive experience. However, as a mid-market employer, the cost of these drugs has been a challenge that you need to navigate. In this article, we will explore the evolution of these drugs and get input from experts to help guide you to make the right decisions for your company.

The Rise of GLP-1 Drugs

GLP-1 drugs origins go back to the 1980s but it was not until 2010, that regulators approved the first Novo Nordisk GLP-1 agonist drug, called Liraglutide which was sold under the brand name Victoza (Jennifer Couzin-Frankel, Science.org). Over the next 10 years, improvements were made and in 2021 Wegovy was released, soon after in 2023 GLP-1 therapies were awarded science’s breakthrough of the year which earned them the reputation for being “Wonder Drugs.” Today these drugs have proven to help patients with Type 2 diabetes and cardiovascular disease and very quickly started becoming prescribed to anyone struggling with obesity, the advertisements and celebrity endorsements only increased demand. The global GLP-1 Market Share in 2023 was valued at $37.4 billion reaching 47.4 billion in 2024 (MarketsandMarkets). Predictions range from 100 billion to 400 billion by 2032. With these forecasts and the positive short-term results we have seen so far, everyone wants more GLP-1s.

The Cost Impact on Employer Health Plans

This significant number of scripts written at approximately $1,000 per month per person, gained the attention of employee benefits consultants when they met with employers regarding their 2023 and 2024 benefit renewals. GPL-1 drugs now were officially a significant factor in overall increases in medical rates. As of Jan 1st, 2025, unless a person has Type 2 diabetes or cardiovascular issues, most insurance carriers made the decision not to cover GLPs 1 drugs for their fully insured clients under 100 employees, some make it optional for over 100 employees at approximately a 4% to 5% increase to rates. Self-insured employers have more control over what they cover and who can get it.

In short, most employers with 100 or more employees (some smaller) will have a certain degree of control over the distribution of GLPS-1 to their employee population. If you are in this position, you need to figure out what is the best decision for your organization.

What Doctors Are Saying About GLP-1s

I talked to a few prominent Physicians about GLP-1s. I wanted to address some of the concerns and challenges I had heard regarding side effects, the plateau of weight loss, and overall health.

Common Side Effects and Long-Term Effects

At this point, the most common side effects are nausea, vomiting, and diarrhea, and these can often be mitigated by incremental dose increases under a physician’s direction, “Although uncomfortable, it’s important to realize these ‘side effects’ are just the drug mimicking the effect of the body’s natural peptide, and they play a role in the weight loss treatment plan. These drugs also act in the reward center of the brain which controls cravings such as appetite” said Dr. Anthony Rosa, Physician and partner at US Digestive Health. Rosa also believes we will see more research on how these drugs may play a role in other addictions such as alcoholism and gambling.

Other less common, but potentially severe side effects such as pancreatitis and gallbladder disease have been linked to GLP-1 drugs. More research is needed to investigate whether there is a clear cause and effect between the two.

Weight Loss Plateau and Prolonged Use

I also questioned Dr. Todd Campbell, General Surgeon and Medical Director at Aetna, regarding the weight loss plateau, and he said that it varies. There is nothing to suggest that this happens to everyone, but different people will have different reactions to the drug. I also asked Dr. Campbell about prolonged use, and he feels that the cardiovascular benefits are real and posed the question of how we treat obesity. If we treat it as a disease, we should not limit the treatments needed, just as we would not limit the treatment of any other disease. He predicts that we will see more of these drugs in the future and that they may be paired with other drugs, sort of like a cocktail to potentially address other health issues.

All in all, both physicians viewed these drugs in a positive light. However, they both had concerns about GLP-1’s being “too good to be true” and said that it is important to pair the drugs with a proper diet and exercise. They also cautioned that it is too early at this point to know if there will be serious side effects in the future. This must be continually monitored.

Key Considerations for Employers

In summary, I believe employers in the position to regulate access to these drugs need to consider these major factors:

• Cost vs. Long-Term Savings: Will the long-term savings of potentially healthier employees be worth the short-term cost of the drugs. Unfortunately, it’s too early to tell, there hasn’t been enough data to prove this either way.
• Affordability: Can you afford the high cost of these drugs? As demand increases and oral applications become more available, we will see more scripts become available to more employees. Generics are still several years away.
• Impact on Company Culture: Will the decision not to cover GLP-1 drugs have an impact on your culture or workforce? Many employees have experienced the positive effects of GLP-1 drugs and are specifically looking for coverage from their employers.

It will not be a one-size-fits-all answer. I have talked to many of our clients regarding this subject and heard various points of views. My recommendation is to have a candid discussion that involves HR, Finance, and your Benefits Consultant and come up with the right fit for all.