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Companies still aren’t rushing to pay for their workers’ GLP-1 weight loss drugs, despite skyrocketing demand and mounting evidence for their clinical benefits.
Just 33% of employers and health plans cover the drugs for obesity, according to a report published Tuesday by consultant firm Pharmaceutical Strategies Group. The biggest reason? The drugs’ high costs.
“Affordability is the main challenge, and we have seen a few employers offer coverage, then pull back after they evaluated the spend they incurred,” Renee Rayburg, the firm’s vice president of clinical strategy, told Endpoints News in an email.
Some organizations have stopped covering the drugs altogether or made them tougher to qualify for, such as requiring a higher body mass index, she said. Others are exploring options like programs to help manage lifestyle changes before making decisions about GLP-1 coverage, she said.
This week, Blue Cross Blue Shield of Michigan, the largest insurer in the state, said it will drop coverage of GLP-1 obesity drugs starting January 2025, citing the drugs’ effectiveness, safety and cost, Bloomberg News reported Wednesday.
Obesity drugs such as Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound have shown to help people lose significant amounts of weight. This class of drugs, originally used to treat type 2 diabetes, has also been found to help with heart disease, liver disease, sleep apnea and other health conditions. But the drugs’ list prices can range from $11,000 to $16,000 per user each year, according to the report.
Drugmakers have said they’re seeing broader coverage for weight loss than the report suggests. Both Novo Nordisk and Eli Lilly told Endpoints that about half of employers or commercial insurance plans have opted to cover their obesity drugs.
Pharmaceutical Strategies Group surveyed 223 benefit leaders representing employers and health plans, which included a mix of commercial, Medicare and Medicaid plans. A small number of union and pension plans were also surveyed.
The percentage of organizations covering GLP-1 drugs appears to have dropped compared to last year, when 43% of organizations said they covered weight loss medications. The decrease could be due to a change in how the survey was worded, however. While this year’s survey asked specifically about GLP-1 drugs, last year’s asked about FDA-approved weight loss medications.
According to the latest report, employers were more likely to cover GLP-1 drugs for obesity at 37%, compared to 23% of health plans. Notably, 37% of employers and health plans said they’ve never covered the drugs for obesity and don’t plan to. Another 19% said they were considering adding coverage.
Meanwhile, nearly all — 91% — of employers and health plans cover GLP-1 drugs to treat type 2 diabetes, according to the report.