Original article written March 11, 2024, by Melisa Horton, PharmD and Strategic Pharmacy Consultant
Employer cost and coverage information updated December 4, 2024, in collaboration with Rich Fahn, SVP, Benefits, and Cam Kennedy, Managing Director, Benefits
"A combination of medication (if deemed appropriate by your prescriber), healthy diet and increased physical activity are all pieces of the puzzle."
GLP-1 (glucagon-like peptide) medications like Ozempic and Wegovy have continued growing in popularity over the last several years. This class of brand-name medications is FDA-approved for both the treatment of type 2 diabetes and for long-term weight management. This article provides context and information for employers as they evaluate their own plans, as well as an informational section that can be shared with employees.
A Rapidly Changing Landscape
While many health plans cover GLP-1 drugs for type 2 diabetes, coverage for GLP-1 drugs for weight management varies significantly. In a recent study by KFF that surveyed large companies, less than a fifth of those surveyed offered coverage for GLP-1 drugs for weight loss. Among those that do, a third said that offering coverage contributes significantly to their healthcare spend.
Coverage for weight loss is changing rapidly. Cost, demand, supply, new information and research regarding usage and side effects — these are all factors at play that continue to transform the situation. You’ve likely experienced this directly: many employees are asking for coverage and don’t understand why it’s not offered. Ultimately, this has made it a challenge for decision-makers at businesses in the US – regardless of their size and location – to know if they should offer their employees coverage.
While it is a complex and ever-evolving situation for both employees navigating coverage and employers determining whether to offer it, the right solution can be found by examining the whole picture. This includes not only understanding the current data and information and staying up to date, but it also means staying true to, as well as understanding, your business’ goals, culture and values.
GLP-1 Information for Employees
GLP-1 medications approved for type 2 diabetes: |
GLP-1 medications approved for weight management: |
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Understanding Your Current Coverage
If you are interested in accessing GLP-1 drugs for weight management, you will need to investigate their status under your employer-sponsored health plan. Start by checking your insurance benefit guide materials or contacting your insurer directly using the customer service number on the back of your insurance card to inquire about coverage qualifications. Key questions to ask:
- Is GLP-1 therapy a covered pharmacy benefit if prescribed for chronic weight management?
- What prior authorization rules or quantity limits apply for these medications?
- Are there step therapy requirements to try other medications first?
- Is there a weight management GLP-1 medication that is preferred on my plan?
Seeking Medication Approval
If coverage is in place for GLP-1 therapy for non-diabetic weight loss purposes, gaining authorization often still requires multiple approval steps beyond just having coverage.
Partner closely with your prescribing physician throughout the documentation and prior authorization to streamline the process.
If your prior authorization is denied you will receive notification from your insurer on next steps.
Standard Prior Authorization Criteria Requirements
Prior authorization criteria can vary by insurer, but some standard guidelines are listed below:
Diabetes |
Physician confirmation of diabetes diagnosis or Prior anti-diabetic medication use |
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Weight Loss Management |
Physician confirmation of BMI > 30 kg/m2 or BMI > 27 kg/mg2 + comorbidity (i.e. hypertension, type 2 diabetes, dyslipidemia) and Behavioral modifications |
BMI = Body Mass Index
Important Things to Keep in Mind
As with any medication, the GLP-1 drug class comes with a list of pros and cons.
While these medications can be highly effective in both helping control blood sugar for diabetic patients and weight reduction for overweight or obese patients they are not without side effects. The potential side effects include nausea, vomiting, constipation, abdominal pain and diarrhea.
These medications also come at a significant cost (with the average being $1,200 to $1,400 per month) and have experienced recent drug shortages, making access difficult at times. Your insurer can help you determine your expected out of pocket cost and copay amounts, and reaching out to your preferred pharmacy ahead of time to determine availability of your prescribed medication is always recommended.
From a pharmacist and clinician standpoint, there is clear value in the GLP-1 medications in both treating diabetes as well as weight management, but it is important to remember that these medications as class are relatively new. We still do not know the long-term effects, good or bad.
For those seeking a GLP-1 to help with weight loss, it is important to remember that medication alone is not the key to success but is instead a tool to be used to help you achieve your weight loss goals. A combination of medication (if deemed appropriate by your prescriber), healthy diet and increased physical activity are all pieces of the puzzle in helping to not only achieve your goals but to maintain them long term. It truly is about lifestyle change for lifelong success.
Employee information portion of the article was written by Melisa Horton, PharmD and Strategic Pharmacy Consultant.
For Employers Considering Coverage
Cost Coverage Factors
When choosing whether to offer coverage for GLP-1 drugs for weight loss, it is impossible not to consider the cost of this drug, both short and long term. In new estimates from the Congressional Budget Office, costs will still outweigh savings by about $3,650 through 2034 (at least for Medicare). Over time, however, they expect better ROI. Due to the nature of these medications as intended to be used long term, many employers have found the commitment to the current high price tag and uncertain future for the unit cost of the drug to be daunting or simply untenable.
Some insurance carriers are increasing their coverage of GLP-1 drugs for obesity or changing requirements for coverage to only include individuals who meet certain criteria, while others are removing it entirely or offering coverage for an increased fee.
However, some others have taken on this cost as a risk mitigation tool as obesity is a risk factor for chronic diseases and their associated costs. Beyond reduced heart disease risk that comes with weight loss, there's growing evidence that these drugs yield health benefits beyond diabetes and weight loss. Researchers from Loyola University Chicago suggest GLP-1 and GIP drugs may provide innovative treatment strategies for opioid and alcohol use disorders. In a new study released by the scientific journal Addiction, there was a 40% lower rate of opioid overdose in those taking GLP-1s compared with those who didn’t take the weight-loss drugs.
Rx Rebate Impact
Utilization management programs can be a good way for self-insured plans that offer GLP-1 coverage to save on costs while still offering coverage. However, some employers have found that suppliers have withdrawn, or have threatened to withdraw, drug manufacture rebates, meaning the per-unit cost of coverage would increase dramatically.
Shortages and Online Compounders
Considering shortages of the GLP-1 drugs, online compounders have emerged that have been permitted to make copies of the drugs. These compounds, while not FDA-approved, are often sold at prices significantly lower than their branded counterparts, making them highly desirable by those using for weight loss. Now that the FDA has announced that the shortages are over, there is a risk that the people using these compounds may be suddenly cut off.
Attraction and Retention Tool
While the cost and commitment to offering coverage for employees of GLP-1 drugs for weight loss is steep, some employers find it to be a tool for attracting and retaining top employees for their company. This largely depends on if this aligns with your company’s culture and what your people value. For some organizations with relatively high turnover – where benefits are not a value add to employees – it may not be an advantage. Some companies may not be able to offer GLP-1 drugs for weight loss even if they would like to. For others, finding a way to cover GLP-1s at a time when employer-coverage is not commonplace could be a differentiator in the job market.
A Comprehensive Analysis, not a Single Solution
In this rapidly changing environment, you need a partner that can help you navigate to the best decisions for your business. NFP’s experts have knowledge of the current market, stay up to date with the evolving situation, and are deeply committed to understanding your business to help you solve your toughest problems.