Topline
More employers could cover popular weight loss and diabetes drugs like Ozempic and Wegovy in 2024, allowing workers to avoid steep out-of-pocket costs, a new survey found—though the drugs’ high costs have caused other workplaces to either stop coverage altogether or up monthly co-pays.
Key Facts
Around 43% of the 500 employers who participated in a new survey by healthcare advocacy service Accolade and research firm Savanta said they plan on covering GLP-1 receptor agonist medications in 2024, almost double the number that covers them in 2023 (25%).
Ozempic, Wegovy and Mounjaro are part of a class of drugs called GLP-1 receptor agonists that can manage weight loss and type 2 diabetes by interacting with the hunger part of the brain to suppress the appetite and lowering blood sugar and A1C.
About 48% of employers said a lack of trusted information was the biggest obstacle holding them back from covering the drugs for their staff, and 38% cited costs of the medications as a potential problem.
Almost all of the employers who already cover GLP-1 receptor agonists said they’d continue covering them in the future, with one third reporting a “strong financial impact” from adding them and more than two thirds reporting an increase in enrollment after the drugs were added.
Most HR professionals surveyed agree that covering these drugs will help employees’ health in the long run and make employees feel like they have a better insurance package.
However, the costs of these drugs without insurance coverage can be steep, with some costing over $1,000 for a 28-day supply.
Big Number
$77 billion. That’s how large Morgan Stanley estimates the weight loss medication market to be by 2030.
Crucial Quote
“For the 43% planning to offer coverage next year, we recommend a physician-led approach that guides who should be prescribed GLP-1 medications and how to make them part of a holistic health management plan,” James Wantuck, Accolade’s associate chief medical officer, said in a statement part of the survey.
Key Background
Popular weight loss and diabetes medications are expensive without insurance coverage. Eli Lilly’s Mounjaro (which is still seeking FDA approval for weight loss) costs $1,023 per fill, Novo Nordisk’s Wegovy is $1,349.02 per package and Saxenda is also $1,349.02 per fill. Ozempic—though only approved for use in diabetes and used off-label for weight loss—is $935.77 per package. Although pharmaceutical companies offer savings cards for most of these drugs, some people might still have to pay hundreds of dollars out of pocket. Wegovy’s savings card only covers up to $225 per each 28-day supply for 12 fills. The fact that these GLP-1 drugs have rapidly gained popularity has also played a part in their costs. Their popularity has caused multiple shortages as manufacturers couldn’t keep up with demand. Their high demand is due to their decent weight loss results: Mounjaro helps patients lose around 22.5% of body fat, semaglutide (generic name for Wegovy and Ozempic) has been found to cause a 15% reduction in body fat and Saxenda causes a 5% drop.
Contra
Some companies have stopped covering GLP-1 receptor agonists and other anti-obesity drugs due to their high costs. Ascension, a nonprofit healthcare system, stopped coverage in July, forcing employees to pay out of pocket. The University of Texas system stopped coverage in September, citing the cost for the drugs almost tripling over 18 months from $1.5 million to $5 million a month. In its newsletter, the company said continuing coverage was “unsustainable due to the current rate of prescription drug expenditures.” Other large employers like the University of Michigan have opted to increase their monthly copays: The university spent almost $9 million on Wegovy and Saxenda between July 2022 and June 2023, so it’s bumping the copay up from $20 to $45 a month, Bloomberg Law reports. Angela Fitch, president of the Obesity Medicine Association, told Healthline another barrier holding companies back from covering GLP-1 receptor agonists is the fact people have to continuously take them for a long period of time. “When you take into account how long patients are taking them and the number of patients eligible, the cost adds up,” she said.
Wegovy Shortage: Drug Maker Limits Distribution—Here’s When Supplies Should Improve (Forbes)
What To Know About Ozempic: The Diabetes Drug Becomes A Viral Weight Loss Hit (Elon Musk Boasts Using It) Creating A Shortage (Forbes)
Diabetes Drug Mounjaro Expected To Be Approved For Weight Loss Soon: What To Know And How It Compares To Similar Drugs (Forbes)
Insurance Providers Are Halting Coverage of Ozempic and Other GLP-1 Drugs (Healthline)
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