Many US companies are grappling with worker health insurance coverage issues regarding GLP-1 drugs for weight loss.
Despite their hefty prices, typically $1,000 to $1,500 a month, consumers are clamoring for drugs like Novo Nordisk’s Wegoby and Eli Lilly’s Zepbound. This class of drugs, which have historically been used to treat diabetes, is attracting broader interest, with some employers offering coverage, often with restrictions, but without breaking the bank. Some employers are struggling to decide how to do this.
October investigation A survey of 205 companies by the International Employee Benefit Plans Foundation found that 76% of respondents offer coverage for GLP-1 drugs for diabetes, while only 27% offer coverage for weight loss. was. However, 13% of plan sponsors said they were considering compensation for weight loss.
“There are still a lot of questions among employers at this point,” said Julie Stitch, vice president of content at the International Employee Benefits Foundation. In addition to high costs, companies lack long-term data on efficacy or potential side effects to support coverage, and some are waiting until more such information is available.
Still, many benefits experts say it’s a matter of when, not if, more employers will cover GLP-1 drugs.
Indeed, prescriptions for GLP-1 weight loss drugs have skyrocketed. Investor enthusiasm for the obesity market has led Novo Nordisk to recently become Europe’s largest listed company, having just made a major acquisition to increase its manufacturing capacity for GLP-1 treatments in response to demand, leading drug manufacturer The company just expanded with its $16.5 billion acquisition of Catalent. Wegovy and Diabetic Shot Ozempic Supply.
Meanwhile, Eli Lilly’s recent results were supported by the launch of Zepbound, which won US regulatory approval in early November and generated sales of $175.8 million in the fourth quarter. Wall Street’s most optimistic estimate is that the drug could generate more than $1 billion in sales in its first year and eventually become the biggest drug in history.
Here’s what employers and employees need to know about weight loss drugs and health insurance coverage changes.
Annual cost is $18,000 per employee
At least 70% of the top 18 commercial health plans tracked by Tufts Medical Center in its specialty drug database cover GLP-1 drugs for obesity, with varying limitations. But because America’s largest companies are typically self-insured, they make the decisions about coverage, and cost is a big issue for them.
States can decide whether to cover weight loss drugs under Medicaid. This means that coverage can vary. report From KFF. North Carolina recently decided to discontinue coverage of obesity drugs for state employees.
Medicare does not cover weight loss drugs, except for people with type 2 diabetes. Remarkably, 76% of older adults think Medicare should cover prescription drugs for weight management. recent discoveries From a national poll on healthy aging.
At $1,500 a month, an employer could be paying $18,000 a year to supply one employee with weight loss drugs, said Greg Stancil, senior account executive at Scott Benefit Services. It is said that there is a sex. For example, if 56 employees use the drug, that’s more than $1 million a year. This is “a cost that didn’t exist in 2022, but now it’s a potential long-term expense and we’re looking at what to do about it,” Stancil said.
“A balance requires maintaining a strong benefits package that allows you to recruit and retain employees, while also managing the cost of that package to keep costs down for employees and employers. ” Stancil said. “Every employer wants to pay for everything to make everyone happy, but someone has to pay for it.”
Employers already cover weight loss drugs, but say it’s worth it
According to one survey, 99% of companies that already cover GLP-1 said they plan to continue covering GLP-1 in the future. investigation By Accolade, a personalized healthcare company. These employers cite, among other things, increased employee satisfaction and well-being, increased participation in other benefit programs, and other improvements in health outcomes as reasons for coverage.
“Human resources and benefits leaders recognize that this is a desire of their employees, as many people want to lose weight,” said James Wantuck, Accolade’s deputy chief medical officer. he said.
BMI, obesity, and questions in plan design
While losing weight and its associated health benefits are obvious, there are other health care and cost concerns that employers must consider.
How can it be used within the company? Who should be covered? Should there be restrictions, such as people who have been diagnosed with obesity or whose BMI exceeds a certain value?
According to a study by the International Employee Benefit Plans Foundation, the majority (79%) of companies that cover these drugs require their insureds to jump several hurdles before coverage is approved. ing. This includes requesting prior permission. using step therapy (32%); This requires the use of other lower-cost drugs first. and specific eligibility requirements (16%). The study also found that companies with multiple cost management options also use annual and lifetime maximums, where applicable. Her 14 percent of respondents covering these medicines said there were no cost control mechanisms in place.
Potential long-term costs for employers are an issue, especially since no one really knows how long they will need to take the drug to get long-term effects, making the calculations especially difficult. However, once you stop taking the medication, your weight will return to normal.
Employers are “having a very hard time determining costs and benefits,” Stitch said.
Despite their high price, GLP-1 drugs currently account for only 6.9% of annual claims, according to data from the International Employee Benefit Plans Foundation.
How consumers can try to save money in the meantime
Consumers whose companies do not cover their medications are in a difficult position. Brian O’Connell, an insurance market analyst at InsuranceQuotes.com, said many people will be forced to pay out of pocket or lose out. “Really, it depends on your bank account. If you make $45,000 a year, have a mortgage and kids in college, your options are limited,” O’Connell says.
Wantuck said employees first need to know the actual benefits from their employers. In some cases, these medications may be covered, but restrictions and requirements may apply, such as his BMI threshold to qualify, or the employee must participate in an exercise or diet program. There may be cases.
Commercially insured consumers may be able to receive assistance through the manufacturer if they qualify for a savings program.website of wegobee and zep bound Clarify the terms of any manufacturer discount programs that may apply. For example, Wegovy requires a prescription and you cannot enroll in a plan that covers drugs. Consumers should read the restrictions carefully.
According to Novo Nordisk, approximately 50 million U.S. adults have coverage for anti-obesity drugs, including 40 million through commercial insurance and 10 million through Medicaid. Approximately 80% of U.S. Wegovy patients pay less than $25 per month. Novo Nordisk and Eli Lilly offer significant savings off list prices for uninsured or commercially insured patients who pay cash for their prescriptions (and are not a government beneficiary) According to Novo Nordisk, it can cost up to $500. Eli Lilly says discounts of up to 50% are available, but monthly and annual discounts are subject to caps.
“It never hurts for consumers to look for and apply for manufacturer coupons and discounts,” Krutika Amin, associate director at KFF, a health policy, research and media organization, wrote in an email. “While the answer may be no in certain cases, patients could potentially save hundreds of dollars in other situations.”
Amin added that as more manufacturers enter the GLP-1 market, they may offer competing discounts to encourage patients to choose their drug. “Although the market is still new, as demand stabilizes and competition intensifies in the GLP-1 market, manufacturers may change their prices to remain competitive. Therefore, even if the previous answer Even if the answer is no, it might be worth looking into,” she wrote.
For some U.S. consumers to look overseas for expensive medicines is unlikely to help in this case, at least for now.meanwhile Recent KFF research Even with coupons and discounts, prices in the U.S. remain higher than in other large, wealthy countries, Amin said, as countries face a shortage of people using diabetes drugs. , said it may be impossible to obtain these drugs overseas.
Benefits consultants, on the other hand, expect that coverage issues will eventually resolve themselves, given the need and long-term benefits that these drugs can potentially provide.
“It’s only a matter of time before most companies cover these drugs in some way,” Wantuck said. “There’s a lot of evidence that these drugs help people lose weight and prevent serious illnesses such as strokes and heart attacks. It’s going to become increasingly difficult not to cover these drugs. Because it looks bigger.”
