GLP-1s: The New Era of Weight Management

May 23, 2024
By Jill Ambrose and Daniel Keenan

Over the past year, weight loss drugs have dominated the news and public discourse. While initially developed to treat diabetes, glucagon-like peptide 1 (GLP-1) agonist medicines, like Ozempic and Wegovy, have become popularly known as obesity drugs, skyrocketing patient demand. The GLP-1 market is expected to exceed $100 billion by 2030, a rapid growth from $22 billion in 2022.

While GLP-1s are an effective treatment for members with diabetes, obesity and related cardiovascular diseases, they come with a hefty price tag. Employers and plan sponsors are already seeing the effects of a burgeoning GLP-1 market, with some seeing hundreds of thousands to millions of dollars in new GLP-1 costs in 2023 alone and spend has only continued to increase in 2024. As more members pursue GLP-1 medications, it can be a challenge for employers to efficiently determine which members would benefit from having access to these ground-breaking medications.

Here’s what employers and plan sponsors need to know about this growing market to best position themselves to mitigate risk.

The Cost of Obesity
Obesity is a far more complex condition than recently thought, and it requires more than just willpower and exercise to control. The rise of GLP-1s has brought obesity and weight management to the forefront in population health thanks to their efficacy in weight loss.

It’s estimated that 15 million obese patients will be using GLP-1s by 2030. For employers and plan sponsors, obesity can nearly double medical expenses for members. On average annual direct medical costs are $3,000-$6,500 higher for obese individuals. Additionally, absenteeism is 128% higher on average for obese workers compared to non-obese workers.

The GLP-1 Pipeline
With patient demand expected to continue its rapid growth, there are concerns around availability of GLP-1s and ensuring that diabetes patients for whom the drugs are intended can get the medications they need. At the same time, the GLP-1 pipeline continues to grow. There are 10 GLP-1s currently on the market, but there are numerous drugs in pre-trial, stage 1, stage 2 and stage 3 clinical trials.

While this growth is promising for diabetes and obesity patients, insurance coverage for GLP-1s is often limited and their monthly cost is about $1,000. With no generics to hit the market yet, costs are not likely to come down in the near term.

Cost Containment Strategies
As more members seek GLP-1s to treat diabetes and obesity, employers and plan sponsors should start planning for increased utilization and implement cost containment strategies to mitigate risk.

1. Consider limiting coverage of GLP-1s to Type 2 Diabetes
This would curb off-label use of GLP-1s for weight loss within your member population, while still ensuring patients with Type 2 diabetes have access to the drugs to manage their condition.

2. Assess the risks or benefits of GLP-1 coverage based on your member population
The need for GLP-1 coverage can vary depending on the demographics of your member population. Patient data and preventive screenings can help determine if your member population is at higher risk of diabetes and/or obesity.

3. Implement additional controls
Prior authorization can help with utilization management of GLP-1s by requiring that patients meet a drug’s indication before it’s covered by the health plan. Another control option is vendor solutions that connect members with obesity specialists to develop a treatment plan that can work in tandem with or in place of GLP-1s.

4. Offer weight management support programs
Weight management support programs that focus on healthy living are another lower cost option that can help members make the behavioral changes that are necessary for successful weight loss without the need for medication.

GLP-1s will continue to be a topic of interest for employers and plan sponsors in the coming years. Conner Strong & Buckelew’s Employee Benefits team monitors developments in the market and is ready to help employers and plan sponsors find effective solutions for their member populations.

For more information on how our team can help, please reach out to your Conner Strong & Buckelew representative, call us at 1-877-861-3220 or email [email protected].

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Wellness & Population Health

Jill Ambrose
Partner, Director, Population Health

Daniel Keenan
Vice President, Business Development Executive