Large US Employers Split on Coverage of Weight Loss Drugs, Survey Finds
A new survey conducted by the Business Group on Health (BGH) revealed that large US employers are divided on whether or not to cover weight loss drugs that have gained popularity in the past year. The survey showed that 46% of respondents already cover the diabetes and anti-obesity drugs, known as GLP-1s, for weight loss. Additionally, 3% said they planned to add coverage for these drugs in the 2024 plan year, while 13% were considering it for the following year.
In comparison, the survey found that 92% of employers already cover GLP-1s for diabetes. However, the results did not include data on how many employers were not considering coverage for weight loss drugs.
GLP-1 drugs, such as Novo Nordisk’s Ozempic and Wegovy, and Eli Lilly’s Mounjaro, mimic a hormone that slows digestion. Currently, only Wegovy is approved for weight loss in patients with a body mass index (BMI) between 27 and 30.
Coverage of GLP-1s for weight loss has been a contentious issue for employers due to the high costs involved. Some employers have chosen to drop coverage as a result, and some commercial insurers have not yet agreed to cover the drugs solely for weight loss or have strict pre-approval processes in place. The price for a month’s supply of four weekly injections can be approximately $1,000.
The BGH survey, which is conducted annually and includes 152 member companies covering 19 million lives, revealed that healthcare costs are projected to increase by 6% in 2024. While lower than the 8.2% increase seen in 2021 due to the ongoing pandemic, it is higher than in previous years.
According to the survey, about 53% of employers expressed concerns about pharmacy benefits costs related to long-term use of GLP-1s and other weight management medications. They also expressed worries about the high costs of new medications in the pipeline, such as cell and gene therapies. As a result, many employers are seeking alternative pharmacy benefit manager (PBM) options.
Cancer remains the primary cost driver for these employers, and costs related to mental health challenges are also increasing. The survey found that 77% of employers plan to increase focus on mental health access in 2024, down slightly from 80% in the previous year. Employers are turning to vendors, insurers, and mental health navigation programs to address these concerns, with 97% planning to provide an online resource.
Ellen Kelsay, president and CEO of Business Group on Health, stated, “Our survey found that in 2024 and for the near future, employers will be acutely focused on addressing employees’ mental health needs while ensuring access and lowering cost barriers. Companies will need to creatively and deftly navigate these and other challenges in the coming year, especially as they remain committed to providing high-quality health and well-being offerings while managing overall costs.”
BGH highlighted that employers are shouldering an increasing burden of rising healthcare costs. The average health costs employers contributed to premiums this year surpassed $11,700, up from $10,300 in 2022. The sustainability of this trend remains uncertain.
In conclusion, large US employers are grappling with the decision of whether or not to cover weight loss drugs amid their rising popularity. The survey results underscore the varying approaches taken by employers regarding GLP-1 coverage and highlight the challenges they face in managing healthcare costs while prioritizing employee well-being.
Follow Anjalee on Twitter @AnjKhem.
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