This article is sponsored by NFP.
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 approved for both the treatment of type 2 diabetes and for long-term weight management. Most health plans cover GLP-1 drugs for diabetes without any issues. However, coverage for weight management varies by plan.
According to a study conducted in October of 2023 by the International Foundation of Employee Benefit Plans (IFEBP), as use has increased, so has employer coverage, regardless of intended use: “Employer coverage of the drugs is up 8 percentage points since last fall, with roughly one-third of companies now offering GLP-1 drug coverage for both diabetes management and weight loss.”
Data suggests that more employers are intending to offer coverage for GLP-1 drugs. In an employer survey on sentiment and adoption of GLP-1 medications by Accolade and Savanta, 25% of survey respondents said that they currently offer coverage and 43% said they intend to offer coverage in 2024.
However, with the high cost of the drugs (with the average cost around $1,200 to $1,400 per month), some employers are weighing if it’s worth it. As GLP-1 medications continue to see a rise in use, is it essential for employers to find plans that help cover the cost of these medications for both diabetes and weight management, or is the use of these medications part of not-so staying trend?
Arguments in support of increased coverage
There is strong evidence regarding the benefits of GLP-1 medications, as they demonstrate significant advantages beyond diabetes control. These advantages include weight loss and potential cardiovascular disease prevention, which could be seen as cost-effective by insurers. Patient advocacy is also gaining momentum and growing demand for access to these medications, especially for weight management, could push for broader insurance coverage. Additionally, clinical evidence and guidelines play a critical role, as endorsements from major health organizations (e.g., American Diabetes Association, American Heart Association) could drive broader coverage based on clinical efficacy. Lastly, ongoing new research into other potential uses of GLP-1 medications could strengthen the value proposition for insurers.
Challenges against increased coverage
Despite the potential benefits of GLP-1 medications, several challenges may create an obstacle to increased coverage. The high cost of GLP-1 medications presents a financial burden for insurers. Additionally, an ongoing debate regarding obesity vs. diabetes persists with some insurers potentially hesitating to cover GLP-1 medications solely for weight loss, especially given the current lack of coverage for obesity medications in the ACA Marketplace. Furthermore, there is a need for clearer guidelines from medical organizations on how and when to prescribe GLP-1 medications, as this could help insurers establish consistent coverage policies.
Possible future scenarios
As the landscape of GLP-1 medication coverage evolves, there are several scenarios that insurers may follow. Some insurance companies may implement tiered coverage with higher copays or stricter prior authorization requirements for GLP-1 medications used for weight loss compared to those used for diabetes or cardiovascular disease prevention. Another possible scenario is a focus on evidence-based use, where coverage may become more focused on specific patient populations with strong evidence of the benefits, such as those with both obesity and diabetes. We may also see more negotiations and cost-sharing as increased negotiations between insurers, pharmaceutical companies, and patient groups may make GLP-1 medications more affordable and accessible.
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