GLP-1 drugs, originally designed to help manage type 2 diabetes, have exploded in popularity over the last year. Cleveland Clinic describes GLP-1 agonists as a class of medications that mainly help manage blood sugar levels for people with type 2 diabetes, but notes that due to the drugs’ satiety effect, they often result in weight loss. This has raised questions about the drugs’ role in treating obesity – and many employers are currently considering whether they should cover these drugs for weight loss.
What’s the Big Deal with GLP-1 Drugs?
According to Global Market Insights, the GLP-1 market is expected to grow at a CAGR of around 9.6 percent from 2023 to 2032, with a market size of approaching $55.8 Billion dollars.
Information seems to suggest that glucagon-like peptide 1 agonist (GLP-1) drugs, which have primarily been used to treat type 2 diabetes, help people lose weight, mainly by suppressing appetite and inducing “full” feelings.
However, GLP-1 drugs are far from cheap, clocking in at between $900 and $1,400 for a month’s supply, creating a serious challenge for employers considering funding them for weight loss.
And cost is not the only concern. Research also suggests GLP-1 drugs are linked to adverse gastrointestinal events in weight loss patients, including pancreatitis, gastroparesis and bowel obstruction. This is something that individuals and employers may want to consider before opting to use or fund GLP-1 drugs for weight loss.
The Current State of GLP-1 Drug Availability
Perhaps sparked in part by a TikTok trend, of all things, demand for GLP-1 drugs has accelerated since early 2020, with various celebrities endorsing the drugs’ effect on their ability to lose weight, leading to a surge in both demand and prescriptions, particularly in the U.S.
The net result has been that some diabetes sufferers are struggling to access certain GLP-1 drugs for their primary purpose of managing type 2 diabetes.
Funding GLP-1 Drugs for Weight Loss
So…what about weight loss?
Obesity is a major driver of US health care costs for both individuals and employers. Losing weight may be an effective way to reduce these costs. One study by John Hopkins Bloomberg School of Public Health suggested: “Helping an adult lose weight leads to significant cost savings at any age.”
Losing weight may also be a factor in reducing the risk of type 2 diabetes. The CDC notes for patients with prediabetes, “losing a small amount of weight if you’re overweight and getting regular physical activity can lower your risk for developing type 2 diabetes.” The CDC also states that engaging with the National Diabetes Prevention Program — which focuses on weight loss and increased physical activity — can help make lifestyle changes to lower a patient’s risk of developing type 2 diabetes by up to 58 percent, or 71 percent for over 60s.
The American Diabetes Association’s new report, the Economic Costs of Diabetes in the U.S. in 2022, notes that national health care costs attributable to diabetes have increased by $80 billion in the past 10 years — from $227 billion in 2012 to $307 billion in 2022. And what’s more, on average, people with diagnosed diabetes have medical expenditures 2.6 times higher than would be expected without diabetes.
There are also indirect costs associated with type 2 diabetes, including increased absenteeism and reduced work productivity. These costs are borne by the employer, so employers may consider covering GLP-1 drugs for weight loss on the basis of maintaining a healthy and productive workforce.
The Employer Coverage Debate
The big topic of conversation for plan sponsors in this arena centers around covering injectable GLP-1 drugs for weight loss and how to manage the associated costs. As we approach the 2024 benefits season, many employers are contemplating whether to add or continue coverage for these drugs in the years to come. One of the biggest concerns for employers who are considering coverage may be the large potential market due to prevalence of obesity.
While covering these drugs may serve employees’ needs and potentially increase satisfaction with their employee benefits package – positives in the checklist – many employers hesitate to offer new coverage from a cost perspective alone. And there are more questions employers may be exploring with respect to covering GLP-1s for weight loss.
- What about coverage for diabetics who are taking the medication already?
- Should discounts be provided for the elimination of comorbidities or for multiple medications associated with diabetes and obesity?
- Will employees adhere to the medication for the long-haul?
Keep in mind that aside from GLP-1 drugs, comprehensive obesity care can include behavioral health therapy, medically managed weight loss programs, lower-cost weight loss medications and even surgery. Additionally, intensive support is typically required to ensure that members remain compliant with behavior changes for the long-term.
Ultimately, these are decisions each employer must make based on its own employee population.
Understanding how employees take prescription drugs from a claims perspective is critical. It may be that taking GLP-1 drugs for weight loss is an effective intervention for some employees that will improve health outcomes and reduce costs. For others, it may be simply an expense that doesn’t meaningfully improve health or financial outcomes.
When making these types of decisions, it’s essential that you understand how your workforce consumes health care, and what the greatest cost and health drivers are for your employee population. This requires careful analysis of claims data, and ideally, a solution that readily provides claims insights to support your decision-making process.
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This information is for general informational purposes only and nothing herein is intended to, or does, provide or replace medical advice from a properly licensed healthcare provider.