Yahoo Finance Large employers split on covering GLP-1 drugs for weight loss: Survey
Large US employers are split on whether or not to cover weight loss drugs that have surged in popularity over the last year, according to a new survey.
Research from the Business Group on Health (BGH) released Tuesday showed 46% of respondents said they already cover the diabetes and anti-obesity drugs, known as GLP-1s, for weight loss. Some 3% percent said they were adding it for the 2024 plan year and 13% said they were considering it for the following year.
By comparison, 92% said they already cover it for diabetes. Employers were given the option to reply that they were not considering coverage, but BGH did not provide the results.
Diabetes and weight loss drugs like Novo Nordisk's (NVO) Ozempic and Wegovy, and Eli Lilly's (LLY) Mounjaro, are called GLP-1s for the hormone they mimic, which slows digestion.
Only Wegovy is currently approved for weight loss in patients whose body mass index (BMI) is between 27 and 30.
The inclusion of GLP-1 coverage has been a contentious issue for employers this year, with some choosing to drop coverage as a result of the high costs. Some commercial insurers have not yet agreed to cover the drugs for weight loss only, or require stringent pre-approval processes.
Prices for four weekly injections can cost roughly $1,000 per month.
Washington, D.C.-based BGH conducts an annual survey of its 152 members, which include 19 million covered lives. The companies range in size from less than 10,000 employees to more than 100,000, and span industries.
"The most common criteria for covering GLP-1s for weight loss is that the drug must be indicated/approved for this purpose and paired with a lifestyle modification," the survey said, adding the patient must qualify as obese and have an additional health complication.
A nationwide shortage of Novo Nordisk's injectables, known also by their active ingredient, semaglutide, has spurred off-label access through compounding pharmacies and medical spas.
The company has tried to stop the sale of unauthorized versions of its drug, through lawsuits, and the FDA has warned about adverse events as a result of their use.
An expensive year ahead
But GLP-1s are just one facet of health care costs that are projected to increase by 6% in 2024, according to the survey.
While that increase is not as high as the 8.2% seen in 2021 as the pandemic continued to weigh on health needs, it is higher than previous years, according to BGH.
About 53% of employers said they are concerned about pharmacy benefits (PBM) costs related to long-term use of GLP-1s and other weight management medications. More than half were also concerned about high cost of new medications in the pipeline, including cell and gene therapies.
To that end, employers have indicated they are looking for alternative PBM options, BGH officials said Tuesday.
The trend can already be seen in California Blue Shield's recent announcement to replace a single large pharmacy benefits manager, (CVS), with a bundled vendor strategy.
Cancer remains the number one cost driver for these employers, and additional costs from mental health challenges are rising.
Some 77% of employers said there will an increased focus on mental health access for the company in 2024. That's down from 80% last year.
Almost all employers, 97%, said they would provide an online resource to address the access concerns last year. This year, more are turning to vendors, their insurers, or mental health navigation programs.
Still, around 70% of employers said they would offer a virtual solution.
"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," said Ellen Kelsay, president and CEO of Business Group on Health in a statement.
"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," she added.
Employers are taking on an increased burden of the increase in health costs. The total average health costs employers contributed to premiums this year exceeded $11,700, a jump from $10,300 in 2022.
But how long that can continue remains to be seen, BGH said Tuesday.
Follow Anjalee on Twitter @AnjKhem.
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