The GLP-1 coverage dilemma for employers

Big costs require big decisions, as illustrated by how GLP-1s are causing leaders of hospital employee health plans to rethink their coverage plans. 

GLP-1s are a popular class of medications including Ozempic, Trulicity and nine others. Most are indicated for Type 2 diabetes, one (Wegovy) is approved for serious cardiovascular events, and three (Saxenda, Wegovy and Zepbound) are approved for weight loss. 

Most health plans cover the diabetes medications, but weight loss indications and off-label prescribing are complicating insurance coverage. 

For a four-week supply, the list prices of GLP-1s approved for weight loss range between $1,050 and $1,350. After these drugs grew in popularity in late 2022, many commercial and state health plans slowed or stopped covering GLP-1s for weight loss. 

Demand has not ebbed. In 2023, the U.S. healthcare industry spent $38.6 billion on semaglutide (Ozempic, Rybelsus and Wegovy) and $13.2 billion on tirzepatide (Mounjaro and Zepbound). Compared to 2022, expenditures increased 100.1% and 373.1%, respectively. 

"I think the biggest side effect of these drugs is sticker shock," Eric Tichy, PharmD, former chair of the End Drug Shortages Alliance, told Becker's in January. "For a lot of insurance plans, it's become the No. 1 expense they have, especially if they cover weight loss — and everyone wants to use it."

Multiple health systems have removed weight loss drugs from their employer-sponsored plans. 

In 2024, West Orange, N.J.-based RWJBarnabas Health and Minneapolis-based Hennepin Healthcare stopped covering GLP-1s when prescribed for weight loss because of fleeting adherence and high costs.

Austin-based University of Texas System, Bloomington, Minn.-based HealthPartners, Minneapolis-based Fairview Health Services, Rochester, Minn.-based Mayo Clinic and St. Louis-based Ascension have also trimmed coverage. 

"It's become a huge concern for these insurance plans because they're paying out a very large cost for these medications," Dr. Tichy said. "There are so many people who could be eligible for it that it's straining health plan budgets."

Two trends are running concurrently: Some employers are dropping the drugs from formularies and others are increasing coverage, according to Cigna Group executives and data from the International Foundation of Employee Benefit Plans. 

After the FDA approved Wegovy for certain heart conditions in March, Elevance Health, Kaiser Permanente and CVS Health expanded GLP-1 coverage. Sentara Health Plans did the same. 

"Cardiovascular risk reduction indications for GLP-1s used for diabetes and for weight loss blur the lines for drug coverage," Kristyn Greifer, MD, senior vice president and chief medical officer of Sentara Health Plans, told Becker's. "This trend will pose a challenge to any health plan's management of its drug benefit."

Sentara Health Plans is the health plan division of Sentara Health, a Norfolk, Va.-based system with 12 hospitals. 

The equation for GLP-1 coverage will likely become more entangled in the coming years. As of July 1, Eli Lilly is hoping for sleep apnea treatment approval for Mounjaro and Novo Nordisk is waiting to see if the FDA approves Ozempic for kidney disease-related events

"As the landscape evolves, all health plans will need to be thoughtful and nimble in its decisions around coverage and cost," Dr. Greifer said.

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