With obesity rates in the United States having tripled since the 1980s, the health care system now faces an annual cost of $173 billion due to obesity-related complications, such as heart disease, hypertension, joint pain and certain types of cancer. And employers, or health plan sponsors, shoulder a substantial portion of these expenses, prompting the question: Could drugs in the latest generation of medications approved to promote weight loss be a solution?
These medications, originally approved to treat type two diabetes mellitus, are known as incretin mimetics or GLP-1s. They work by mimicking a naturally occurring hormone (glucagon like peptide) that affects insulin and glucagon levels and also regulates appetite. One medication in this class is a dual acting agent that in addition to mimicking GLP-1 it mimics another gut hormone, glucose-dependent insulinotropic polypeptide (GIP) which also affects insulin and glucagon levels.
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In 2021, the American Diabetes Association updated diabetes treatment recommendations to include GLP-1s or SGLT-2 inhibitors (another medication class to treat diabetes) as a first line agent for some individuals. Previously the guidelines recommended GLP-1s or SGLT-2s as second line agents after metformin. Subsequently the 2023 guideline update reinforces that obesity is a disease and weight loss goals should be recommended for some individuals.
These treatment paradigm changes are impacting the utilization of GLP-1s as they have proved their effectiveness in managing diabetes and more recently promoting significant weight loss, but the immediate financial impact on plan sponsors remains a concern. Here's what plan sponsors need to consider.
The health benefits of treating obesity
Individuals who are overweight or obese are at risk for a number of serious health conditions and losing even a modest amount of weight reduces those risks. Even a 3% weight loss can improve HBA1C, dyslipidemia, and in some cases prevent the onset of diabetes. A 5% weight loss improves hypertension, osteo arthritis, and GERD. A more substantial 10% to 15% sustained weight loss can result in possible remission of type 2 diabetes and may improve cardiovascular outcomes and mortality.
Nontraditional utilization drivers — the impact of social media In addition to pharma's typical marketing tools to impact product utilization and market share, social media is making an impact. Celebrities' testimonials are contributing to increased demand for medications in this class to be used for weight loss. Another component of social media promotion and general consumer advertising are spas and clinics promoting weight loss services including telehealth visits resulting in individuals receiving prescriptions for GLP-1s as part of their offerings.
Obesity treatment options
Anti-obesity medications have been available in the U.S. for years, and many individuals benefit from their use. Older anti-obesity medications, while less expensive than the emerging incretin mimetics gaining popularity today, produce positive results, however weight reductions are less dramatic than that of the GLP-1s.
Research continues with additional GLP-1 agents seeking FDA approval for weight loss. Two of these are oral semaglutide (currently marketed as Rybelsus for diabetes) and tirzepatide (currently marketed as Mounjaro for diabetes. Amgen and Pfizer each have products in the pipeline that if they gain FDA approval will compete in the diabetes and/or obesity treatment space.
These medications undoubtedly aid in weight loss, and their demand is predicted to rise. However, both individuals and health plan sponsors must be aware of potential repercussions. Patients should understand that these drugs are not a simple solution and may cause side effects such as dehydration, fatigue, and gastrointestinal issues. Additionally, the safety of long-term use for weight loss remains unknown. Despite the hype, these medications are not intended for relatively healthy-weight individuals seeking to lose a few pounds. Additionally, once an individual discontinues treatment with these agents, many patients gain back some weight.
The cost of weight loss treatment
In an ideal world, plan sponsors would be able to provide access to these medications for all eligible members, reducing the long-term costs and risks associated with obesity. But the financial burden of covering these drugs can be substantial.
In the U.S., obesity rates are just over 40%, which means that a company providing insurance for 100 members could have up to 40 people who may benefit from weight loss medications. The resulting annual cost for these medications alone may exceed $240,000 to $500,000 for this group. In some cases, providing access to these drugs could "bankrupt" a plan or be the cost barrier that prevents an employer from being able to offer health benefits. That's why it's critical for plan sponsors to optimize their PBM formulary and utilization management programs and ensure that these medications are only prescribed to those who truly need them. For certain individuals, the long-term health care cost savings may be higher than the cost of the medication.
Product shortages — ensure your PBM covers a range of diabetes drugs on their formularies
The recent surge in demand for diabetes drugs, driven by earlier use in diabetes treatment and their widespread use for weight loss, has led to significant drug shortages. This increased interest in these medications has made it challenging for the intended original recipients – diabetic patients – to obtain them.
Diabetic patients who cannot access their usual medication may need to switch to an alternative. To address this issue, plan sponsors should ensure they cover multiple types of diabetes medications. By doing so, employees who cannot obtain their prescribed medication can still access a covered alternative.
To manage costs while still providing the best possible coverage, plan sponsors can leverage several strategies:
- Implement prior authorization to assure appropriate access to GLP-1s. Many plan sponsors exclude coverage for weight loss medications. If a plan sponsor does exclude weight loss products from coverage, prior authorization criteria should assure the GLP-1s are being used for diabetes. If a plan sponsor covers weight loss products, the prior authorization criteria should limit use to obese patients or patients who are overweight and also have additional risk factors.
- Provide education and promote healthy lifestyles and encourage weight loss programs.
- Consider covering and encouraging behavior health support to lead to long lasting lifestyle changes.
- Utilize a pass-through PBM, which may be more incentivized to help lower costs.
- Implement carve-outs for specific benefits, such as specialty pharmacy, to find lower prices.
- Pay attention to inventory control to avoid loss or waste, ensuring the quantity of medications matches the need.
It's essential for plan sponsors to have appropriate utilization management in place to ensure that the right patients receive the right medications, regardless of whether they decide to cover weight loss treatments. If weight loss medications are not covered, plan sponsors should make sure their formulary excludes those drugs indicated only for weight loss and that diabetes medications are used for approved medical purposes, not off-label weight loss.
Ultimately, plan sponsors must balance member needs, product supply issues, and cost containment options when deciding whether and how to cover new weight loss medications. By carefully taking into account these factors, they can make informed decisions that best serve their employees and manage the financial impact on their plans.
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