The stories about Ozempic, and other diabetes drugs that can also be used for weight loss, seem to be everywhere. The demand for the drugs has led to their shortage for the original purpose of treating diabetes. If they haven't already, employers may soon have to make difficult decisions about whether or how their plans will cover the drugs for weight loss.

Demand for weight loss drugs, in spite of the cost

The news stories about the use of the drugs for weight loss purposes has driven demand in spite of the cost, which can be as much as $900/month.  It is unsurprising, therefore, that plan participants want their employer's health care plans to cover the cost of the drugs.  But insurers and plans may make the coverage more difficult to get due to several factors, including the immediate cost, the ongoing cost of the plan, and whether the drugs will be effective long-term. Some recent data indicate that ongoing treatment, possibly indefinitely, is required to maintain weight loss.

Morgan Stanley discussed the potential for huge growth in demand in an article estimating that, "Some 25% of people with obesity will engage with doctors about their disease, up from 7% today. In turn, the analysts expect around 55% of those patients to be prescribed a new anti-obesity drug." The National Institutes of Health (NIH) estimates that 42% of adults are classified as obese. Extrapolating these numbers can lead to substantial expenses for employer plans. If only 22 employees are prescribed one of these drugs at an estimated cost of $19,800 per month, that single drug could cost the employer, $237,600 per year for the group. These drug treatments seem to be catching on with various groups (and even Weight Watchers is getting into the weight-loss medication business after decades of its focus on diet and exercise). With the intense focus on these drugs, employer health care plans will likely encounter increased costs.