Grappling with weight loss drug coverage? Options to help employers control costs

Treating the nation’s obesity epidemic with promising new medications called GLP-1s may deliver impressive results and health benefits – but carries a staggering cost. Health expenditures for U.S. adults would soar by more than $1 trillion if all obese individuals initiated a treatment plan.

“These certainly are remarkable drugs with huge potential to help those who need them and who haven’t had a solution before,” said Ted Hong, chief marketing and engagement officer for Solera Health. “But along with the medication comes huge costs. How do we balance the two, and what’s the industry supposed to do?”

Several medical professionals tackled that question in “Addressing GLP-1 Demand with Step Therapy,” a recent webinar sponsored by Solera Health.

GLP-1s such as Ozempic and Wegovy are a class of medications that have been used to treat diabetes and now are being prescribed for obesity. “The comfort level for this new class of GLP-1s for obesity is because they have been in the market for a long time for people with diabetes,” said Gary Foster, Ph.D., chief science officer for Weight Watchers.

Now, however, the drugs are available solely to use for their weight-loss benefits. Five million GLP-1 prescriptions were written in 2022, a 2,082% increase from 2019, with the market expected to grow to between $100 billion and $200 billion within the decade.

“We are finding that if you increase the dose somewhat, there also is this weight loss effect that is even more pronounced than it was a decade ago,” said Dr. Dexter Shurney, chief medical officer for Modify Health. “This is what has captured everybody’s activity. There are still a lot of unknowns in terms of mechanisms of action but also in side effects and certainly long-term effects. It works on the pancreas but also on the brain in terms of making us feel a sense of fullness.”

But again, these benefits come at a steep price.

“The price point is quite high, especially when you think about how many folks are eligible for these medicines across the country –- anywhere from $12,000 to $16,000 a year,” said Dr. Byron Crowe, chief medical officer for Solera, which allows health plans and employers to leverage a network of digital health solutions.  “And a lot of people think these medicines are going to be a lifelong commitment. Research shows that if you stop the medicine, you regain most, if not all, of the weight.”

A recent survey by the Business Group on Health found that more than nine in 10 large employers are concerned about high-cost drugs in the pipeline, and 91% are concerned about pharmacy cost trends overall:46% of large employers covered GLP-1s for weight loss in 2023, another 3% plan to add coverage in 2024 and 13% are considering adding them for the 2025 or 2026 plan years.

However, it’s important to keep in mind that not everyone who might benefit from GLP-1s will use them. A step program of other weight-loss options, with GLP-1 as the final step if needed, often achieves the desired results at a lower cost. Think of step therapy as a pyramid with evidence-based diet and physical activity changes as the base. Next comes education and adjuncts such as food delivery or mental health support. This is followed by Gen 1 anti-obesity medications, which are less expensive and often generate satisfactory weight loss. Finally, at the top of the pyramid, GLP-1s can be prescribed if they are a covered benefit.

“It’s not uncommon to use step therapy in a variety of medical conditions,” Foster said. “”When it comes to obesity treatment guidelines, behavioral treatment is at the bottom as the foundation. The guidelines say that as body mass index goes up, you can go up in terms of the intensity of treatment. If anyone is going to go on a GLP-1 medication, given the expense, be sure they are ready to behaviorally engage. The FDA indication states that these medications are to be used only with a behavioral management program.”

Related: Americans are gaining weight, but should employers pay the price?

Solera expects to divert 30% to 60% of patients into another effective weight management option following step therapy. For every 10,000 eligible individuals pursuing GLP-1 therapy, this diversion yields an annual savings between $40 million and $72 million, according to the company, When consumers are educated and presented with effective options, they often make smart decisions that benefit not only their health but the bottom line.

“The biggest takeaway is that even when there is a lot of interest, when they actually get confronted with the realities of what it means to take a medicine for a long time, they may decide, `I’m not sure that’s the right choice for me. Let me think about what my other options are,” Crowe said.