Navigating GLP-1 insurance coverage with the right pharmacy benefits manager

With the arrival of Ozempic, Wegovy and other GLP-1 agonists, a weight-loss drug boom is sweeping America, bringing a new wave of hope to the almost 115 million U.S. adults and children classified as obese.

The possibilities for such medications show no sign of stopping there. In March of this year, Novo Nordisk’s weight-loss drug, Wegovy, received FDA approval for lowering the risk of developing heart disease. The demand for weight-loss drugs is surging, including from those who don’t need them or are not aware of their side effects.

Studies indicate that up to 70% of people with diabetes on these medications stop taking them within two years due to side effects. Moreover, many people are likely to regain lost weight after stopping the drugs, and the psychological toll of that rebound can be damaging.

Obesity is much more complex than a simple medical issue, as it involves the interplay of physiological, cultural, societal and psychological elements. While medical treatment is important, it is also necessary to address these broader factors to meaningfully improve the lives of those living with obesity.

The complex nature of these weight-loss drugs makes them a challenging issue when it comes to insurance coverage. According to the International Foundation of Employee Benefit Plans, only 25% of employers provided coverage for GLP-1 drugs for weight loss in 2023. In this article, we’ll delve into the insurance market for weight-loss drugs, challenges and tips for companies planning to cover these pharmaceuticals.

Obstacles in insurance coverage

In 2024, the insurance market remains challenging for GLP-1s due to high pharmaceutical prices, off-label prescriptions, and the seemingly indefinable use and appropriateness for some patients who might just want to shed a few pounds. These factors have been enough to cause employers to pull back coverage for weight-loss drugs.

Purchasing weight-loss drugs without insurance coverage is expensive. Wegovy, for instance, has a list price of over $1,300 for a 28-day supply, while Ozempic can cost almost $1,000 per month without insurance.  According to a new analysis from KFF, weight-loss drugs are priced significantly higher in the U.S. than in other large, high-income countries.

For employers and health plans that cover most of the cost of prescription drugs, the bill for these medications can be overwhelming. The Mayo Clinic, for example, added a lifetime cap of $20,000 in spending on these drugs beginning Jan. 1, while North Carolina’s health plan for state employees recently decided to eliminate reimbursement for GLP-1s for weight loss beginning in April.

Due to these obstacles, insurers are finding it difficult to cover these drugs, despite the rise in demand. There has been an increasing number of people trying to either find a physician who will prescribe it to them off-label or seek the drug out online themselves.

According to propriety data obtained by Vital Incite, in the first quarter of 2023, 45% of members filling GLP-1s that are only approved for persons with Type 2 diabetes did not have a diabetes diagnosis. Despite the best efforts of employers, that off-label use improved only slightly, to 39% by the end of Q3 2023.

As these weight remedies become increasingly more popular, doctors are worried that people will associate them with “vanity,” rather than as a critical medication for diabetes patients. The potential consequences of taking weight-loss medication without a proper diagnosis, as well as the side effects, are concerning to both physicians and insurers.

Finding the right pharmacy benefit manager

Given such high off-label utilization, companies who decide to cover GLP-1 drugs are recommended to bring in outside clinical oversight by a pharmacy benefits manager (PBM). PBMs are companies that manage prescription drug benefits, playing a crucial role in promoting responsible health care and patient safety by establishing robust drug utilization controls, and monitoring the prescription and usage of prescription drugs, including GLP-1s.

PBMs can help guarantee requested medical documentation, and they use clinical criteria to ensure that medications are used appropriately. When specific drugs are not covered, employers may see an increase in off-label usage of these medications. Implementing a prior-authorization requirement or some form of management can help mitigate this issue. Prior-authorization criteria can enforce the conditions of the label, such as age, BMI thresholds or presence of comorbid conditions. Reauthorization criteria with documentation of weight loss from a baseline can quantifiably prove patients are benefiting from therapy and maintaining sustained benefits over time.

“Based on the increase of GLP-1 utilization, it is vital that employers ask the right questions to understand the criteria their PBM is applying for approval of these medications,” said Bob Eisendrath, Managing Partner, Alera Group Pharmacy Solutions.

Still a long way to go

While the adoption of novel weight-loss drugs into mainstream usage can lead to many new opportunities, the challenges insurance companies face regarding coverage cannot be solved hastily. There is still much work to be done.

Related: Should employer plans cover GLP-1s for weight loss?

For example, group plans should require doctors to prove that hopeful patients meet the criteria, conduct an A1C test and measure weight after six months of prescription to help validate the success of their treatment strategy. Just as bariatric pre-procedure authorization requires education and support to improve lifestyle strategies, the goal of physician oversight would be to enroll potential candidates for these medications in an educational or coaching program about nutrition, exercise, stress management and sleep improvement for a couple of months before the drug is eligible to be covered by insurance.

Implementation is another obstacle in the way of a solution here, as many primary care physicians, who may not have extensive training in obesity care, have taken on the role of gatekeepers. It is these professionals who are facing the brunt of questions regarding who should take these medications and why. There’s still a long way to go. Providers, insurers and regulators need to come together to ensure the safe use of these drugs, mitigate failed treatment attempts, reduce side effects and provide better insurance plans to support patients in need.

Mary Delaney, MS PT, CWP, Managing Partner, Vital Incite, an Alera Group Company