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Wegovy, Ozempic and other new GLP-1 agonist drugs can control diabetes, melt pounds away and, possibly, perform other medical miracles, but it's not good for employers' financial wellness.
Employers told the Business Group on Health that they believe the popularity of high-cost GLP-1 agonists is one of the main reasons health care cost increases are picking up.
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The 125 employers that participated in the group's latest annual health care strategy survey predicted that their health care costs would increase about 7.8% in 2025, before plan design changes, up from an increase of 7.2% this year and 6.6% in 2023.
Employers are hoping plan design changes will hold the actual health care cost increase to 6.6%.
About 57% of the 118 employer benefits decisionmakers who answered a question about cost drivers classified GLP-1 agonist spending as "driving health care costs to a great or very great extent," and GLP-1 agonists topped the list of 2024 cost drivers.
Other high-cost therapies ranked second, with 46% of the participants classifying them as major cost drivers.
Fewer than 10% blame health care system fragmentation, fraud, waste, abuse or poor quality providers for rising costs.
The backdrop
The Business Group on Health 2025 cost increase forecast is comparable to what other forecasters are finding.
The International Foundation of Employee Benefit Plans and PwC are predicting an 8% increase, and Aon is predicting a 9% increase.
Some groups have talked more about catastrophic health care problems as a driver of cost increases.
What it means
Both Donald Trump and Kamala Harris have made the high cost of prescription drugs a campaign issue, and prescription drug prices could become an increasingly hot topic over the next year.
Harris has lines about "pharmaceutical companies who block competition" and "pharmaceutical middlemen who squeeze small pharmacies' profits and raise costs for consumers" in her economic plan.
This may be a year when benefits managers and benefits brokers need to focus on coming up with creative ideas for holding prescription costs down.
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
