Employees seeking these medications are not just looking for weight loss; they are navigating serious health challenges that impact their quality of life, productivity, and overall wellbeing. Employers who take a thoughtful, proactive approach can help manage costs while ensuring employees receive the care they need. This article explores the growing utilization of GLP-1s, their cost-benefit considerations, and actionable strategies to support employees while maintaining financial sustainability.

GLP-1 utilization is surging & so are costs

Over the past four years, data shows that spending on GLP-1 agonists has surged 272%, making them one of the fastest-growing drivers of pharmacy costs. While these medications deliver promising health outcomes, their rapid adoption is reshaping employer-sponsored health care plans, including:

• GLP-1 drugs now account for nearly 16% of total prescription drug spending.
• The average monthly plan-paid cost among diabetic claimants has increased by $179 per month (from $300 to $479) in just four years.
• Diabetes and obesity-related treatment costs are rising, placing additional financial strain on employer health plans.

Who’s using GLP-1s? The story behind the numbers

Despite widespread media attention framing GLP-1s as a weight-loss revolution, the reality within employer health plans tells a more nuanced story.

• The majority of GLP-1 spending remains tied to employees with type 2 diabetes, where these drugs play a critical role in blood sugar control and cardiovascular risk reduction.
• Obesity-related claims are increasing but still lag behind diabetes-driven utilization.
• Approximately 3% of all insured members had a GLP-1 prescription in the past year, with higher prevalence among employees managing both diabetes and obesity.

Balancing cost vs. clinical benefit

For employers and their consultants, GLP-1 agonists present a difficult equation: significant short-term cost increases versus the potential for long-term health improvements and cost savings. Research suggests these medications can reduce hospitalizations, cardiovascular complications, and other costly interventions associated with diabetes and obesity. However, the immediate budget impact cannot be ignored.

• Clinical evidence supports the long-term value of GLP-1s, particularly in reducing diabetes-related complications, cardiovascular events, and overall health care utilization.
• Employers must determine whether the potential downstream cost savings outweigh the upfront financial impact.
• Consideration of alternative treatment pathways—such as structured weight management programs—can help balance affordability with access.

Strategies for employers to manage GLP-1 costs

HR and benefits leaders, along with the brokers and consultants who support them, play a crucial role in ensuring GLP-1 access is both cost-effective and equitable. These partners can help evaluate formulary strategy, implement utilization management protocols, and identify cost-saving opportunities through pharmacy benefit optimization. With the right strategic approach, employers can maintain financial stability while supporting employees who rely on these treatments.

1. Step therapy, prior authorization, and quantity limits

• Implement step therapy protocols, requiring employees to try lower-cost, clinically appropriate medications before accessing GLP-1s.
• Require prior authorization to ensure prescriptions align with FDA-approved indications and established clinical guidelines.
• Apply quantity limits to reduce waste and unnecessary spend related to drug discontinuation or non-adherence.
• Establish medical necessity criteria—especially for non-diabetic populations—to ensure appropriate use.
• Collaborate with pharmacy benefit managers (PBMs) and health plans to monitor prescribing patterns and enforce utilization management strategies.

2. Targeted education and employee engagement

• Educate employees on lifestyle modifications that can complement or reduce reliance on GLP-1s.
• Offer weight management and diabetes prevention programs as non-pharmacological alternatives.
• Provide clear plan guidelines to help employees understand eligibility, available treatment options, and potential out-of-pocket costs.

3. Pharmacy benefit optimization

• Negotiate rebates to reduce net costs through PBM partnerships.
• Regularly review formulary design to align cost-containment strategies with clinical effectiveness.

A call to action: A sustainable path forward

GLP-1 agonists represent both a breakthrough in chronic disease management and a financial challenge for employer-sponsored health care plans. The key is not to view them as a binary choice—either covering them in full or restricting access entirely—but rather as part of a broader, strategic approach to employee health.