Healthcare costs are a top-of-mind issue for companies nationwide. In 2024, employer-sponsored insurance costs increased approximately 4.5% in 2024, and experts predict an increase of 5.8% in 2025. Escalating medication prices are an important component of employer healthcare costs, with pharmacy benefit costs growing 7.7% in 2024. One key driver that can’t be ignored is GLP-1 drugs.
GLP-1s and Employer Coverage
In 2024, more employers paid for GLP-1-based obesity treatments compared to 2023. According to the Mercer National Survey of Employer-Sponsored Health Plans, 44% of employers with 500 or more employees covered GLP-1s (up from 41% in 2023), and 64% of employers with 20,000 or more employees covered GLP-1s (up from 56% in 2023).
In the United States, the list prices for GLP-1 drugs are high—ranging between $936 and $1340 before insurance, rebates, and discounts.
One encouraging development is that in December 2024, the FDA approved the first generic GLP-1 – liraglutide – for use by diabetics. While more generics are likely on the horizon, it may be some time before significant GLP-1 cost reductions are seen by employer-sponsored insurance plans.
A recent survey of employers found that strategies to control healthcare costs are the top priority over the next three to five years. Among companies with 500 or more employees, over half of respondents indicated that managing high-cost claimants is very important, and nearly one-third said it is important. With regard to managing the cost of specialty drugs, 41% said it is very important and 35% said it is important.
Managing GLP-1 Costs is a Multi-Layered Challenge
There are several reasons why GLP-1 costs may be mounting at your company. One is misalignment between members and GLP-1 usage. Given the hype about these drugs in social media and advertising, many believe that GLP-1s are a silver bullet solution for weight loss. As a result, members may obtain GLP-1 prescriptions even if they aren’t diabetic or obese.
Among members who are diabetic or obese, the effectiveness of GLP-drugs isn’t clear. In some cases, companies find that the reduced medical costs associated with GLP-1 induced weight loss and improved diabetes management are overshadowed by the cost of the drugs.
Abandonment of therapy is another issue. Research conducted by the Blue Cross Blue Shield Association found that over half of patients (58%) discontinue the use of GLP-1s before seeing clinically meaningful health benefits.
In addition, nearly one-third of patients (30%) stop using weight loss drugs within the first month of treatment. Younger patients (ages 18 to 34) are more likely to drop out of treatment sooner. These findings are concerning since patients on GLP-1 drugs should complete at least 12 weeks of continuous treatment to achieve clinically meaningful weight loss that will positively impact their health.
All of these issues have left many companies wondering how to balance member coverage of GLP-1s with the high costs of these drugs.
GLP-1 Cost Drivers are Unique for Every Company—So are the Approaches to Cost Management
Given the diversity of member profiles across companies, the factors driving GLP-1 costs look very different across organizations. As a result, a one-size-fits-all plan for managing GLP-1 costs is unlikely to be successful.
Developing a clear picture of your company’s GLP-1 usage profile is only possible by examining its medical and pharmacy claims. With this information, you can develop sensible strategies for members. For example:
- Analyze which members are using GLP-1 drugs, but don’t have a diabetes or obesity diagnosis. This can shed light on areas of misalignment. Potential strategies for addressing this issue include implementing prior authorization for prescriptions.
- Determine whether high numbers of members are dropping out of GLP–1 treatments before seeing therapeutic benefits. If so, this information can help inform benefit programs, such as step therapy which requires members to try lower cost weight loss drugs before turning to GLP-1s.
- Identify members who are making meaningful progress with GLP-1s. This data is helpful because it can help organizations develop initiatives to transition members over time to a GLP-1-free life that focuses on healthy lifestyle choices to maintain weight.
Developing GLP-1 Cost Management Strategies
Based on the insights derived from your company’s GLP-1 usage profile, the next step is to develop cost management strategies. For instance, it may make sense to bundle nutrition counseling and weight loss programs with GLP-1 therapies.
Another helpful strategy may be addressing social determinants of health that could make it more difficult for members to embrace healthier lifestyles. For example, members who live in food deserts may have limited access to affordable and nutritional foods. Others may live in areas where it is unsafe to exercise outside. Addressing these underlying issues can smooth the path to healthier living and reduce the need for long-term usage of GLP-1 drugs.
A Data-Driven Approach to Managing GLP-1 Cost
Creating an effective strategy for managing GLP-1 costs requires a data-driven approach, based on your company’s unique member characteristics and benefits-usage patterns. Both descriptive and prescriptive analytics derived from your medical and pharmacy claims data are the key to success.
Claritev’s BenInsights™ enables organizations to visualize and understand their data. BenInsights’ Smart Cards—including one focused on GLP-1 usage—pinpoint issues and provide actionable recommendations, enabling your team to take proactive steps to improve member outcomes and reduce costs. To learn more, contact us.
