As we approach annual review season, self-funded employers are increasingly scrutinizing the impact of GLP-1 medications on their pharmacy spend. These drugs, commonly prescribed for type 2 diabetes and weight management, have made headlines for their clinical benefits — but also for their costs. Let’s break down what employers need to know about these medications.
GLP-1s for Type 2 Diabetes
Medications like Ozempic, Trulicity and Mounjaro have revolutionized diabetes management. These drugs help lower blood sugar levels, promote weight loss and reduce cardiovascular risks in individuals with type 2 diabetes.
For many employers, these drugs are considered cost effective due to the improved long-term health outcomes they produce. By preventing complications like heart attacks, strokes and kidney disease, GLP-1s can save the plan significant downstream costs while improving employee wellbeing.
GLP-1s for Weight Management
Drugs such as Wegovy and Zepbound — also GLP-1s — are FDA-approved for weight loss and have generated significant interest among employees and plan sponsors. These medications show promising results for individuals struggling with obesity by helping them achieve meaningful weight loss, when paired with lifestyle changes.
However, the story is more complex here.
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Cost Impact: Weight loss GLP-1s can cost upwards of $15,000 per member annually, creating a significant financial burden for plans.
- Long-term Data: While the short-term results are impressive, data on sustained weight loss after discontinuation of medication is still limited.
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Demand Surge: Coverage can lead to an influx of requests, which may require additional utilization management strategies.
What Does This Mean for Your Plan?
Employers face a tough balancing act. While supporting members with chronic conditions like diabetes can lead to measurable health and cost benefits, covering weight loss drugs may actually be less valuable depending on your specific plan goals and member demographics.
As you navigate your annual reviews, it’s important to ask:
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What is the clinical value of these drugs for my population?
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Are there strategies to manage costs while supporting member health?
Connect with CBIZ for Tailored Guidance Regarding GLP-1 Medications
Want to dive deeper into how GLP-1 medications fit into your pharmacy strategy or discuss options for managing coverage decisions? We’re here to help. Connect with our team of pharmacy consultants today to get started.
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