Many U.S. corporations are grappling with health insurance coverage issues for employees when it comes to GLP-1 drugs for weight loss.
Despite the hefty price tag — typically between $1,000 to $1,500 a month — consumers are clamoring for drugs like Novo Nordisk‘s Wegovy and Eli Lilly‘s Zepbound. This class of drugs, historically used to treat diabetes, has gained broader appeal, and while some employers are providing coverage, often with limitations, others are struggling to determine how to cover them without breaking the bank.
An October survey of 205 corporations by the International Foundation of Worker Profit Plans found 76% of respondents provided GLP-1 drug coverage for diabetes, versus only 27% that provided coverage for weight loss. But 13% of plan sponsors indicated they were considering coverage for weight loss.
“At once, there’s still numerous questions amongst employers,” said Julie Stich, vice chairman of content on the International Foundation of Worker Profit Plans. As well as to high costs, corporations haven’t got long-term data on effectiveness and potential negative effects to support coverage, and some are only biding their time until more of this information exists.
Still, many advantages experts say it is a matter of when, not if, more employers will cover GLP-1 drugs.
Definitely, prescription volumes of GLP-1 weight loss drugs are soaring. Novo Nordisk recently became Europe’s largest publicly traded company due to investor enthusiasm about the obesity market, and it just made a serious acquisition in a bid to increase manufacturing capability of GLP-1 treatments due to demand, buying drug manufacturer Catalent for $16.5 billion to increase the availability of Wegovy and diabetes shot Ozempic.
Meanwhile, Eli Lilly’s recent results were buoyed by the launch of Zepbound, which won approval from U.S. regulators in early November and raked in $175.8 million in sales for the fourth quarter. Wall Street’s most optimistic assessment sees a drug that may post greater than a billion dollars in sales in its first yr in the marketplace and eventually develop into the biggest drug of all time.
Here’s what employers and employees need to know about the changing landscape for weight-loss drugs and health insurance coverage.
Annual cost is the elephant in room at $18,000 per worker
No less than 70% of the highest 18 industrial health plans Tufts Medical Center tracks in its specialty drug database cover GLP-1 drugs for obesity, with various limitations. But the most important corporations within the U.S. are generally self-insured, so that they’re those calling the shots when it comes to coverage — and for them, cost is a serious issue.
States can resolve whether to cover weight-loss drugs under Medicaid, which implies coverage can vary, according to a report from KFF. The state of North Carolina recently made the choice to stop coverage of obesity drugs for state employees.
Medicare doesn’t cover weight-loss medications, except for patients with Type 2 diabetes. Notably, 76% of older adults think Medicare should cover prescription medication for weight management, according to recent findings from the National Poll on Healthy Aging.
At $1,500 a month, employers might be paying $18,000 a yr for only one worker’s supply of weight-loss drugs, said Greg Stancil, a senior account executive at Scott Profit Services. In case you’ve got, say, 56 employees on the drug, that is over $1 million a yr. That is a price that “just didn’t exist in 2022, now they’ve this potential long-term expense they’re trying to work out what to do with,” Stancil said.
“The balancing act is maintaining a strong advantages package so that they can recruit and retain employees, but in addition managing the fee of that package to keep costs down for employees and the employer,” Stancil said. “Every employer would love to cover all the pieces to make everybody joyful, but any individual’s got to pay for it.”
Employers already covering weight-loss drugs say it’s value it
Ninety-nine percent of corporations already covering GLP-1s say they plan to proceed covering them, according to a survey by Accolade, a personalised health-care company. Amongst other things, these employers cite higher worker satisfaction and wellbeing, increased engagement in other wellbeing programs and improvement in other health conditions as reasons for covering.
“HR profit leaders recognize that is something employees want because numerous people do want to lose weight,” said James Wantuck, associate chief medical officer at Accolade.
BMI, obesity and questions in plan design
There are obvious advantages to losing weight and associated health advantages, but there are other health-care and cost concerns employers have to consider.
What might the utilization be throughout the company? Who needs to be covered? Should there be limitations comparable to someone who has an obesity diagnosis, or BMI over a certain limit?
A majority of corporations (79%) that cover these drugs do require insured members to hop over some hurdles before coverage is approved, according to the survey by the International Foundation of Worker Advantages Plans. This includes requiring prior authorization; using step therapy (32%), which requires the usage of other lower cost medications first; and specific eligibility requirements (16%). The survey also found that corporations allowed to select multiple cost-controls, if applicable, also use annual and lifetime maximums. Fourteen percent of respondents who cover these drugs said they’d no cost-control mechanisms in place.
Potential long-term costs to employers is a difficulty, and an especially hard calculation since nobody really knows how long people will need to stay on the drugs for long-term effectiveness, while going off the drugs is related to gaining weight back.
Employers are “really struggling to determine the fee versus profit,” Stich said.
Although GLP-1 drugs are high-priced, they currently represent only 6.9% of annual claims, according to data from the International Foundation of Worker Profit Plans.
How consumers can try to save within the meantime
Consumers whose corporations don’t cover the drugs are in a troublesome position. Many shall be forced to pay out of pocket, or lose out, said Brian O’Connell, an analyst who covers the insurance marketplace for InsuranceQuotes.com. “It really depends upon your checking account. In case you’re making $45,000 a yr, have a mortgage and a baby in college, there are limited options,” O’Connell said.
First, employees should discover from their employer what the advantages actually are, Wantuck said. In some cases, these drugs could also be covered, but restrictions or requirements may apply, comparable to a BMI threshold to qualify, or the worker could have to take part in an exercise or dietary program.
Consumers with industrial insurance may give you the chance to get assistance through the manufacturer in the event that they are eligible for savings programs. The web sites for Wegovy and Zepbound do lay out terms for discount manufacturer programs which will apply. For instance, with Wegovy you will need to have a prescription and cannot be enrolled in a plan where the drug is roofed. Consumers should read the restrictions rigorously.
Novo Nordisk says roughly 50 million adult Americans have coverage for anti-obesity medicines — 40 million through industrial insurance and 10 million through Medicaid — and roughly 80% of U.S. Wegovy patients with industrial coverage pay $25/month or less. For commercially insured patients who shouldn’t have insurance coverage, or pay money for their prescriptions (but are usually not government beneficiaries), Novo Nordisk and Eli Lilly cite potentially significant savings off the total retail price: as much as $500, according to Novo Nordisk, and up to 50%, according to Eli Lilly, though monthly and annual caps on discounts apply.
“For consumers, it never hurts to look for manufacturer coupons or discounts and apply for them,” wrote Krutika Amin, associate director at health care policy, research and news organization KFF, in an email. “The reply could also be no in certain cases but in other situations patients could stand to save several hundred dollars.”
Amin added that as more manufacturers enter the GLP-1 market, manufacturers could also be offering competing discounts to try to get patients to pick their drug. “The market continues to be recent but as demand stabilizes and there may be more competition within the GLP-1 market, manufacturers may change prices to stay competitive. So even when the reply was no last time, it could be value keeping an eye fixed out,” she wrote.
Looking overseas, which some U.S. consumers do when it comes to high-priced drugs, is less likely to help out on this case, no less than right away. While recent KFF research indicates that even with coupons and discounts, prices within the U.S. are higher than in other large, wealthy countries, Amin said that as countries have faced shortages for people using these drugs for diabetes it will not be possible to get these drugs abroad.
Meanwhile, advantages consultants expect the coverage problem will eventually resolve itself, given the necessity and long-term advantages these drugs may give you the chance to provide.
“It is a matter of time before most corporations shall be covering these drugs in some fashion,” Wantuck said. “There’s numerous evidence that they assist people lose weight and prevent really serious illnesses like stroke and heart attack. It’s going to be harder and harder not to cover these drugs because the advantages seem to be so great.”