A new survey reveals that the costs of covering increasingly popular obesity drugs like Ozempic and Wegovy are quickly mounting for employers. But with demand from employees high and potential health benefits significant, more companies are considering taking on the pricey medications.
Costs Add Up
According to a survey of 200 employers from the International Foundation of Employee Benefit Plans (IFEBP), the average representation of glucagon-like peptide-1 (GLP-1) drugs prescribed for weight loss amounted to 6.9% of respondents’ total annual prescription claims costs in 2023.
With the average cost of these obesity medications exceeding $1,000 per month per patient, it’s no wonder employers are concerned about the financial impact. Providing coverage for more employees could quickly inflate costs.
Currently, just 22 percent of employers surveyed said they cover GLP-1 drugs for weight loss purposes, while 76 percent cover them for diabetes — the original intended use.
Of those covering the medications for weight loss, 79 percent said they rely on prior authorization to control costs. Step therapy was less common at 32 percent, and 14 percent have no cost control mechanism in place.
Weighing Pros and Cons
With employee interest and demand rising, nearly half of employers (43 percent) now say they plan to add coverage for obesity medications like Ozempic and Wegovy in 2024. That’s almost double the number covering them today.
Experts say the increase is likely driven by enthusiasm from employees who see the potential benefits, as well as interest from employers themselves who see weight loss as a way to reduce the risk of costly comorbidities such as heart disease and diabetes. Providing access could also be a recruitment and retention strategy.
However, many companies remain cautious due to the high monthly costs per patient. Other factors, like potential long-term side effects and unknowns about the drugs’ lasting effectiveness, also contribute to hesitance from employers.
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Copyright © 2024 Smarts Publishing. This is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.