Despite positive outcomes, coverage of GLP-1 drugs presents complicated questions

The drugs known as GLP-1 receptor agonists bring the potential for improved health to millions but also a bevy of questions and challenges concerning cost and coverage, according to insights in a recent webinar.

GLP-1s such as Ozempic and Wegovy initially came to market as a way to control blood sugar for people with type 2 diabetes but in recent years have shown notable efficacy as a weight-loss treatment. But the list price can exceed $1,000 per month and can skew employers’ healthcare benefits structures due to demand for the drugs.

Cost-control mechanisms such as formulary limitations and prior authorization bring additional complications, per insights from the September webinar hosted by HLTH.

“There are a few levers that folks have turned to,” said Byron Crowe, MD, chief medical officer with Solera Health, a technology platform that addresses chronic conditions via lifestyle and behavioral interventions. “Maybe the most blunt instrument is [offering] no coverage at all, saying, ‘Hey, these medicines are really expensive. We’re choosing not to cover them at this time.’”

But in that scenario, he said, “You’re losing out on all the amazing efficacy of this medicine for your population.”

Among the mounds of recently published research examining GLP-1 outcomes, a 2024 study in BMJ found the drugs to be effective at treating type 2 diabetes and improving weight management for patients with the condition. The study flagged a potential link to gastrointestinal adverse events, especially when administered at high doses.

Even amid promising research results, employers have been skeptical about the drugs “by default because these drugs work fantastic clinically, but previously not all the obesity drugs were as effective,” said Alissa Johnson, PharmD, MBA, clinical strategy director with SmithRx, which touts itself as offering a more transparent version of the traditional pharmacy benefit manager (PBM) model.

Drawbacks of coverage restrictions

In May, a survey by the International Foundation of Employee Benefit Plans found that 57% of employers covered GLP-1 drugs only for diabetes, while 34% also covered them for weight loss (up from 49% and 26%, respectively, in 2023). Among those offering coverage for diabetes, 19% were considering making coverage available for weight loss.

An August survey by the Business Group on Health indicated coverage is more prevalent among the group’s membership of large employers, with 96% of respondents covering the drugs for diabetes and 67% for obesity. As well, 96% said they were concerned about long-term cost complications stemming from the coverage.

HR departments eventually may face more pressure to cover the drugs compared with most treatments, webinar panelists noted, because GLP-1s have become entrenched in mainstream conversations and social-media posts about health and wellness.

“There aren’t too many other medications or conditions where people are so personally aware of a certain drug in their day-to-day [lives],” said Avantika Waring, MD, an endocrinologist and chief medical officer with 9amHealth, which provides holistic cardiometabolic care.

If and when they opt to cover GLP-1s, employers and insurers may choose to incorporate prior authorization, Crowe said.

However, he said, “For a lot of people, for folks who you really want to be taking these medicines, prior authorization can be a hurdle that they can’t overcome.”

Another conceivable approach is setting lifetime coverage limits, Crowe said, but that might not be optimal, either, because long-term use of the drugs may be required for many patients.

Some PBMs may deploy formulary management tactics as a measure of control over what drugs get covered, but the high levels of cost sharing that often result may dissuade utilization by people who would benefit.

Approaches that can work

Webinar panelists described a few tactics worth considering for employer coverage of GLP-1s. Among them:

• Gold card programs to bypass prior authorization for preferred providers
• Step therapy that entails rigorous consideration of clinical evidence and transparent patient communications
• Customized clinical programs that offer an alternative or a complement to drug-based treatment by combining lifestyle changes with services such as food delivery and mental-health support

“What I always tell people is, ‘If you are going to invest in a potentially lifelong commitment to take a weekly [GLP-1] injection, I really want it to work very well for you,’” Waring said. “‘And the best way for us to get there is to make sure that we’ve got that foundation of eating and exercise behaviors in place first.’” (Pill versions of the drugs are in development.)

Said Crowe, “We just want to be able to enable that whole host of choices so that we don’t artificially create a binary decision between nothing or a high-cost, potentially lifelong medicine.”

In a population health program, opportunities arise to find medication savings that may help employers feel more comfortable about spending increases from opening up access to GLP-1s.

“Even with things like insulins, we can transition people to a formulary alternative or a generic, and immediately you get savings right there,” Waring said. “And that’s a good feeling for a client to say, ‘I know we’re going to spend on GLP-1s, but look, we already just saved some before [we] even started with that.’ And then just thinking about the savings you’ll get when you make people healthier.”

For example, she said, data show that a one-point improvement in A1C translates to a 2% reduction in healthcare costs and a 13% reduction in diabetes-related costs for a patient.