Ozempic drives up health-care costs, whether you can get it or not

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Ozempic drives up health-care costs, whether you can get it or not

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About 165 million Americans rely on employer-sponsored health insurance and yet, workers may still not get the coverage they want — particularly when it comes to drugs like Wegovy and Novo Nordisk’s diabetes ***** Ozempic.

One in three employees are looking for more resources to combat obesity, according to a recent report by consulting firm

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. Glucagon-like peptide-1 treatments such as Wegovy and Ozempic, which mimic hormones produced in the gut to suppress a person’s appetite, are considered

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on this front.

These blockbuster weight-loss drugs have skyrocketed in popularity in the U.S. but are still not universally covered — even though “Americans have higher rates of obesity and diabetes and more behavioral health conditions today than ever before,” according to Trilliant Health’s “2024 Trends Shaping the Health Economy” 

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.

Cost is a key issue.

Although research shows that obesity drugs may have significant health benefits beyond shedding unwanted pounds, organizations representing U.S. insurers have said concerns remain about the 

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 involved with covering those medications, which are nearly $1,350 per month for a single patient. 

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The price tag for GLP-1 medications, along with the large number of workers who could potentially benefit from using them, are a big driver of higher health-care costs, several studies show. Already, prescription ***** costs jumped 8.6% last year, due in part to a surge in the use of GLP-1 drugs, according to a recent report by

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“Is that significant? Yes,” said Sunit Patel, Mercer’s U.S. chief health actuary.

Patients on these medications need to complete months, if not years, of continuous treatment.

“It becomes a lifelong *****,” said Gary Kushner, chair and president of Kushner & Company, a benefits design and management company. “That’s a pretty expensive commitment.”

Cost is a key factor in coverage

Currently, fewer than half — 42% — of companies cover the 

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.

Still, “not everyone who wants it can get it,” Patel said.

On the flipside, 3% of employers have recently removed coverage for these drugs and 10% of companies that currently cover them are considering removing them for 2025.  

To improve access to weight-loss drugs, many businesses would have to pay even more — and health-care costs are already reaching a

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, with employers and employees set to shell out significantly more for coverage in 2025, according to WTW, a consulting firm formerly known as Willis Towers Watson. U.S. employers project their healthcare costs will increase by 7.7% in 2025, compared to 6.9% in 2024 and 6.5% in 2023.

Among employers’ greatest concerns was how to cover increasingly sought-after weight loss drugs, a Kaiser Family Foundation survey

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“Employers face the challenge of integrating these potentially important treatments into their already costly benefit plans,” Gary Claxton, KFF’s vice president said in a press statement.

Syringes from weight loss drugs “Wegovy,” “Ozempic” and “Mounjaro.”

Picture Alliance | Getty Images

Access for weight-loss use is an issue

For now, some employers cover only GLP-1 drugs exclusively for the treatment of diabetes, while others cover certain GLP-1s for weight loss but only if they are approved by the Food and ***** Administration for that use — ruling out Ozempic, which is just

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“Most employers cover Ozempic for diabetes, they don’t necessarily cover it as an anti-obesity medication,” said Seth Friedman, pharmacy and health plans practice leader at Gallagher.

That makes it even trickier for employees to navigate whether they can get access to the ***** and if it will be covered by their insurance. “They see that it’s covered but they get rejected,” Friedman said.

A 2023 survey by the International Foundation of Employee Benefit Plans found that 76% of the companies polled provided GLP-1 ***** coverage for diabetes, versus only 27% that provided coverage for weight loss — leaving many workers shut out.

“Obviously, there is demand for them, and it’s not for diabetes, it’s for weight loss,” said Kushner.

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“Looking ahead to 2025, about half of large employers will cover the drugs for weight loss,” said Beth Umland, Mercer’s research director of health and benefits. However, “even when they do, there are guardrails around who can use it.”

Demand for these treatments is

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— but the added controls for coverage are also helping to keep costs in check.

Nearly all employers have some sort of “utilization management”

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in place, like a prior authorization requirement, according to Gallagher’s Friedman.

For some companies, that may mean workers must try other weight-loss methods first or meet with a dietician and enroll in a weight-loss management program. Others may require a threshold for body mass index, or BMI, of at least 30, depending on how the plan is set up, Friedman said.

This information is available during open enrollment, which typically runs through early December. 

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