The popularity of GLP-1 drugs, such as Wegovy and Mounjaro, has surged in recent years due to their effectiveness in treating diabetes, obesity, and other conditions by aiding in weight loss. Consequently, a growing number of employers are contemplating covering these anti-obesity medications, as indicated by several surveys. However, the high cost of these drugs, coupled with rising healthcare expenses, presents a significant challenge for employers.
The Rising Popularity and Cost of GLP-1 Drugs
GLP-1 drugs have gained immense popularity for their ability to help patients shed pounds. A man, for instance, lost 40 pounds on Mounjaro. However, the cost of these medications is substantial. The list price for Wegovy, for example, is approximately $1,350 for a four-week supply. This high cost is a major factor driving up prescription drug expenses and overall healthcare prices.
Employer Coverage: A Mixed Bag
While many workers are eager for anti-obesity drug coverage, providing this benefit can be financially challenging for some companies. According to Mercer’s report, just over half of employers with at least 500 workers are providing such coverage this year. However, even those employers that offer coverage often implement safeguards, such as requiring employees to obtain prior authorization or to try other weight-loss methods first.
Eileen Pabon, who manages benefits and wellness for DSV Air & Sea US, discovered that the company’s prescription drug costs had increased by $400,000 over several months. She found that several employees without diabetes had started taking GLP-1 drugs. As a result, the company deemed it financially unwise to cover the medication for weight loss alone.
The Impact on Healthcare Costs
The cost of family health insurance benefits at work has reached nearly $25,600 this year, a 7% increase from the previous year, according to KFF’s annual survey. The average annual premium for single coverage was nearly $9,000 this year, up 6% from the prior year. These costs are expected to continue to rise in 2025, driven by increasing prescription drug expenses and healthcare prices overall, according to surveys from several consulting firms. Mercer projects that the total cost of health benefits per employee will rise by an average of 5.8% in 2025, even after employers implement cost-reduction measures.
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Strategies for Managing Costs
Employers are exploring various strategies to manage the rising costs of healthcare and prescription drugs. Eric Miller, a consulting actuary with Segal, notes that employers are looking at reining in spending on prescription medications. Due to the tight labor market, employers have been reluctant to pass costs onto their workers in recent years. However, fewer companies can continue to absorb these expenses, according to Mercer.
Some employers, like Marroquin Industries Corp in Hawthorne, California, are still hesitant to make their workers pay more for health care. While employees will see their monthly premiums rise, Marroquin will not increase their share of the premium or boost their deductibles or out-of-pocket costs, nor will it slim down benefits.
Navigating Insurance Coverage for Wegovy
Novo Nordisk, the maker of Wegovy, offers a platform where individuals can check their insurance coverage for the medication and access savings offers. The platform requires users to provide information such as their name, date of birth, gender, and zip code, as well as their healthcare professional’s details.
Based on the information submitted, the platform will indicate whether the insurance covers Wegovy. If coverage is not provided or immediate coverage details are unavailable, the platform offers options that may help. In some cases, the insurance company may require prior authorization, which involves the healthcare professional submitting a form to the insurer for approval. If coverage is denied, individuals may submit an appeal or request for coverage with the help of their healthcare professional.
For those with commercial insurance who are covered or covered with prior authorization, the Wegovy savings card can help lower out-of-pocket costs. However, government-insured patients cannot use copay cards offered by the manufacturer.
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Personal Experiences with Weight Loss Medication
Personal accounts highlight the challenges and successes of using weight loss medications. One individual shared their experience of struggling with weight management, reaching 320 pounds before successfully losing weight through diet and medication. After being introduced to Frankie, they found support when Saxenda became unavailable and later transitioned to Mounjaro. They have since lost 60 pounds overall and have been off medication since October.
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