The increasing prevalence of obesity and its associated health risks have led to a growing demand for effective weight loss solutions, particularly glucagon-like peptide-1 (GLP-1) agonists. These medications, initially developed for type 2 diabetes, have demonstrated significant weight loss benefits, prompting their approval for chronic weight management. However, the high cost of these drugs has sparked debate about insurance coverage, leaving employers and employees navigating a complex landscape. This article delves into the factors influencing employer decisions regarding coverage of weight loss medications like Wegovy, Zepbound, and Saxenda, exploring the challenges, strategies, and future trends in this evolving area.
The Rise of GLP-1 Agonists for Weight Loss
A new class of drugs known as glucagon-like peptide agonists, or GLP-1s, have been found to help people lose excess weight. While these medications were initially approved only for treating Type 2 Diabetes, researchers noticed GLP-1 patients were losing weight. This prompted the manufacturers to file the drugs with the FDA for a new weight loss indication. As part of the approval process, manufacturers re-branded the drugs; Ozempic® was renamed Wegovy® for its weight loss indication. These medications usually contain either semaglutide or tirzepatide, which are GLP-1 receptor agonists. They work by reducing blood sugar, reducing appetite, and signaling fullness.
The effects of these medications - reducing appetite by decreasing hunger signals, slowing digestion, and helping people feel fuller for longer - also makes them effective in reducing weight. There has been a marked increase in the use of these medications since they were first approved for weight loss in 2014, particularly following the approval of Wegovy in 2021 and Zepbound in 2022.
The Cost Factor: A Major Hurdle
While these drugs offer hope to people suffering from chronic obesity and its related conditions, they are expensive. Wegovy retails for ~$1,350 per month. According to the KFF and the Institute for Clinical and Economic Review (ICER), some injectable drugs intended for weight management can cost $1,300 or more for a month’s supply. The high cost of GLP-1 agonists is a significant concern for employers. Many employers reported that use was higher than expected and covering them significantly increased prescription drug cost. As a result, employers are requiring pre-authorization and trying to ensure that workers are first prescribed other effective and less expensive treatments.
Insurance Coverage: A Complex Decision
Does insurance cover these medications for weight management? That depends. It is up to each insurer and its chief medical officer to decide if these medications will be covered. Some employers choose to exclude GLP-1 drugs from employer-sponsored health plans. Some insurance plans require prior authorization before approval. According to the FDA, these prescriptions are meant to be used along with a reduced-calorie diet and exercise to manage weight and reduce the risks of obesity-related conditions. However, your health insurer may not cover these drugs unless you have an obesity-related medical problem, such as high cholesterol or high blood pressure. A high BMI that indicates you are obese or overweight may not be sufficient.
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One-in-five (19%) firms with 200 or more workers, including 43% of firms with 5,000 or more workers, cover GLP-1 drugs for weight loss in their largest health plan in 2025. The meaningful shares of larger employers covering these medications for weight loss, notwithstanding their relatively high cost, underscores the importance many employers place on covering these medications for employees.
Strategies for Managing Costs and Ensuring Appropriate Use
Faced with rising costs, employers are exploring various strategies to manage the financial impact of covering weight loss medications while ensuring appropriate utilization. These strategies include:
- Prior Authorization (PA) Programs: Implement a prior authorization (PA) program so they are prescribed only for patients who are candidates for treatment. Minimum BMI guidelines should be applied to help ensure the drugs are being used for chronic obesity only as opposed to a quick diet aid.
- Case Management and Lifestyle Programs: About a third (34%) of firms covering GLP-1 agonists for weight loss require enrollees to meet with a dietitian, case manager, therapist, or participate in a lifestyle program in order to have the medications covered, up from 10% of firms last year.
- Excluding Weight Loss Medications: Some employers exclude weight loss, the entire anti-obesity category.
The Impact of Obesity on Healthcare Costs
More than 4-in-10 Americans have obesity. The CDC estimates that the extra medical expenses associated with obesity exceed $173 Billion. Obesity is one of the most serious health issues facing the nation and is associated with many health conditions, ranging from cardiovascular diseases to cancers, so effective medications to help people control their weight could have substantial health benefits.
The Future of Weight Loss Medication Coverage
Looking ahead, employers may continue to face the competing pressures of employee demand for GLP-1 drugs and concerns about costs. Several firms that initially covered GLP-1 drugs for weight loss have since restricted coverage to only cover GLP-1 agonists for employees with specific medical indications, like diabetes. It is likely that employers will continue to refine their strategies for managing the cost and utilization of these medications. As the demand for medical weight loss solutions grows, more employers are recognizing the importance of covering prescription treatments like Zepbound® and Wegovy®.
Appealing a Health Insurer’s Denial
If your doctor prescribed medication but your insurer denied coverage, you have the right to appeal your health plan’s denial of benefits for covered services that you and your health care provider (doctor, hospital, etc.) believe are medically necessary. There are two kinds of appeals - internal appeal and external review. You can learn how to file the appeals here.
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