Employer Coverage of GLP-1 Drugs Jumps

As the popularity of GLP-1 drugs like Ozempic and Wegovy grows, so does the percentage of employers covering the drugs for employees.

A new employer survey out June 13 from the International Foundation of Employee Benefit Plans (IFEBP) found that employer coverage of the drugs is up 8 percentage points since last fall, with roughly one-third of companies now offering GLP-1 drug coverage for both diabetes management and weight loss.

More than half of employers (57%) currently provide coverage for diabetes only—the original intended use for the drugs—up from 49% in 2023. Perhaps even more significant, 34% provide coverage for both diabetes and weight loss (up from 26% in 2023), according to the benefits organization’s May survey of 279 employers. IFEBP, which counts some 31,000 organizations as members, last surveyed employers abut GLP-1 drugs in October 2023.

It’s a big jump that shows employers are getting serious about coverage of the drugs, especially as employees express interest, said Julie Stich, vice president of content at IFEBP.

“With the release of new FDA [Food and Drug Administration] approvals and clinical studies and increasing demand and awareness, employers are seriously considering how to proceed,” she said. “The data indicates that employers and plans are adjusting their drug coverage policies in response.”

On average, 8.9% of organizations’ total annual claims are for GLP-1 drugs used for weight loss, an increase over the 2023 average of 6.9%, according to IFEBP.

Employers covering GLP-1 drugs rely heavily on utilization management (used by 85% of those surveyed) to control costs. These techniques include prior authorization and body mass index (BMI) and/or comorbidity requirements. Less common cost-management approaches include step therapy (18%) and eligibility requirements (16%), the IFEBP found. About 9% of employers have no cost-control mechanism in place.

Employer Considerations

The survey also found that not only are more employers covering GLP-1 drugs, but even more are thinking about adding coverage of them for weight loss purposes. Of the organizations that currently offer GLP-1 coverage just for diabetes, 19% are considering offering the drugs for weight loss, too.

Employee demand for the drugs as a weight loss aid, along with the potential health benefits, is likely behind the push. A recent KFF survey found that 1 in 8, or about 13%, of U.S. adults have used a GLP-1 agonist. A survey out last fall from health care firm Accolade found that three-fourths of HR decision-makers said GLP-1 medications are beneficial for controlling blood sugar, boosting weight loss, improving blood pressure, and lowering the risk of heart disease.

But with a high price—the drugs typically cost between $1,000 and $1,500 a month—employers are still debating considerations about coverage.

IFEBP said the top factors that employers are taking into account for GLP-1 drug coverage for obesity care are obesity as a risk factor for chronic conditions and associated costs (76%); broker/consultant/pharmacy benefit manager recommendations (71%); and impact/effectiveness of cost-control mechanisms (62%). GLP-1 label expansion (57%), long-term costs (56%), and lack of clinical studies for long-term use of GLP-1 drugs (39%) are other top factors.