Managing GLP-1 Medications and Related Costs

Employers everywhere are grappling with the affordability of GLP-1s requiring them to evaluate their coverage and program strategies to better promote the safe, appropriate and cost-effective use of these medications.

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October 31, 2024

For nearly 2 years, GLP-1 agonists (GLP-1s) have been a major subject of conversation among employers and their health industry partners due to their efficacy in treating type 2 diabetes and obesity, surging demand and utilization and their high cost. As the popularity of these medications continues to grow and the set of indications expands – notably, without a decrease in price – GLP-1s are still dominating discussions between business leaders and vendor partners about the affordability of prescription drugs and their role in rising health care costs.

Globally, the obesity medication class is expected to grow 212% (24-27% compound annual growth rate) from 2024 to 2028, potentially propelling obesity to one of the top 5 most costly conditions from a drug use perspective, according to an analysis published by IQVIA Institute.1 And indeed, 70% of employers say they are very concerned about the appropriate use and/or long-term cost implications of GLP-1s and other newer weight management medications.2

As employers everywhere grapple with the affordability of GLP-1s, many are evaluating their coverage and program strategies to better promote the safe, appropriate and cost-effective use of these medications. This resource provides need-to-know information, along with specific considerations to assist employers as they evaluate their next steps.

  • 1 | Explore the cost impact of GLP-1s and available paths to address short- and long-term cost challenges: GLP-1s have created significant cost management challenges for employers. According to Business Group on Health’s 2025 Employer Health Care Strategy Survey, 56% of respondents indicated that GLP-1s are driving health care costs to a great or very great extent.2 Unfortunately, without intervention, this cost pressure will persist in the near term especially as the set of indications, patient eligibility and demand for GLP-1s continues to grow. An analysis of the Medicare Part D eligible population in the U.S. offers a glimpse at the possible incremental cost impact of covering GLP-1s for obesity. The study, published in Health Affairs, found that if only 10% of newly eligible Medicare beneficiaries with obesity or overweight (or approximately 1 million patients) received a prescription for a GLP-1, the projected spending would increase by $6.1 billion, or by approximately 4.3% in 2025.3 Such an increase, in an already high-cost environment attributable to one therapy, raises significant concerns and considerations about the potential tradeoffs necessary to meet the needs of patients with obesity who finally have access to treatments that offer meaningful health benefits. For employers, this challenge is currently playing out as they struggle to sustain the cost of GLP-1s at the current price and the scale required, despite the promise of longer-term health improvement.
  • Considerations related to addressing the cost impact of GLP-1s:

    • Include multiple anti-obesity medications on the formulary. While GLP-1s can be highly effective, other types of anti-obesity medications can also help patients achieve clinically significant weight loss [e.g., participants in a clinical trial who took phentermine-topiramate (Qysimia®) lost 10.5% of their baseline weight].4 Importantly, these other medications may be more affordable for both patients and employers alike. 
    • Define coverage criteria for GLP-1s based on the diagnosis, a necessary step due to the growing list of indications. Nearly all employers (96%) cover GLP-1s for the treatment of diabetes, 67% cover GLP-1s for the treatment of obesity and 34% cover them for the treatment of cardiovascular disease. 2 While considering coverage of GLP-1s for obesity, employers must balance the growing body of evidence about their effectiveness and the unprecedented demand. Patients’ familiarity with these drugs, due to marketing, press and social media buzz, is also a consideration, as members who do not have access to these medications through their employer may seek them through other channels. Although this may include potentially less safe, compounded versions of the drugs (see more on this below), some GLP-1 manufacturers are now offering discounted direct-to-patient arrangements for those who self-pay.5
    • Ask partners to conduct a realistic assessment of the reduction of downstream health care costs from reducing patients’ obesity-related health risks. As a part of this analysis, employers should ask partners to factor in patient persistence (i.e., continued use) of GLP-1s, as well as medication discontinuation and potential weight regain. Employers can use this information to advocate for drug prices not to exceed the estimated value of health outcomes and to consider the level of investment they are willing to make to cover GLP-1s and offer additional patient support.
    • Seek clarity and transparency of rebate and pricing arrangements for GLP-1s depending on the scope of coverage and utilization management strategies under consideration.
    • Hold health industry partners accountable for securing timely net price reduction of GLP-1s as competition in this class of drugs grows and supply begins to meet the demand.
    • Assess how potential U.S. government actions to negotiate Medicare drug prices for GLP-1s may impact the commercial population and your PBM’s negotiations with pharmaceutical manufacturers.
    • Monitor the positions of governments outside the U.S. concerning the scope and duration of GLP-1 coverage as employees may look to employers to fill potential coverage gaps.

In the U.S., as competition for formulary placement increases among GLP-1s, rebates start to play a meaningful role in shaping the price and net cost dynamics. However, at this time, some manufacturers are putting rebate restrictions in place, effectively forcing employers to either allow for unrestricted access to the drugs as indicated or to implement programs aimed at more thoughtful utilization and waste management and forego the sizable rebate. While this space is evolving quickly, limiting employers' ability to manage this utilization through such pricing practices is another example of misaligned incentives in pharmacy benefits.


  • 2 | Assess if existing utilization management tools are working as intended: Due to the high demand for GLP-1s and the broad prevalence of conditions they treat, managing utilization to achieve maximum efficiency requires collaboration among multiple partners. Utilization management should ensure that treatments equitably reach the patients who need them most and that prescribing and utilization of these drugs are subject to guardrails designed to prevent fraud and waste and maximize adherence. PBMs, typically tasked by employers with deploying prudent drug utilization management strategies, have the most direct influence on utilization management. While they have a set of proven utilization management tools at their disposal, new programs and modifications to the existing tools may be needed due to the high demand, short supply, and significant cost impact of GLP-1s. Self-insured employers need a broader range of solutions and the ability to elevate the strength of utilization management guardrails in line with their budget constraints. Employers should also be able to deploy programs and utilization management strategies without the risk of losing rebates or paying a higher net price if these drugs are prescribed to a narrower, more targeted patient population.
  • Considerations related to utilization management tools:

    • Press PBMs on the effectiveness of existing utilization management tools, including whether they are the right fit for this evolving drug class. Common tools include prior authorization, which 87% of employers will have in place in 2025, and step therapy, required by 31% of employers in 2025.2 Prior authorization should ensure that only individuals for whom the drugs are indicated gain access and reauthorization should seek to determine if patients are adhering and responding to treatment. Step therapy should enable patients to access other FDA-approved anti-obesity medications before GLP-1s.
    • Explore with your partners the options for implementing outcomes-based pricing for GLP-1s. Tying payment to health outcomes, including those reported by the patient, would enable employers to hold their partners accountable for treatment effectiveness and appropriate utilization.
    • Consider limiting the prescribing rights of GLP-1s for weight loss to a narrower network of prescribers with credentials to treat patients with obesity. Among employers, 24% will require employees to obtain GLP-1s through specific physicians or programs. 2
    • Require PBMs to effectively manage any coverage restrictions that include having patients taking GLP-1s for weight loss participate in lifestyle management programs. Require integration/data exchange with those programs.
    • Explore the ramifications of utilization management, including cost-sharing, on health equity. Even when GLP-1s are covered, there may be substantial out-of-pocket costs for employees, making them unaffordable for those who are lower-income. Determine how you will address any inequities in access to these medications.
    • Communicate transparently with plan participants about the necessity of implementing utilization management tools, including the potential benefits of any required weight management programs.  
    • Determine if and how GLP-1 medications impact bariatric surgery program criteria, including any guidelines that may be in place for their use in the preauthorization process for bariatric surgery. 
  • 3 | GLP-1s must be paired with comprehensive wraparound support: GLP-1s are categorically different from prior anti-obesity medications and may help people with obesity achieve notably greater weight loss than older drugs or lifestyle interventions alone. However, those taking GLP-1s must engage in ongoing, comprehensive clinical support to maximize success while they’re on the medication and to minimize weight regain if/when they come off.

Multidisciplinary patient support, offered through obesity treatment programs, cardiometabolic programs or within an advanced primary care setting, should focus on:

  • Helping patients manage potential side effects and promoting adherence: According to a study examining adherence and persistence to GLP-1s among commercially insured adults with obesity (and without diabetes), one-third of patients were persistent with the medication at 1 year, and 27% took their medication as intended. Study authors cited drug shortages and side effects as potential reasons for these low rates.6
  • Assessing patients for mental health conditions, followed by treatment or referral to appropriate care when necessary: Obesity is associated with mental health conditions, including depression, which research describes as “an intertwined and overlapping biochemical back-and-forth between the two conditions, with each conspiring to aggravate the other.”7 Furthermore, experiencing weight bias or stigma, and then internalizing these negative stereotypes, has been associated with a host of negative mental health outcomes, including depression and anxiety, as well as poor self-esteem and body image.8 Studies also show the co-occurrence of obesity and eating disorders, with evidence indicating that the prevalence of these comorbid conditions may be growing.9
  • Screening patients for and addressing social determinants of health that may serve as a roadblock to healthy behaviors: Neighborhoods with limited physical access to nutritious and affordable food (i.e., food deserts) or a high-density of high-calorie fast food and junk food (i.e., food swamps) influence food choices and subsequently employee health. Research shows that living in a food desert is linked to a poor diet, as well as a greater risk of obesity, and that food swamps - where unhealthy food options inundate healthy ones - have a statistically significant effect on adult obesity rates, even more so than the absence of full-service grocery stores.10-13
  • Engaging patients in strategies to make lasting dietary and physical activity changes: Although patients may experience reduced food noise (frequent thoughts/internal “chatter” about food) and decreased appetite while taking GLP-1s (thus enabling them to consume fewer calories more easily), helping patients adopt a healthy diet remains crucial.14 Because patients on GLP-1s are likely eating fewer calories, the nutrient density of food becomes more important. Additionally, engaging in physical activity, including resistance training, may be beneficial because weight loss can also lead to loss of muscle mass.15 Moreover, these healthy behaviors may be critical to minimizing weight regain and the reemergence of cardiometabolic risk factors if/when patients discontinue the use of GLP-1s.

Considerations related to implementing wraparound support and improving the longer-term value of GLP-1s:

  • Work with your consultant and/or data partner to align data sources to find out how many employees taking GLP-1s for weight loss participate in/receive support from clinicians through vendor partners, including the average length of participation and patient outcomes. As a part of this process, evaluate which programs within the solution portfolio, including advanced primary care, may already be interacting with and supporting patients with obesity.
  • Assess the adequacy of support patients taking GLP-1s receive from vendor partners, including potential care gaps. Determine the type of clinicians providing wraparound support (if any), the degree and frequency they engage with patients, the level of personalization and the topics they address.
  • Evaluate if requiring participation in a weight management program to gain access to GLP-1s is a fit for your organization. Among companies that cover GLP-1s for obesity, 52% of employers do this.2
  • Determine how employees gain access to weight management support, including if there is proactive outreach and points of integration with other benefits, programs and existing practitioners, such as primary care physicians, for cross-referrals. Cross-referrals should also include the ability to recommend a higher level of care, such as bariatric surgery, when appropriate.
  • Focus on stigma-free communications related to weight and GLP-1s. As a trusted source of information, employers should ensure that any messaging about weight or GLP-1s is free from language or imagery that may be stigmatizing. The same goes for communication from vendor partners. Examine current and future communication materials for this type of content, such as headless images of people with obesity, language or images that suggest a person’s body weight reflects their character or intelligence, use of pejorative language or inappropriate humor.  
  • Require vendors that provide weight management support, including advanced primary care, to report outcomes that include but go beyond weight loss (cardiometabolic risk factors and outcomes, quality of life, satisfaction, adverse events).  
  • 4 | Use of compounded versions of GLP-1s should be carefully evaluated with an eye toward patient safety: Surging demand for GLP-1s, coupled with their high costs and limited supply, has led to the prescribing of compounded versions of these medications by direct-to-consumer virtual health companies or physicians attempting to help patients gain access to these drugs. The FDA advises that “patients should not use a compounded drug if an approved drug is available to treat a patient,” as the agency does not review compounded medications for safety, effectiveness or quality.16 In fact, the FDA has received reports of adverse events associated with compounded versions of GLP-1s, including some that involved hospitalizations.17 Calls to national poison control centers related to compounded GLP-1s have also increased in 2024.18 These incidents have been largely due to dosing errors, which are the result of incorrect dosing conversions and measurement problems associated with the administration of GLP-1s, as compounded versions of these medications often come in multidose vials measured in units, whereas FDA-approved GLP-s are dispensed in milligrams in prefilled pens.17
  • Considerations related to restricting the use of compounded GLP-1s:  

    • Verify with your vendor partners prescribing GLP-1s that they are doing so only for FDA-approved versions of the medications.  
    • Allow for the coverage of compounded GLP-1s only in special circumstances (e.g., the inability for patients to access GLP-1s due to a shortage) and with specific prior authorization.
    • Include several types of anti-obesity medications on the formulary to provide employees with meaningful and cheaper alternatives to GLP-1s.
    • Monitor emergency room utilization for claims resulting from GLP-1 overdoses.
    • Provide employees with education about the risks of compounded GLP-1s and self-dosed injections.
  • 5 | Monitor expanding indications and a growing pipeline of anti-obesity medications: According to an analysis conducted by KFF, 42% of adults under age 65 with private insurance could be eligible for GLP-1s based on current FDA indications.19 Rising rates of chronic conditions will increase the eligible population over time, as well as potential new indications for these medications that extend beyond cardiodiabesity. For example, research is underway on the effectiveness of GLP-1s in treating sleep apnea, kidney disease and Alzheimer’s disease.20 Expanding eligibility may also increase if these medications are approved for wider age ranges; currently, three GLP-1s are approved in the U.S. and Europe to treat obesity in children 12 and older, but clinical trial data released on September 24, 2024, show their effectiveness in promoting weight loss among children ages 6-11.21

    While the eligible population for GLP-1s may grow, the good news is that the number of anti-obesity medications will likely increase in the future, providing patients with additional treatment options and potentially decreasing shortages and prices. According to another analysis by IQVIA, there are 124 anti-obesity medications in the pipeline (8 in phase 3), and of those, 50% are injectable and 46% are oral.22  Oral formulations of GLP-1s are significant because they may serve as a means for patients on injectable forms of these medications to transition to a pill version for weight maintenance, something one pharmaceutical company is expecting to test in a new clinical trial.23
  • Considerations related to monitoring expanding indications and the drug pipeline:

    • Work with partners to stay on top of changes to GLP-1 indications and approvals, with an eye to how such changes may impact variables like formulary design, plan and employee costs and patient experience and outcomes.  
    • Challenge partners to monitor the list price of GLP-1s and ensure flexibility on the formulary, allowing employers to take advantage of the lowest available price in the rapidly evolving competitive landscape in this drug class, especially as indications evolve and the patient population that may benefit from GLP-1s grows.

Final Thoughts

As obesity rates and the costs associated with this chronic condition rise across the globe and pharmaceutical treatment continues to grow in scope and popularity, the time is now for employers to develop a comprehensive weight management strategy that incorporates evidence-based and cost-effective solutions. Employers must work with their partners to define and continuously evaluate coverage of GLP-1s in the context of the changing treatment landscape, along with company culture, budget and goals. Looking beyond GLP-1s, employers should ensure that they have a spectrum of weight management benefits in place, including intensive behavioral interventions, anti-obesity medications (not specific to GLP-1s) and bariatric surgery, and that they’re providing support for patients in choosing and adhering to the solutions that are most appropriate for them. In doing so, employers will enable employees with obesity to access care that can make a difference in their health and quality of life and manage plan costs.

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