What Employers Need to Know About Weight Loss Drugs
August 1, 2023
Understand how new weight loss drugs can impact the overall wellbeing of your organization and employees.
Understand how new weight loss drugs can impact the overall wellbeing of your organization and employees.
The popularity of weight loss drugs is reaching a fever pitch in the United States. Employees are increasingly asking employers about coverage for popular drugs such as Ozempic and Mounjaro (intended to treat type 2 diabetes) or Wegovy (the new weight loss specific counter part of Ozempic).
This presents employers with a difficult decision: Should they cover the cost of these expensive drugs or face potential negative outcomes such as high employee turnover and health issues linked to weight.
The recent string of popular weight loss drugs are types of glucagon-like peptide 1 (GLP-1) receptor agonists—medications originally prescribed to treat diabetes but have been shown to be effective in helping with weight loss.
These drugs could potentially help treat and address several weight-related conditions including heart conditions, diabetes and musculoskeletal issues.
GLP-1 drugs work by lowering blood sugar levels. While they have not been extensively tested on individuals with obesity, they have the side effect of sending fullness signals to the brain, which produces an anti-appetite effect leading to weight loss. However, individuals may need to take these drugs indefinitely to maintain weight loss benefits.
Ozempic and Mounjaro are currently only approved to treat diabetes. Still, Ozempic, while not FDA approved, has been prescribed by some health care providers to help those who have difficulty losing weight through conventional methods (e.g., dieting). Wegovy is currently one of the only approved drugs by the FDA to treat chronic weight management along with diabetes. Pharmaceutical company Eli Lilly is on track to seek FDA approval for the use of Mounjaro to treat obesity.
GLP-1 treatment can cost more than $1,000 per person every month. Unfortunately, most private health insurance plans do not cover these obesity drugs. Should they become more widely covered, there are nearly 130 million adults who could benefit. Currently, only 10 state Medicaid programs offer coverage for obesity drugs, but eight other states are considering making changes to cover them. It’s important to note that Medicare does not cover weight loss drugs.
In response to rising demand and concerns of obesity in the U.S., employers are now considering providing comprehensive obesity care benefits, including weight loss drugs. A recent survey from Ro and the Obesity Action Coalition found that 51% of workers with obesity would stay at a job they didn’t like if they received obesity treatment coverage, and 44% would change jobs to obtain coverage for obesity treatment.
Employers should consider the following when deciding whether to cover weight loss drugs:
Prescription drugs often account for a significant portion of an organization’s healthcare budget. Due to the high cost of drugs, like Ozempic for managing weight loss, if multiple employees were to require these drugs it would significantly raise the cost for employers. This cost may be too challenging to bear for some employers.
GLP-1 drugs were not intended for weight loss treatment. When used for this purpose, their long-term effectiveness may be limited if only used for a short period of time.
As a result, employers who provide coverage for these treatments may need to commit to sustained usage to reap weight loss benefits. This commitment is likely to lead to significantly higher healthcare costs. Employers should also consider the potential side effects of these drugs and that they are relatively new in the market.
Most insurers will not cover GLP-1 drugs because they aren’t FDA approved for weight loss. If they are not covered by health insurance, employees must pay out of pocket for them. Health care professionals generally will not prescribe these drugs unless the individual is obese and struggling to lose weight through other methods. In some cases, they may be prescribed to individuals with weight-related health conditions, such as high blood pressure. Even if coverage is obtained, it might not be permanent, which could diminish any weight-related benefits in the future.
In response to the high demand from employees for coverage, some employers are creating mandatory lifestyle modification programs for employees, while others are offering programs as voluntary options.
According to a recent survey by Pharmaceutical Strategies Group, 22% of employers who cover FDA-approved weight loss drugs require employees to participate in a lifestyle modification program to be eligible for the drugs. For 20% of employers, participation in such programs is voluntary. Additionally, some employers are placing limits on coverage of weight loss medications in terms of either dollars or duration of treatment.
Employers are exploring alternative ways to provide weight loss benefits to employees, including covering psychology-based weight loss programs like Noom to support employees through their journey. These programs may also include the prescription of obesity drugs, such as Wegovy, at a cost of around $120 per month along with additional medications that can help with weight loss.
Discovering whether GLP-1 drugs truly aid weight loss is still relatively new and raises uncertainty in effectiveness. As a result, some employers are taking a cautious stance before providing coverage. Others have chosen to allow more affordable weight loss medications before considering GLP-1 drugs. There are also other alternatives such as weight loss programs. These programs can change behaviors to develop lasting healthy habits and provide personalized weight loss coaching.
Employers often view weight loss as a lifestyle concern rather than a health concern, leading them to question the necessity of weight loss drugs. Yet, as employee perspectives change, obesity will need to be addressed by employers more directly.
While the effectiveness of GLP-1 drugs for treating obesity is still uncertain, employers should closely follow any advancements and explore holistic methods to enhance employee well-being.
If you’d like to continue the conversation, reach out to an experienced employee benefits advisor at The Miller Group.
Learn about the recent developments in weight loss drugs, their impact on group medical plans and alternative options in our webinar recap over The Ozempic Effect.
