GLP-1 weight loss pills may be bad thing for job insurance coverage

The new GLP-1 pills are likely to increase consumer demand for these popular weight-loss medications. But it could also signal bad news for employees who want their employer-sponsored health insurance plan to foot the bill.

Novo Nordisk, the maker of Wegovy, launched its GLP-1 weight-loss pill in early January, while Eli Lilly’s pill Foundayo began shipping in April. Although many industry observers hope oral equivalents will be more financially acceptable, they cost roughly the same as injectable drugs for employers who offer them through insurance. This, combined with the fact that more people will be interested in pills rather than injections, gives employers pause. A Business Group Particularly Related to Health questionnaire A survey earlier this year found that 87% of employers expect the availability of oral medications will increase demand for GLP-1s, while only 9% predict a price decrease.

in 2025 Almost half of large employers are covered by GLP-1 Medications approved for weight loss, according to Mercer. But the costs are becoming prohibitive. In NFP’s last annual employer questionnaire51% of employers cited GLP-1s as the biggest driver of rising prescription drug costs. “Employers are saying the increase in pharmacy costs is unsustainable,” said Nick Conway, president of Rx Solutions at global benefits consultant NFP.

The cost of obesity medications (list prices ranging from $1,000 to $1,350 per month before insurance) poses a major hurdle for many patients who could benefit from significant weight loss and a reduced potential for related health problems. Employers generally don’t pay list price for employee coverage, but even after various discounts, plan sponsors can pay a net price of approximately $569 to $664 per month per employee. predictions It comes with a hefty bill from the Institute for Clinical and Economic Review.

All of this helps explain why the breakthrough in weight-loss pills may not impact the company’s GLP-1 coverage in ways that benefit employees.

Concerns about upfront costs, lack of long-term benefits

It is undeniable that employees want access to weight loss medications at lower prices. The NFP report found that 29% of employees would be willing to change employers to take advantage of GLP-1 benefits. “These are very important options that employees are looking for in the workplace,” Conway said.

Employers know there is demand for these drugs. But they face higher costs, and most of the returns to employees and employers are long-term. “While they want their employees to be as healthy as possible,” they weren’t willing or able to cover such a high bill, said Raymond Brown, Mercer’s North American clinical pharmacy leader.

Ben Barner, clinical pharmacy leader at insurance broker Brown & Brown, said many companies are concerned about high upfront costs that will only cause people to stop taking medications and ignore long-term benefits. When people stop taking these medications, they tend to gain back the weight they lost. Barner said employers are concerned about spending so much money without knowing employees are committed and will reap long-term health benefits.

Regardless of whether they use pills or injectable medications, employers are still concerned about employees’ commitment to using medications long-term. Barner added that their availability does not make the economics more favorable for companies, given that oral versions of GLP-1s do not offer a significant price difference for employers from injectable drugs.

Despite employee demand, companies are looking for ways to change or eliminate coverage.

A recent study from Mercer showed that employers are withdrawing GLP-1 weight loss drug coverage in 2026, with more cuts being considered for 2027. Among employers with 500 or more employees, 6% have discontinued coverage in 2026 and 5% plan to do so for 2027 or are actively considering doing so, the survey found.

The Business Group on Health survey found that among companies that cover GLP-1s for weight management, 10% are unlikely or very unlikely to continue that coverage in 2027 for cost reasons, according to Magda Rusinowski, vice president of the nonprofit organization that represents employers’ perspectives on health-related issues.

Many companies are also tightening restrictions on employee eligibility. For example, while many companies require a BMI of 30 or higher or 27 or higher due to a weight-related medical condition, some now require a BMI of 35 or higher to qualify, said Eileen Pincay, national pharmacy practice leader for benefits and human resources consulting firm Segal. Others are only covering diabetes medications or becoming stricter on behavior management requirements, he added.

Some employer plans may not offer the pills at all

Although GLP-1 pills are essentially the same price as injectable drugs, trials show they are less effective at losing weight.

Jeff Levin-Scherz, population health leader at WTW, said it’s possible some employers won’t put them on their list of covered drugs. This will depend on whether pharmacy benefit managers will charge fees for not offering them, or whether PBMs will make employers ineligible for other discounts if they fail to offer the pills. “It’s still early. We don’t really know what’s going to happen,” Levin-Scherz said.

Some employers are exploring lower-cost options for employees. For example, employers may reimburse employees through health reimbursement arrangements (HRAs), which are employer-sponsored plans that reimburse employees for their medical expenses, Barner said.

Employers can also provide access to their employees through a third-party weight management program instead of traditional pharmacy assistance programs. For example, Lilly’s relationships With more than 15 independent program administrators, including 9amHealth, GoodRx, and Goodpath, to offer employers tailored obesity coverage options. Novo Nordisk also offers a similar employer program.

Some employers also offer GLP-1 coverage for weight management through direct-to-consumer programs. These may cost employees more than the standard $25 insurance co-pay, but are still typically less than what employers pay for medications through pharmacy benefit managers. Employers can also subsidize some or all of the manufacturer’s monthly prescription costs, Barner said.

Oral GLP-1 drugs for weight loss, specifically Wegovy and Foundayo, are available directly to consumers at upfront prices starting at $149 per month for the lowest doses. For injectable drugs, someone without insurance might pay a starting price of $299 a month for Zepbound and $199 a month for Wegovy, but of course people don’t keep up the starting doses, so the actual monthly cost is higher.

A major factor contributing to the high cost of weight loss medications is that there are currently only two major pharmaceutical companies that manufacture the medications, so options are limited. That’s expected to change over time, which would increase competition and drive prices down, but that’s probably at least a year away, Barner said.

Meanwhile, the federal government has announced initiatives to reduce the cost of GLP-1 drugs – starting July 1, GLP-1s will be available through Medicare For as low as $50 – and with other drug options expected to come to market, prices are expected to drop even further eventually.

“The net prices of these drugs have come down, and I think there will continue to be pressure on them to come down, especially as drugs from other manufacturers are approved. We hope that will continue to bring prices down,” Levin-Scherz said.

The bad news is that for the foreseeable future, consumers will continue to pay high prices and employers will continue to be more cautious about insurance coverage. “Eventually prices will come down. Not yet,” Pincay said.