Digital health companies are finding innovative ways to integrate weight loss medications, particularly glucagon-like peptide-1 (GLP-1) agonists, as these drugs gain popularity among both healthcare providers and patients. This shift presents new opportunities and challenges for companies focused on diabetes and obesity, such as Teladoc and Omada Health, as they work to offer reduced costs to employers.
“If you're a digital diabetes solution and you don't have some way to integrate GLP-1s, you're behind the times,” said Caroline Pearson, executive director of the Peterson Health Technology Institute, underscoring the urgency for digital health solutions to keep pace with developments in weight management medications.
Over the years, digital health companies have successfully sold online tools for diabetes management and weight control to self-insured employers and payers. One prominent success story from this arena is Livongo, which capitalized on the growing interest surrounding these health tools, culminating in its initial public offering in 2019 and subsequent acquisition by Teladoc for $18.5 billion just over one year later.
The launch of GLP-1 drug Wegovy for weight loss approval in June 2021 marked a turning point for diabetes and obesity care. With increasing demands for these medications, their usage has surged, almost quadrupling between 2021 and 2023 according to analyses conducted by PricewaterhouseCoopers (PwC) Health Research Institute. This uptick has significantly inflated per-member costs from $8.99 to $23.16, leading employers to seek effective strategies to manage these expenses.
Virta Health, founded in 2015, has shifted its operational model, which previously focused on behavior change and nutritional support, to include specific offerings for GLP-1 patients. The company has since implemented a GLP-1-focused program enabling it to serve as GLP-1 prescriber through the pharmacy benefit manager (PBM) of employers. Virta’s CEO Sami Inkinen remarked, “GLP-1s are here to stay. They are a useful tool in a toolkit, but I think most employers and health plans are realizing it’s just one tool, and responsible usage requires appropriate strings attached.”
By participating in Virta’s program, patients can obtain coverage for GLP-1s, with the program employing telehealth and smartphone applications to bolster diet, exercise, and behavioral health initiatives aimed at maintaining weight loss even after ceasing medication.
The financial ramifications of GLP-1s have shifted the way companies view virtual diabetes and weight management programs. Randa Deaton, vice president of purchaser engagement at Purchaser Business Group on Health—a coalition comprising 40 large employers such as Walmart and Microsoft—noted, “I think the biggest issue is the cost is unsustainable, and we're seeing significantly increased utilization of the drugs. Most employers want to provide weight management solutions for their employees, but they want to be sure these are accompanied by evidence-based care and support programs.”
Omada Health joined the trend by introducing its GLP-1 companion tool earlier this year. This tool connects patients eligible for these medications to necessary resources and incentives, requiring engagement within the company's platform, guiding employees through medication management lessons, and allowing interaction with health coaches or peer groups.
Omada CEO Sean Duffy commented, “Offering the companion tool can improve patients' experiences and possibly get them off the costly drugs faster.” This indicates the significant pivot within the digital health sector toward integrated solutions geared to lessen reliance on expensive medications.
Traditional telehealth companies have also adapted by adding GLP-1 prescribing capabilities to their service lines. Teladoc Health began marketing its own companion program to employers aiming to curb high medication costs. Through this initiative, Teladoc not only prescribes GLP-1 medications but also promotes adherence and behavior change strategies to help manage overall healthcare expenses.
Despite these advancements, concerns about the efficacy of digital health tools targeting diabetes management persist, as many of these solutions were criticized for not proving their cost-effectiveness. A March 2024 study from the Peterson Health Technology Institute revealed many digital diabetes management offerings lacked clinically relevant outcomes.
Caroline Pearson's skepticism resurfaces as she observes new digital health companies promoting solutions to reduce employee dependency on high-cost GLP-1 drugs. “I think that's reasonable for medication adherence,” she stated. “It's hard for me to believe there are clear cost savings at the moment.”
This trend still reflects the broader aspirations of digital health firms as they strive to develop sustainable models efficient enough to navigate the changing dynamics of healthcare spending and medication management.