Interest surrounding weight-loss medications has surged as more U.S. employers are starting to offer coverage for these treatments, which include popular drugs like Wegovy, Ozempic, and Zepbound. A recent survey conducted by Mercer found close to half of U.S. companies with over 500 employees now offer health benefits for these medications, marking significant growth from previous years.
According to the report, around 44% of large employers provided coverage for weight-loss drugs this year, up from 41% in 2023. Notably, among employers with over 20,000 employees, the numbers were even higher, with 64% covering these weight-loss treatments compared to just 56% last year. This trend indicates growing acceptance of obesity as a significant public health issue worthy of treatment through medication.
Weight-loss drugs, particularly those falling under the GLP-1 class, have gained immense popularity due to their effectiveness. For example, Novo Nordisk's Wegovy and Eli Lilly's Zepbound have been shown to help patients lose between 15% to 20% of their body weight. The introduction of these medications has redefined strategies for managing obesity and related health conditions, prompting employers to reevaluate their healthcare offerings.
“Cost is clearly a concern,” stated Tracy Watts, Mercer’s national leader for U.S. health policy. Employers are understandably worried about the rising expense of these medications, which have driven up overall healthcare costs. Consequently, many companies are now implementing authorization requirements to regulate who can access these drugs, ensuring they are administered to individuals most likely to benefit from them.
For example, without insurance, Wegovy can cost approximately $1,349.02 for a monthly supply, and Zepbound’s list price is about $1,059.87. With such high prices, it's no wonder only about 25% of Americans have health insurance covering these weight-loss drugs, according to data from the consulting firm Leverage.
The database tracked by Leverage reveals only 13.7 million Americans are covered under private or employer-sponsored plans for GLP-1 weight-loss treatments, even though estimates suggest this number could rise to 24.4 million, as many employers don’t disclose detailed plan specifics. Most coverage stems from state Medicaid programs, which cater to low-income families, providing weight-loss drug coverage for around 31.6 million people. Medicare, on the other hand, only covers these treatments under specific circumstances, such as when prescribed for co-occurring health conditions.
Mercer's survey also indicates changing attitudes among employers. With only about 44% of companies with 500 or more employees covering weight-loss drug expenses, there remains significant room for growth. Meanwhile, the race to sway employers has intensified. Drugmakers like Eli Lilly and Novo Nordisk are actively engaging with labor unions and HR teams nationwide to promote the merits of these medications as both treatment for obesity and potential healthcare cost savers.
One substantial argument drug manufacturers make is the potential long-term savings on healthcare costs by treating obesity. By effectively managing obesity and reducing risk factors for chronic illnesses, employers can save significantly on health-related expenses down the road. Both Novo Nordisk and Eli Lilly are exploring additional health benefits these medications might confer. For example, Wegovy has been recently approved to reduce risks associated with heart conditions, and Eli Lilly is seeking new approvals for Zepbound to help manage sleep apnea.
Citing numerous studies, the companies highlight the broader usefulness of these medications, which may even help mitigate conditions like addiction and Alzheimer’s disease and decrease COVID-19-related mortality. This narrative is slowly gaining traction among employers considering the integration of weight-loss drugs.
While the spike in employers providing coverage for weight-loss drugs is promising, the path forward is not without challenges. The soaring costs associated with these treatments could lead to revisions of coverage policies, and employers may tighten eligibility requirements to curb expenses even more. Some employers are now offering more than three health plans, providing greater accessibility for their employees, but with this added choice might also come the risk of increased costs and complexity.
Throughout the healthcare community, attentiveness to these developments remains high, reflecting the broader societal move toward defining obesity management as both a health imperative and economic necessity. With data from Morgan Stanley indicating the global market for weight-loss drugs could reach $105 billion by 2030, the urgency to adapt healthcare offerings to meet demand will likely grow.
Despite the increasing employer coverage, experts observe there's still significant work needed to bridge the gap between patients wanting access to these medications and the actual insurance coverage available to them. For now, the momentum appears to be with the drugmakers as they work tirelessly to influence employer health plans and healthcare policymakers.
The narrative around weight-loss drugs is one of optimism, with employers beginning to take decisive action. Though the rising costs pose challenges, the potential benefits presented by these medications could pave the way for substantial health care innovations moving forward. Focus will now shift to how these changes will manifest within health insurance schemes and the long-term impact on the patient population.
