Ozempic is driving up your health costs, whether you can get your hands on it or not

About 165 million Americans rely on employer-sponsored health insurance, yet workers still may not be getting the coverage they want — especially when it comes to in the case of drugs such as Novo Nordisk’s weight-loss drug Wegovy and diabetes drug Ozempic.

About 1 in 3 employees want more tools to fight obesity, according to a recent report by consulting firm Gallagher. Glucagon-like peptide-1 therapies such as Wegovy and Ozempic, which mimic hormones produced in the gut to suppress appetite, are considered game-changers ahead.

These weight loss drugs have grown in popularity in the US but are still not widely covered – even though “Americans have higher rates of obesity and diabetes and poor health today than ever before.” ever,” according to Trilliant Health’s “2024 Trends Shaping”. Health Economy report.

Cost is an important issue.

Although research shows that obesity drugs may have more health benefits than shedding unwanted pounds, groups representing US insurers said concerns remain over the high cost. involved in covering that medication, which is about $1,350 per month for one patient.

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The high cost of GLP-1 drugs, as well as the large number of workers who can benefit from using them, is a major driver of high health care costs, several studies show. Already, the cost of prescription drugs rose 8.6% last year, due in part to the use of GLP-1 drugs, according to a recent Mercer report.

“Is that important? Yes,” said Sunit Patel, Mercer’s chief health expert in the US.

Patients on this medication months, if not years, of continuous treatment are required.

“It’s becoming a lifetime drug,” said Gary Kushner, chairman and president of Kushner & Company, a benefits planning and management firm. “That’s a very expensive commitment.”

Currently, less than half – 42% – of companies cover expensive weight loss drugs to some extent. Another 27% are considering adding content in the next year, according to Mercer research.

However, “not everyone who wants it can get it,” Patel said.

On the other hand, 3% of employers have recently removed coverage for these drugs and 10% of companies that currently cover them are considering removing them for 2025.

To improve access to weight-loss drugs, many businesses will have to pay even more — and health care costs are already rising in the wake of the pandemic, as employers and employees they are set to spend the most on defense by 2025, according to WTW. , the consulting firm formerly known as Willis Towers Watson. US employers project that their health care costs will rise by 7.7% in 2025, compared to 6.9% in 2024 and 6.5% in 2023.

Among employers’ concerns was how to cover drug demand behind weight, the Kaiser Family Foundation survey also found.

“Employers face the challenge of incorporating these potentially valuable treatments into their already costly benefit plans,” Gary Claxton, KFF vice president said in a press release.

Currently, some employers cover only GLP-1 drugs for the treatment of diabetes, while others cover some GLP-1 drugs for weight loss but only if they are approved by the Food and Drug Administration. for that use – which controls Ozempic, ie. it is only FDA approved to treat Type 2 diabetes.

“Most employers cover Ozempic for diabetes, they don’t necessarily cover it as an anti-obesity drug,” said Seth Friedman, leader of pharmaceuticals and health plans at Gallagher.

That makes it even more difficult for workers to know if they can get the drug and if it will be covered by their insurance. “They see it’s covered but they get rejected,” Friedman said.

A 2023 survey by the International Foundation of Employee Benefit Plans found that 76% of companies surveyed offered GLP-1 coverage for diabetes, compared to only 27% that did. for weight loss – leaves many workers stranded.

“There’s clearly a need for them, and it’s not for diabetes, it’s for weight loss,” Kushner said.

“Looking ahead to 2025, about half of most employers will cover drugs for weight loss,” said Beth Umland, Mercer’s director of health and benefits research. However, “even if they do, there are guards around who can use it.”

The demand for these treatments is only expected to increase – but the added controls for safety are also helping to keep costs down.

Almost all employers have “use control” restrictions, such as a prior approval requirement, according to Gallagher’s Friedman.

For some companies, that may mean that employees should try other weight loss methods first or meet with a nutritionist and enroll in a weight loss management program. Some may require a body mass index, or BMI, threshold of at least 30, depending on how the plan is set up, Friedman said.

This information is available during open enrollment, which usually starts from the beginning of December.

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