High-cost weight reduction drugs boost nutrition counseling with employers

A couple of years ago, when Virta Health founder and CEO Sami Inkinen approached employers about leveraging the corporate’s nutrition-oriented digital diabetes program for obesity-related weight reduction, most corporations weren’t able to commit. 

Now, more employers are all in on dietary counseling and training as they grapple with rising costs for diabetes and weight reduction drugs reminiscent of Novo Nordisk’s Ozempic and Wegovy and Eli Lilly’s Mounjaro and Zepbound. 

“Our goal just isn’t to drive the utmost variety of GLP-1 prescriptions, but we’re the telemedicine company of alternative for a lot of employers to responsibly use these drugs, after which also get members off of those drugs and sustain the load loss nutritionally,” said Inkinen.

The corporate published a peer-reviewed study a yr ago which found that patients on Virta’s nutrition-counseling programs maintained weight reduction one yr after they stopped using GLP-1s. But Inkinen says lower than 10% of the corporate’s weight reduction enrollees are using the favored drugs — most go for nutrition counseling alone and still lose a median of 13% of their weight over the course of 1 yr.  

“Quite frankly, despite the message that perhaps the pharma corporations are pushing, no person really desires to be on these drugs ceaselessly, for those who get the alternative and the tools,” he said.

For Virta, the demand for such services resulted in record 60% revenue growth in 2024 to greater than $100 million, based on Inkinen.

He said the 10-year-old startup is on pace to be profitable within the second half of this yr.  

Firms surveyed by the Purchaser Business Group on Health said glucagon-like peptide medications, commonly generally known as GLP-1 drugs, at the moment are a top driver of employer plan drug costs, with 96% of those surveyed expressing concerns concerning the long-term cost implications.

Consequently, more employers want to utilization management strategies reminiscent of nutrition counseling and training services.

“Most employers want their plan members to have access to weight-management medication options, reminiscent of GLP-1s, nonetheless, additionally they wish to be certain that it’s clinically appropriate and accompanied by the medical and lifestyle modification supports to make sure long-term safety and efficacy for the person,” said Randa Deaton, vp of purchaser engagement with Purchaser Business Group on Health.

Yet, using those programs sometimes lead to latest headwinds in relation to pricing for GLP-1s of their pharmacy advantages plans, Deaton notes.

“We have seen that PBMs and drug manufacturers have been reducing their rebates when employers are requiring a way of life management intervention as a part of the drug criteria, so it has been difficult for employers to place in place the fitting programs to support their employees and members of the family,” she said.

Considered one of Virta Health’s rivals, Omada Health, can also be seeing strong demand for its GLP-1 weight reduction management program, after partnering with Cigna’s Evernorth pharmacy advantages division on a program called EncircleRx. Program enrollment went from 2 million covered lives within the second quarter of 2024 to eight million within the third quarter, based on Cigna CEO David Cordani.

“The market continues to soak up the challenges of affordability” of GLP-1 drugs and is searching for a more value-based approach, Cordani told analysts on the corporate’s Q3 earnings call.

“Clients are observing, and physicians are observing the start-and-stop dynamic that’s transpiring for some patients, which also doesn’t generate the specified or intended final result,” he said.

Omada Health reportedly filed a confidential registration to go public with the Securities and Exchange Commission last summer, based on Business Insider. The corporate has declined to comment on the report.

Virta Health was valued at $2 billion following its last round of funding in 2021. It’s Inkinen’s second startup. He was certainly one of the co-founders of online real estate firm Trulia, which went public in 2012 and was later bought by rival Zillow.

As for Virta IPO plans, Inkinen says for now he’s focused on growing the corporate.

“If you could have a thing that is working, it’s 1,000 times easier to simply scale your thing, your team, your culture,” he said.