More U.S. employers covering GLP-1s for weight reduction

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Good morning! More U.S. employers are covering a buzzy class of medicines called GLP-1s for weight reduction, a survey found. 

Roughly one-third of employer health plans within the U.S. said they’re covering GLP-1 drugs like Novo Nordisk‘s Ozempic and Wegovy for each diabetes and weight reduction, up from 26% last 12 months. 

GLP-1 drugs for weight reduction also grew as a portion of employers’ overall annual medical claims spending, making up nearly 9% in 2024 in comparison with roughly 7% the 12 months prior. 

That is in keeping with the survey released Thursday by a nonprofit organization, the International Foundation of Worker Profit Plans, which incorporates greater than 33,000 member corporations or public institutions. The survey was conducted in May on almost 300 employer health plans within the U.S. 

The rise in coverage is a win for patients, who often struggle to shoulder the hefty $1,000 monthly price tags of those drugs without insurance and other rebates. It is also excellent news for the manufacturers of those treatments, Novo Nordisk and Eli Lilly, that are working to extend insurance coverage for the drugs and patient access overall. 

Notably, most worker health plans and other insurers don’t cover drugs for weight reduction, including GLP-1s reminiscent of Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound. The federal Medicare program also doesn’t pay for weight reduction treatments unless they’re approved and prescribed for one more health condition. 

GLP-1s for diabetes, reminiscent of Ozempic and Eli Lilly’s Mounjaro, are sometimes covered by plans. 

Each weight reduction and diabetes drugs have skyrocketed in popularity within the U.S. — while drawing increasing investor interest — for helping people achieve dramatic weight reduction over time. They work by mimicking a number of hormones produced within the gut to suppress an individual’s appetite and regulate their blood sugar. 

Some 57% of employer health plans said they only cover the medications for diabetes management, up from 49% in 2023, in keeping with the survey. 

But a considerable share — around 19% — said they’re considering whether to cover them for weight reduction.

“This recent survey data shows that within the last six months, GLP-1 coverage has increased for each weight reduction and diabetes,” Julie Stich, the vice chairman of content on the International Foundation of Worker Profit Plans, said in a release. 

Stich said recent regulatory approvals and clinical trials, together with increasing demand for GLP-1 medications within the U.S., have contributed to broader coverage.

For instance, Novo Nordisk’s Wegovy is now cleared in U.S. for slashing the chance of great heart complications. 

Insurance industry experts previously told CNBC that the approval won’t mechanically translate to widespread insurance coverage of the burden loss drug. On the very least, some plans will take notice of Wegovy’s recent use and begin assessing whether to cover the treatment after they next update their formularies, those experts said. 

Novo Nordisk and Eli Lilly are also conducting a slate of studies on their GLP-1 drugs in several patients. That features those with chronic kidney disease, sleep apnea and a certain fatty liver disease. 

But there is no doubt that the medications can placed on a strain on any health plan’s budget. 

Around 85% of employers which can be covering GLP-1s are relying “heavily” on requirements that aim to regulate costs, in keeping with the survey. 

That features certain eligibility rules, reminiscent of requiring employees to have a certain BMI, or body mass index, to receive coverage. It also includes “step therapy,” which requires its members to try other lower-cost medications or technique of reducing weight before using a GLP-1.

Meanwhile, other insurance policy are pulling back coverage of the medications for weight reduction. Blue Cross Blue Shield of Michigan, the state’s largest insurance company, said it should begin eliminating coverage of various weight reduction drugs next 12 months.

There’s also a much bigger issue at hand, whilst insurance coverage improves amongst employers: Novo Nordisk and Eli Lilly have been struggling to make enough supply of their treatments to satisfy demand. That’s one other a part of the GLP-1 story that we are going to proceed to watch. 

Be at liberty to send any suggestions, suggestions, story ideas and data to Annika at annikakim.constantino@nbcuni.com.

One in every 4 health-care investment dollars goes toward corporations which can be using AI, and deal activity in AI for health care has grown twice as fast as AI deals within the tech industry as a complete, in keeping with a recent report from Silicon Valley Bank, which is now a division of First Residents Bank. 

The report said VCs invested $7.2 billion in health-care AI last 12 months, and the figure is on course to achieve $11.1 billion this 12 months. 

Administrative applications of AI in health care are drawing around 60% of the funding, the report said. Clerical tasks like paperwork are a serious burden for the health-care sector, and so they are contributing to physician burnout and staffing shortages.

Greater than 90% of doctors report feeling burnt out regularly, and 64% of those doctors said overwhelming administrative workloads are a serious reason for it, in keeping with a February survey from Athenahealth. Physicians are spending a mean of 15 hours per week outside their normal hours maintaining with administrative tasks, the survey said.

In other words, administrative work is a giant problem for the health-care sector. VCs are particularly inquisitive about it because it often faces less regulatory oversight than clinical decision support tools or patient-facing solutions do, SVB’s report said. 

Though health-care AI corporations are expected to boost more funds this 12 months than they did last 12 months, SVB said accessing quality data and sufficient computing power to coach models might be barriers to adoption. 

This is especially true for AI-powered patient diagnostic tools, which make up 52% of total investment in clinical solutions, in keeping with the report. As of now, there’s a “significant gap” in access to the essential computing power and data to coach a model that may accurately diagnose a patient. 

“Corporations that may access data, partner with clinicians and hospitals to leverage patient data, and partner with big tech corporations are higher suited to deploy AI at scale,” the report said. 

Be at liberty to send any suggestions, suggestions, story ideas and data to Ashley at ashley.capoot@nbcuni.com.