Many U.S. corporations are grappling with medical health insurance coverage issues for staff in terms of GLP-1 drugs for weight reduction.
Despite the hefty price tag — typically between $1,000 to $1,500 a month — consumers are clamoring for drugs like Novo Nordisk‘s Wegovy and Eli Lilly‘s Zepbound. This class of medication, historically used to treat diabetes, has gained broader appeal, and while some employers are providing coverage, often with limitations, others are struggling to find out how you can cover them without breaking the bank.
An October survey of 205 corporations by the International Foundation of Worker Profit Plans found 76% of respondents provided GLP-1 drug coverage for diabetes, versus only 27% that provided coverage for weight reduction. But 13% of plan sponsors indicated they were considering coverage for weight reduction.
“Immediately, there’s still a number of questions amongst employers,” said Julie Stich, vice chairman of content on the International Foundation of Worker Profit Plans. Along with high costs, corporations do not have long-term data on effectiveness and potential unintended effects to support coverage, and a few are only biding their time until more of this information exists.
Still, many advantages experts say it is a matter of when, not if, more employers will cover GLP-1 drugs.
Definitely, prescription volumes of GLP-1 weight reduction drugs are soaring. Novo Nordisk recently became Europe’s largest publicly traded company on account of investor enthusiasm in regards to the obesity market, and it just made a serious acquisition in a bid to extend manufacturing capability of GLP-1 treatments on account of demand, buying drug manufacturer Catalent for $16.5 billion to extend the provision of Wegovy and diabetes shot Ozempic.
Meanwhile, Eli Lilly’s recent results were buoyed by the launch of Zepbound, which won approval from U.S. regulators in early November and raked in $175.8 million in sales for the fourth quarter. Wall Street’s most optimistic assessment sees a drug that may post greater than a billion dollars in sales in its first yr in the marketplace and eventually grow to be the biggest drug of all time.
Here’s what employers and employees have to know in regards to the changing landscape for weight-loss drugs and medical health insurance coverage.
Annual cost is the elephant in room at $18,000 per worker
A minimum of 70% of the highest 18 business health plans Tufts Medical Center tracks in its specialty drug database cover GLP-1 drugs for obesity, with various limitations. But the biggest corporations within the U.S. are generally self-insured, in order that they’re those calling the shots in terms of coverage — and for them, cost is a serious issue.
States can determine whether to cover weight-loss drugs under Medicaid, which implies coverage can vary, in response to a report from KFF. The state of North Carolina recently made the choice to stop coverage of obesity drugs for state employees.
Medicare doesn’t cover weight-loss medications, except patients with Type 2 diabetes. Notably, 76% of older adults think Medicare should cover prescription medication for weight management, in response to recent findings from the National Poll on Healthy Aging.
At $1,500 a month, employers might be paying $18,000 a yr for only one worker’s supply of weight-loss drugs, said Greg Stancil, a senior account executive at Scott Profit Services. When you’ve got, say, 56 employees on the drug, that is over $1 million a yr. That is a value that “just didn’t exist in 2022, now they’ve this potential long-term expense they’re attempting to work out what to do with,” Stancil said.
“The balancing act is maintaining a strong advantages package in order that they can recruit and retain employees, but additionally managing the associated fee of that package to maintain costs down for workers and the employer,” Stancil said. “Every employer would like to cover all the pieces to make everybody joyful, but anyone’s got to pay for it.”
Employers already covering weight-loss drugs say it’s price it
Ninety-nine percent of corporations already covering GLP-1s say they plan to proceed covering them, in response to a survey by Accolade, a customized health-care company. Amongst other things, these employers cite higher worker satisfaction and wellbeing, increased engagement in other wellbeing programs and improvement in other health conditions as reasons for covering.
“HR profit leaders recognize that is something employees want because a number of people do need to shed extra pounds,” said James Wantuck, associate chief medical officer at Accolade.
BMI, obesity and questions in plan design
There are obvious advantages to shedding pounds and associated health advantages, but there are other health-care and price concerns employers need to consider.
What might the utilization be inside the company? Who must be covered? Should there be limitations reminiscent of someone who has an obesity diagnosis, or BMI over a certain limit?
A majority of corporations (79%) that cover these drugs do require insured members to hop over some hurdles before coverage is approved, in response to the survey by the International Foundation of Worker Advantages Plans. This includes requiring prior authorization; using step therapy (32%), which requires the usage of other lower cost medications first; and specific eligibility requirements (16%). The survey also found that corporations allowed to pick out multiple cost-controls, if applicable, also use annual and lifelong maximums. Fourteen percent of respondents who cover these drugs said that they had no cost-control mechanisms in place.
Potential long-term costs to employers is a problem, and an especially hard calculation since nobody really knows how long people might want to stay on the drugs for long-term effectiveness, while going off the drugs is related to gaining weight back.
Employers are “really struggling to find out the associated fee versus profit,” Stich said.
Although GLP-1 drugs are high-priced, they currently represent only 6.9% of annual claims, in response to data from the International Foundation of Worker Profit Plans.
How consumers can try to avoid wasting within the meantime
Consumers whose corporations don’t cover the drugs are in a troublesome position. Many can be forced to pay out of pocket, or lose out, said Brian O’Connell, an analyst who covers the insurance marketplace for InsuranceQuotes.com. “It really relies on your checking account. When you’re making $45,000 a yr, have a mortgage and a toddler in college, there are limited options,” O’Connell said.
First, employees should discover from their employer what the advantages actually are, Wantuck said. In some cases, these drugs could also be covered, but restrictions or requirements may apply, reminiscent of a BMI threshold to qualify, or the worker can have to take part in an exercise or dietary program.
Consumers with business insurance may have the opportunity to get assistance through the manufacturer in the event that they are eligible for savings programs. The web sites for Wegovy and Zepbound do lay out terms for discount manufacturer programs that will apply. For instance, with Wegovy it’s essential to have a prescription and may’t be enrolled in a plan where the drug is roofed. Consumers should read the restrictions fastidiously.
Novo Nordisk says roughly 50 million adult Americans have coverage for anti-obesity medicines — 40 million through business insurance and 10 million through Medicaid — and roughly 80% of U.S. Wegovy patients with business coverage pay $25/month or less. For commercially insured patients who would not have insurance coverage, or pay money for his or her prescriptions (but should not government beneficiaries), Novo Nordisk and Eli Lilly cite potentially significant savings off the total retail price: as much as $500, in response to Novo Nordisk, and as much as 50%, in response to Eli Lilly, though monthly and annual caps on discounts apply.
“For consumers, it never hurts to search for manufacturer coupons or discounts and apply for them,” wrote Krutika Amin, associate director at health care policy, research and news organization KFF, in an email. “The reply could also be no in certain cases but in other situations patients could stand to avoid wasting several hundred dollars.”
Amin added that as more manufacturers enter the GLP-1 market, manufacturers could also be offering competing discounts to attempt to get patients to choose their drug. “The market continues to be latest but as demand stabilizes and there may be more competition within the GLP-1 market, manufacturers may change prices to remain competitive. So even when the reply was no last time, it is perhaps price keeping an eye fixed out,” she wrote.
Looking overseas, which some U.S. consumers do in terms of high-priced drugs, is less more likely to help out on this case, at the very least right away. While recent KFF research indicates that even with coupons and discounts, prices within the U.S. are higher than in other large, wealthy countries, Amin said that as countries have faced shortages for people using these drugs for diabetes it will not be possible to get these drugs abroad.
Meanwhile, advantages consultants expect the coverage problem will eventually resolve itself, given the necessity and long-term advantages these drugs may have the opportunity to offer.
“It is a matter of time before most corporations can be covering these drugs in some fashion,” Wantuck said. “There’s a number of evidence that they assist people shed extra pounds and forestall really serious illnesses like stroke and heart attack. It is going to be harder and harder to not cover these drugs because the advantages appear to be so great.”