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Tag: GLP-1 drugs

  • Why Employers Still Cover GLP-1 Drugs as Prices Skyrocket

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    Among the workplace benefits employees say they appreciate most are flexible work arrangements, paid time off, 401(k) retirement accounts, career development programs, and of course company health insurance plans. But now, many businesses are scaling back or ending an increasingly popular benefit within their wider healthcare coverage – paying for workers’ use of glucagon-like peptide-1 (GLP-1) medication for weight loss.

    Initially developed to treat diabetes by regulating blood sugar levels, GLP-1 medication has become increasingly popular for losing weight. Recent surveys found that 60 percent of people taking Ozempic, Wegovy, Mounjaro, Saxenda, and other versions of the drug did so primarily for weight loss. But that surging demand has led pharmaceutical manufactures to repeatedly hike their prices for GPL-1s, which has spiked the costs of employer coverage of the drugs. As a result, many businesses are now having to rethink the terms of including those medications in their plans, or remove them entirely.

    Most businesses had already had to adjust to the average 6 percent rise in their employee health insurance premiums this year, with many facing double-digit rises in 2026. At the same time, a recent joint study by nonprofits Peterson Center on Healthcare and KFF determined employee use of GLP-1s has been far higher than anyone had anticipated — mostly due to the drug’s growing use for weight loss. Those factors are adding to the financial pinch for employer health plans and forcing them to respond.

    According to the Peterson-KFF survey, 19 percent of all employers with 200 employees or more cover GLP-1 use for losing weight in their health plans. But that rises to 30 percent among companies with 1,000-5,000 workers, and 43 percent for even bigger firms. Those latter figures represent a roughly 28 increase in coverage of the drug compared to 2024.

    Not surprisingly, nearly a quarter of all employers said staff use GLP-1 drugs for weight loss was higher than they expected, with that number rising to nearly 60 percent at larger businesses. That led nearly a third of respondents to report those medications had “significantly impacted their prescription drug spending,” rising to 66 percent at companies with 5,000 workers or more.

    “Before we knew it, we spent half a million dollars and were projected to go up to $1.2 million the following year,” a benefits manager with a retailing company said in anonymous comments to the Peterson-KFF survey about GLP-1 costs.

    Many employers are responding to both rising premiums and higher medication costs by passing on some of the increases to employees, and inching up co-pays workers have to finance. But that probably won’t be enough to offset the surging costs of GLP-1s. As a result, most companies are revising the way their plans cover the medication.

    Many businesses are limiting GLP-1 exclusively for diabetes treatment — with some requiring company health officials to approve that use beforehand. But because taking the medication has become so popular for weight loss, other employers don’t feel they can cut employees off from it.

    On the one hand, by covering the drug under company health plans, some employers have found GLP-1s have become a de facto benefit capable of attracting new recruits, while also helping to retain existing workers. Meantime, a lot of businesses have calculated that as expensive as the medication is, its effectiveness in helping weight loss has led to reduced costs related to employee cardiovascular diseases and other conditions attributed to obesity.

    Still, employers facing rising prices of the drug are having to stem its spreading use. In some cases, companies have decided to continue covering GLP-1s for weight loss, but only by employees above new body mass index (BMI) thresholds. Others additional measures include creating lifestyle and nutrition programs to make sure workers using the medication stay slimmer once they stop taking the medication.

    “(W)e put in the requirement that you have type 2 diabetes for certain GLP-1s, and then we put in a BMI of 35 or higher for the weight loss GLP-1s,” a HR official with a manufacturing company said in survey comments, noting some employees had been “grandfathered in” for continued use while others will need to qualify for it in the future. “We are trying to decide how to manage this crazy cost of the GLP-1s.”

    What’s behind that determination to keep covering GLP-1s?

    It comes partly from employers’ desire to safeguard employees’ health while sparing them much of the costs of doing that. At the same time, a lot of managers already recognize GLP-1 medications are likely to become ever bigger factors in healthcare coverage. That’s growing increasingly likely with the number of diseases the drug has been shown to improve continuing to multiply over time.

    As a result, even health insurance companies providing employee health coverage to business owners have warned that GLP-1 isn’t going away any time soon — whether the drugs are used for treating diabetes, losing weight, or addressing other conditions.

    “Our insurance provider, Cigna told us that within the next nine to 12 months, there’s really not going to be a choice,” said a health manager with a manufacturing company in the survey comments. “(A)ll insurance companies are probably going to be covering GLP-1s for weight loss.” 

    And as a result, many employers are resolving themselves to do likewise — though they’re starting so set some limits.

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    Bruce Crumley

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  • Few Employer Health Plans Cover Ozempic. This Company Can Help

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    Many American workers want to use GLP-1 drugs, like Ozempic, to meet their weight loss goals. The trouble is, most employee health plans don’t cover them — but a new company hopes to change that.

    A prescription drug employee benefit company, called Andel, announced its debut at the HLTH conference in Las Vegas on Monday. Early next year, Andel will help reduce the cost of providing GLP-1 medications in employee benefits packages by forming an employer co-op. Under this setup, Andel is able to buy the medication in bulk directly from drug manufacturers instead of negotiating prices from pharmacy benefit managers, which are usually owned by insurers. Employers can reduce the cost even further by adding subsidies.

    “Instead of asking [employers] to sign up to a fully-funded insurance plan, which is really expensive and unpredictable and challenging, all we would ask for is a small 50 to $100 per claim subsidy, which we pass directly to reduce the cost of the drugs,” Andel CEO and Co-founder Jay Bregman says.

    Employers are legally required to cover GLP-1 medication for diabetes, but not for weight loss. The injectable version of the drugs typically costs between $1,000 and $1,500 a month — which isn’t doable for most employers, especially with premiums projected to spike by 9 percent next year. Currently, 64 percent of employers do not cover GLP-1 medication to help workers shed pounds — but boy, do they wish they did. Up to 35 percent of Americans say they “are interested” in using the drug to lose weight, according to a PwC survey.

    Lesley Grady, senior vice president of enterprise marketing at Sequoia — a benefits brokerage known for serving Silicon Valley tech startups and large companies — confirms strong interest in GLP-1 coverage. She says their clients are looking for creative solutions to make the medication more affordable for employers. The brokerage plans to start offering Andel to clients who are looking to beef up their benefit plans.

    “Employees in tech have high expectations of their benefits, but I think employers obviously know that if they include it with unchecked access, it will blow up their budget,” Grady says. “So they’re really under pressure to find solutions right now that don’t just open up their floodgates — we see that strategy with Andel.”

    Andel doesn’t plan to stop with weight loss drugs — in the coming years, the company hopes to apply the same cooperative, subsidy model to preventative Alzheimer’s drugs and potentially gene therapy, the co-founders told Inc.

    “Expanding access to healthcare is the cornerstone of our mission,” says Andel Co-founder Ritu Malhotra. “Andel gives employers an innovative new pharmacy-benefit solution that fills the coverage gap.”

    Andel was co-founded by Bregman, who successfully exited three companies — including the ridesharing network Hailo, rebranded to Lyft Europe — and Malhotra, who’s also a pharmacist and former CVS Health executive. At the conference, the founders announced they raised $4.5 million in capital to launch the platform. Investors include Lightbank, Seedcamp, Bertelsmann Investments, Houghton Street Ventures, and Springboard.

    Eric Ong, partner at Lightbank — a venture capital firm that invests heavily in benefit tech companies — told Inc. that Malhotra’s PBM experience and Bregman’s entrepreneurial success is uniquely positioned to help tackle the high cost of in-demand prescription drugs. The firm invested in the company because they haven’t seen any other solutions addressing this challenge, he says.

    “There’s a disconnect between employers wanting to offer good benefits and health benefits and keeping their employees healthy — at the same time, they can’t afford it. So, we just found that really interesting and sort of novel in the market today,” Ong says.

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    Kayla Webster

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  • The Ozempic Revolution Is Stuck

    The Ozempic Revolution Is Stuck

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    Millions more Americans are now eligible for obesity drugs. But the injections remain maddeningly hard to find.

    Illustration by The Atlantic. Source: Getty.

    The irony undergirding the new wave of obesity drugs is that they initially weren’t created for obesity at all. The weight loss spurred by Ozempic, a diabetes drug in the class of so-called GLP-1 agonists, gave way to Wegovy—the same drug, repackaged for obesity. Zepbound, another medication, soon followed. Now these drugs have a new purpose: heart health.

    On Friday, the FDA approved the use of Wegovy for reducing the risk of heart attack, stroke, and death in adults who are overweight and have cardiovascular disease. The move had been anticipated since the publication of a landmark trial in the fall, which showed the drug’s profound effects on cardiovascular  health. The decision could usher in a new era where GLP-1 drugs become mainstream, opening up access to millions of Americans who previously didn’t qualify for Wegovy.

    Some of the obstacles stopping people from getting the drug may also begin to crumble. Insurance companies commonly deny coverage of Wegovy because obesity is seen as a cosmetic concern rather than a medical one, but that argument may not hold up for cardiovascular disease. “This new FDA indication is HUGE,” Katherine Saunders, an obesity-medicine physician at Weill Cornell Medicine, told me in an email. Wegovy may soon be within reach for many more Americans—that is, if they can find it.

    In practice, Wegovy is maddeningly hard to get hold of. Shortages of injectable semaglutide, the active ingredient in Wegovy and Ozempic, have been ongoing since March 2022; currently, most doses of Wegovy are in limited supply. As the popularity of semaglutide has skyrocketed, demand has completely outstripped the capacity of its manufacturer, Novo Nordisk. The drug comes in injection pens containing a glass vial; “these are not easy products to make,” Lars Fruergaard Jørgensen, the CEO of Novo Nordisk, said in August. In response to the shortages, the company withheld its supply of lower Wegovy doses last year. Because treatment on the medication must begin in low doses, this meant that new patients who wanted to start on Wegovy functionally couldn’t. In January, the company began “more than doubling the amount of the lower-dose strengths” of the drug, a Novo Nordisk spokesperson told me, and it plans to gradually increase overall supply throughout the rest of the year.

    The ongoing shortages have left providers and patients feeling stuck. “It is devastating to prescribe a lifesaving medication for a patient and then find out it’s not covered or we can’t locate supply,” Saunders said. Doctors are scrambling to make do with what’s available. Ivania Rizo, an endocrinologist at Boston Medical Center, told me she has had to turn to older GLP-1 drugs such as Saxenda to “bridge” patients to higher doses of Wegovy, although now that is in shortage too. Patients can spend each day calling pharmacy after pharmacy in search of one with Wegovy in stock, Rizo said. In desperation, some have turned to versions of the drug that are custom-made by compounding pharmacies with little oversight, despite the FDA expressing concerns about them. The shots are supposed to be taken weekly, but others have attempted to stretch their doses beyond that.

    That the new FDA approval could very mainstream obesity drugs may create long-needed pressure to help resolve these shortages. It makes clear that Wegovy is a lifesaving medication not only for people with obesity but also for those with cardiovascular disease—the leading cause of death in the U.S.—putting the impetus on Novo Nordisk to ramp up production. But in the short term, the access issues may persist. “The new approval is very likely to worsen shortages, because the demand for Wegovy will continue to climb—now at an even faster pace,” Saunders said.

    If patients think they’re stuck now, they’re about to feel entrenched. Wegovy is the only obesity drug that has been approved to reduce the risk of heart attacks, but none of its competitors is easily available either. Supplies of certain dosages of Eli Lilly’s Mounjaro, a diabetes drug whose active ingredient is sold for obesity as Zepbound, are limited, and shortages are expected later this year. “We need supply to increase dramatically,” Saunders said. Both Novo Nordisk and Eli Lilly have invested heavily in expanding production capacity, but some of the new plants won’t open until 2029.

    For all of its advantages, the FDA approval has a sobering effect on the unrelenting hype around GLP-1s. So much of the excitement around obesity drugs has focused on the future, as dozens of pharmaceutical companies develop more powerful drugs, and commentators imagine a world without obesity. In the process, the issues of the present have gone overlooked. More drugs won’t make much of a difference if the drugs themselves are out of reach.

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    Yasmin Tayag

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  • Ozempic Can Turn Into No-zempic

    Ozempic Can Turn Into No-zempic

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    No medication in the history of modern weight loss has inspired as much awe as the latest class of obesity drugs. Wegovy and Zepbound are so effective that they are often likened to “magic” and “miracles.” Indeed, the weekly injections, which belong to a broader class known as GLP-1s, can lead to weight loss of 20 percent or more, fueling hype about a future in which many more millions of Americans take them. Major food companies including Nestlé and Conagra are considering tailoring their products to suit GLP-1 users. Underlying all this excitement is a huge assumption: They work for everyone.

    But for a lot of people, they just don’t. Anita, who lives in Arizona, told me she “took it for granted” that she would lose weight on a GLP-1 drug because “the people around me who were on it were just dropping weight like mad.” Instead, she didn’t shed any pounds. Likewise, Kathryn, from Florida, hasn’t lost any weight since starting the medication in October. “I was really hoping this was something that would be a game changer for me, but it feels like it was just a lot of wasted money,” she told me. (I’m identifying both Anita and Kathryn by their first name only to allow them to speak openly about their health issues.)

    Some people can’t tolerate the side effects of the drugs and have to stop taking them. Others simply don’t respond. For some, the strength of the dose, or length of the treatment, does not seem to make a difference. Appetites might remain robust; the “food chatter” in the brain may stay noisy. Together, both groups of less successful GLP-1 users account for a not-insignificant share of patients on these drugs—potentially up to a third. “We don’t really know why it happens, [but] we know it does happen,” Louis Aronne, an obesity-medicine specialist at Weill Cornell Medical College, told me. Despite the promise of a so-called Ozempic revolution, lots of “No-zempics” have been left behind.

    Of the two biggest reasons some people don’t lose weight on GLP-1 drugs—side effects and nonresponse—the former is much more straightforward. The GLP-1 drugs Wegovy and Zepbound (which contain the active ingredients semaglutide and tirzepatide, respectively), are known for causing potentially gnarly gastrointestinal symptoms, such as nausea and vomiting, although most people’s reactions are mild and temporary. Yet some have it far worse. Severe, albeit uncommon, side effects include pancreatitis, severe gastrointestinal distress, low blood sugar, and even hair loss, which “can push people off” the drugs, Steven Heymsfield, a professor who studies obesity at Louisiana State University, told me. In one of the biggest studies of semaglutide, encompassing more than 17,000 people over about five years, nearly 17 percent of patients discontinued the medication because of side effects.

    Far more mysterious are the people who tolerate the drugs but respond weakly to them—or sometimes not at all. Researchers have known this might happen since these drugs were in early clinical trials. About 14 percent of people who took semaglutide for obesity saw minimal impacts of less than 5 percent weight loss in one study, as did 9 to 15 percent of people who took tirzepatide in a similar one. In her own experience working with patients, “somewhere between a quarter and a third” are nonresponders, Fatima Cody Stanford, an obesity-medicine specialist at Harvard, told me, adding that it can take up to three months to determine whether the drug is working or not. That the same medication at the same dosage can lead to dramatic weight loss in one person and hardly any in another “remains confounding,” Aronne told me.

    The broad explanation is that it has something to do with genetics. The drugs work by masquerading as the appetite-suppressing hormone GLP-1 and binding to its receptor, like a key fitting into a lock. Although the lock’s overall shape is generally consistent from person to person, its nooks and crannies can vary because of genetic differences. “For some people, that key just won’t fit right,” Eduardo Grunvald, an obesity-medicine doctor at UC San Diego Health, told me. In other cases, genes may limit the effects of these drugs after they bind to GLP-1 receptors. One possibility is that people metabolize the drugs differently: Some patients may break them down too quickly for them to take effect; others may process them too slowly, potentially building up such high levels of the medications that they become toxic, Heymsfield said.

    For No-zempic patients, perhaps the most consequential impact of individual variation is on the propensity for obesity itself. “We are all very different from a genetic standpoint, in terms of our risk of weight gain,” Grunvald said. Numerous factors can drive obesity, including diet, environment, stress, and—most pertinent to GLP-1 drugs—altered brain function.

    GLP-1 drugs target a pathway that regulates appetite and insulin levels. Some cases of obesity can be caused by a disruption in that particular mechanism, in which case GLP-1s can indeed be wondrous. But “not everyone has dysfunction in this particular pathway,” Stanford said. When that is the case, the drugs won’t be very effective. A different pathway, for example, controls the absorption of fat from food; another increases energy expenditure. In these people, GLP-1s might tamp down appetite to a degree, maybe leading to some weight loss, but a different drug may be required to treat obesity at its root. “It is not all about food intake,” Stanford said.

    That’s not to say that No-zempics are out of options. They might have better success switching from one GLP-1 to the other, or even stacking them, Heymsfield said. Some patients who don’t respond to GLP-1s at all can get better results with older drugs that work on different obesity pathways, Aronne said. One, called Qysmia, a combination of the decades-old drugs phentermine and topiramate, can lead to an average weight loss of 14 percent body weight at its highest dose. If medications don’t work, bariatric surgery remains a powerful option, one that may even be growing in popularity. Last year, the number of bariatric surgeries performed in the U.S. grew despite the boom in GLP-1 usage, a trend that some expect to continue, because so many people don’t tolerate the drugs.

    The intense hype around the game-changing nature of GLP-1s makes it easy to forget that they are, in fact, just drugs. “Every drug that’s ever been made” works in some people and not in others, Heymsfield said; there’s no reason to think GLP-1s would be any different. Remembering that they are in an early stage of development has a sobering effect. Eventually, obesity drugs may leave fewer people behind. The category is expanding rapidly: By one count, more than 90 new drug candidates are in development.

    They are evolving to attack obesity from multiple fronts, which, at least in theory, widens their net of potential users. In an early study on an experimental candidate named retatrutide—called a triple agonist because it acts on GLP-1 as well as two other targets involved in obesity, GIP and glucagon receptors—100 percent of people on the highest dose lost 5 percent or more of their body weight. New candidates are also expected to have fewer side effects. They have to, Heymsfield said, because the competition is so steep that any new drug has to be “as good with less side effects, or better.”

    But no matter how good these drugs get, it’s unrealistic to think that they’ll become a one-size-fits-all treatment for everyone with obesity. The disease is simply too complex, with too many drivers, for a single type of medication to treat it. More than 200 different drugs exist for treating high blood pressure alone; in comparison, Aronne said, regulating weight is “far more complicated.” The future, rife with options, holds promise that No-zempics may find a way forward. Yet considering all the unknowns about obesity and what causes it, that may not be enough to guarantee that they will see the results they want.

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    Yasmin Tayag

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