More than 73% of adults aged 20 and over are overweight or obese, according to the Centers for Disease Control and Prevention (CDC). Excess weight in employees has been linked with lower productivity, increased risk of illness, and overall greater costs to employers.
To shed unwanted pounds, employees are often on the lookout for the latest weight loss trends. The introduction of new weight loss drug coverage has many workers contemplating leaving their current jobs in favor of companies offering it.
With obesity becoming more prevalent throughout the U.S., drug manufacturers have unveiled a solution, a class of drugs referred to as GLP-1 medications. These glucagon-like peptide 1 agonists can be found under various brand names such as Wegovy and Ozempic and some have been approved by the FDA for use in chronic weight management.
Surprising Results Show Employees Would Switch Jobs for Weight Loss Drugs
According to a recent survey published by Ro, in partnership with the Obesity Action Coalition, 44% of respondents revealed they would change jobs to gain coverage for obesity treatment. In addition, 51% say they would remain at a job that they did not like to retain weight loss drug coverage.
The survey also sheds light on how weight loss is affecting employees across the country. Despite its normality, people living with obesity continue to face judgment and stigma due to their weight. Approximately 54% say that they have been treated unfairly, teased, or discriminated against due to their weight.
GLP-1s are becoming more well-known as they gain the spotlight on TV ads and media headlines. The survey showed that 68% of obese individuals have heard of at least one GLP-1 drug, with the medication Ozempic having the highest brand recognition despite not yet being approved for weight loss by the FDA.
What You Need to Know About New Weight Loss Drugs
Created for type 2 diabetes patients, GLP-1 agonists are highly effective for weight loss. These anti-obesity drugs can successfully supplement dieting and serve as a viable alternative to bariatric surgery and other extreme obesity treatments.
According to the Mayo Clinic, the use of GLP-1 drugs can result in a total weight loss of about 10.5 to 15.8 pounds when using liraglutide. The use of these drugs, in combination with healthy lifestyle changes, can lead to a total weight loss of about 33.7 pounds.
There are two main ways that GLP-1 receptor agonists aid in weight loss. First, the drugs force the stomach to empty slower, causing a person to feel more satisfied with less food.
This ultimately helps a person eat less and create a calorie deficit. In addition, the drug sends a signal to the brain that there is still food in the stomach. This can help minimize cravings and reduce a person’s appetite.
New Weight Loss Drugs Causing Disruption in Workforce
The market for weight loss drugs such as GLP-1s is huge, and the full impact of these medications is not yet clear. However, employers across the country are already feeling the effects.
Many employers are motivated to cover these drugs to help make their employees healthier and to reduce employee turnover. However, the significant cost of these drugs has many businesses hesitant to move forward with coverage.
According to a recent employer survey on GLP-1 medications, 25% of employers currently offer coverage to employees with positive outcomes. In addition, 4 in 10 employers consider it a priority to offer coverage in 2024.
Employer Health Plans Pulling Back Coverage for GLP-1
As demand continues to surge for GLP-1 employer health plan benefits, many insurers are starting to pull back on coverage. A recent analysis of GLP-1 benefits performed by obesity care provider Found showed that coverage for GLP-1 drugs has fallen by 50% since December 2022.
There are multiple reasons for these pullbacks, including concerns about costs and shortages. Employers that currently cover these weight loss drugs are also facing skyrocketing healthcare costs due to the popularity of new treatment options such as Wegovy.
Controversy regarding how and why the drugs are used is resulting in backlash from insurance companies. Despite their undeniable effectiveness in managing weight loss, some insurance companies consider obesity drugs to be for “vanity” reasons and refuse to cover the costs, despite many doctors deeming them medically necessary for certain patients suffering from obesity-related conditions.
GLP-1 Is Expensive for Average Americans
While many Americans desire access to the newest weight loss drugs, most cannot afford them without employer health coverage. According to HR Brew, the drugs are estimated to cost up to $10,000 per patient annually. This can result in significant financial challenges for employer health plans and the HR professionals responsible for managing these benefits.
These blockbuster weight loss drugs have been priced significantly higher in the United States compared to other high-income countries.
According to an article published by CNBC, a 30-day supply of the diabetes drug Ozempic, now being offered off-label for weight loss, has a list price of approximately $936 in the U.S. However, the same drug is being offered at a list price of $168 in Japan.
The popular weight loss drug Wegovy is also overpriced in the U.S. The drug, which has the same active ingredient as Ozempic and has been approved for weight loss, costs approximately $1,300 in the U.S. In Germany, the drug is priced at just $328.
The Increasing Pressure of Shortages
There is currently a global shortage of GLP-1s, partially due to the sudden surge of off-label prescriptions issued for weight loss. Medications, such as Wegovy, have been deemed an effective treatment option for patients who have long struggled to lose weight through diet and exercise and who also have a Body Mass Index (BMI) of 30 or higher.
However, social media attention surrounding the use of these diabetes drugs for weight loss has resulted in increasing shortages. Shortly after Wegovy gained approval, social media influencers and celebrities began to take the medication and share its effects with the world.
The drug soon became viral, and many individuals wanting to lose weight but had no medical reason to take it strived to get their hands on the drug.
Major Companies Stopping Coverage for GLP-1
Many major companies are facing pressure from doctors, patients, drug manufacturers, and obesity advocacy organizations to provide access to new weight loss drugs, from private insurers and public companies to government programs such as Medicare.
However, many of these companies report they cannot meet these demands due to the extravagant cost of GLP-1 medications. As the year comes to a close, major companies are making important decisions about what benefits they will provide to employees in the upcoming year.
One of the biggest decisions they will need to make deals with weight-loss drugs and whether their budget can handle the exorbitant cost of these drugs. Major companies that do decide to offer coverage may do so with strict limitations. For example, some companies are restricting GLP-1 drugs to individuals with a body mass index of at least 35.
The University of Texas Health System Pulling GLP-1 Coverage
Business Insider reported that the University of Texas System would stop covering more costly GLP-1 weight loss drugs for their employees, including the popular Wegovy drug. The company told employees that its cost for the prescription drug rose to over $5 million per month in May, up from $1.5 million per month just a year and a half ago.
According to Fierce Healthcare, the University of Texas Health System would eliminate coverage for weight loss drugs on September 1st on its employee health and Medicare plans for retirees. This would result in a whopping 233% cost increase for the medication on the payer’s end.
The University of Texas System said they would need to boost premiums by a minimum of 2.5% to help accommodate the rising demand for the drug. Many experts believe that this ongoing trend will result in serious health consequences for individuals who need the drug.
Ascension No Longer Covering Wegovy
Following in the footprints of other major companies, healthcare company Ascension recently dropped Wegovy from their health plans. Ascension Healthcare operates Catholic and non-profit hospitals and health facilities throughout the Midwest and in parts of the South.
On July 1st, the healthcare company stopped covering anti-obesity drugs for its health plan members, including access to older weight loss medications such as phentermine. Ascension currently employs about 139,000 individuals and operates 139 hospitals and health facilities spread across 19 states.
With this change, Ascension employees are now responsible for paying for their weight loss drugs out-of-pocket. This includes not only current FDA-approved weight loss drugs but also any new weight loss drugs that could become available in the future. With the steep price tags attached to these new drugs, many current users of the drug will no longer be able to afford the cost.
Stay Ahead of Health Insurance Market Trends with Benefits Consulting from New City
Many employers need help to decide whether to provide employees coverage for GLP-1s. This coverage could help companies cut down on their healthcare spending in the long term. However, the ongoing costs of these expensive weight loss drugs have many employers concerned about the effect they will have on their operating budgets.
The experienced consultants at New City Insurance have helped countless businesses stay ahead of health insurance market trends by providing expert guidance and structuring employee benefits in a way that provides value to employees while achieving cost savings. To learn more about our benefits consulting services, contact New City Insurance today at 888.210.2765.