Why Employers Are Struggling with Weight Loss Drug Costs

More and more people are using weight loss drugs through their jobs. But these drugs are expensive. This is causing big problems for employers.

Big companies are more likely to cover these drugs.

• 43% of large firms now offer this benefit.
• That's up from 28% last year.
• But smaller companies are not following suit.
• Only 16% of firms with 200 to 999 workers cover weight loss drugs.

These drugs, called GLP-1 medications, treat diabetes and obesity.

• They help people lose weight.
• But they are very expensive.
• For example, Wegovy costs about $1,350 for a month's supply.
• Even with discounts, that's a lot of money.

Employers know these drugs are important.

• They help attract and keep good workers.
• Nearly half of firms that don't cover them say the benefit is important for employee satisfaction.
• Over 36 million people with job-based insurance qualify for these drugs.

But the costs are higher than expected.

• Nearly 60% of large firms say more workers are using the drugs than they predicted.
• Two-thirds of these employers say the drugs have a big impact on their prescription drug spending.

One employer spent more on GLP-1 drugs than any other drug this year.

• Last year, these drugs were only the 32nd highest cost.
• A large retailer said they spent half a million dollars this year.
• They expect to spend $1.2 million next year.

The high costs have been a problem for a long time.

• President Donald Trump recently said the drugs would soon be available for $150.
• But negotiations are still ongoing.

Some employers are trying to cut costs.

• They are limiting who can get the drugs.
• Others are requiring workers to join weight management programs.
• Some firms have even dropped the benefit altogether.

But this might not be the end of the story.

• More workers are demanding coverage.
• The drugs are being approved for more conditions.
• And prices might come down.

GLP-1 drug costs are also pushing up insurance premiums.

• The average cost for family coverage hit $27,000 this year.
• That's up 6% from last year.
• Workers contribute $6,850 on average.
• Employers pay the rest.

Individual coverage also went up.

• It's now $9,300 on average.
• That's a 5% increase.
• Employees pay $1,440, and employers cover the rest.

Premiums have been rising steadily.

• But next year could be worse.
• Several consulting firms predict higher costs.
• GLP-1 medications, hospital prices, and tariffs could all push up premiums.

"There is a quiet alarm bell going off," said Drew Altman, KFF's CEO.

• Employers might have to raise deductibles or increase cost-sharing.
• Neither employers nor employees like this.
• But companies might do it to hold down premium increases.