Is GLP-1 Cost Help on the Way for Employers?

Fifty-one percent of employers in a recent benefits study cited glucagon-like peptide-1 (GLP-1) diabetes and weight-loss medications as the top driver of prescription drug spend, surpassing even cancer and autoimmune treatments.

But relief may soon be available.

U.S. pharmaceutical company Eli Lilly recently launched a platform (dubbed “Employer Connect”) to close the gap for patients who have started or are seeking treatment but can’t afford the drug costs, which typically top $1,000 per month. Lilly will charge employers a net discounted price of $449 a month for a new multi-dose form of Zepbound.

In addition, Danish pharmaceutical company Novo Nordisk announced it will lower the list price of several of its GLP-1 drugs — namely Wegovy, Rybelsus and Ozempic — by 35% to 50% from the current list price. Effective Jan. 1, 2027, the changes apply to all doses of these medicines and are meant to address access barriers, especially for patients whose out-of-pocket costs are linked to list price — including individuals with high-deductible health plans (HDHPs) or coinsurance benefit designs.

Looking at the Fine Print

“It’s important to note that these new programs are available without the benefit of any utilization management,” said Louis Zollo, a pharmacy practice leader at HR and benefits consulting firm Segal.

Utilization management is a set of strategies used by insurers to ensure costly drugs such as GLP-1s are used safely, appropriately and cost-effectively. It commonly involves prior authorization, limiting coverage to Food and Drug Administration-approved uses (type 2 diabetes and obesity, in the case of GLP-1s) and requiring proof of progress (i.e., ongoing weight loss) for continued coverage.

Zollo also noted if an employer doesn’t cover weight-loss GLP-1s today, these programs may seem like an economical way to add the coverage, but HR and total rewards professionals should consider the number of organizational employees that would seek coverage for these drugs to understand total cost.

Magda Rusinowski, a vice president at health- and benefits-focused nonprofit organization Business Group on Health, cautioned lower prices generally do not allow for customization of patient eligibility.

“Open-access manufacturer platforms raise concerns about volume growth, inappropriate prescribing and drug waste, which could offset price reductions,” she said. “[Business Group on Health research shows] 73% of employers planned to cover GLP-1s to treat obesity in 2026. However, sustaining this level of coverage may be at risk due to the medication’s role in driving up overall healthcare costs and due to the disproportionate share of plan costs being driven by this one drug class.”

What the Market Shows

The establishment of these programs and prices changes could signal a willingness from manufacturers to offer transparent net prices for employers wishing to connect GLP-1 coverage with specialized patient-support programs, said Rusinowski.

“This provides employers with not only another way to explore coverage but also an important price point to reference in negotiations with their pharmacy benefit manager (PBM),” she explained. “Regardless of whether employers adopt these direct models, the programs have already generated meaningful market discussions about better pricing and program design.”

Cody Midlam, a pharmacy community director at consulting firm WTW, noted there are already many potential “partners” in this space, such as:

• Clinical vendors to support weight loss with or without GLP-1 drugs;
• Vendors to facilitate various payment structures for GLP-1 drugs;
• PBM programs;
• Health plan programs; and,
• Combinations of all the above.

“Because the list price cut does not guarantee lower net costs for employers, it is unlikely to materially expand coverage of GLP-1 drugs for obesity,” he said. “The price cuts are incentivizing employers to explore creative ways to leverage direct-to-consumer (DTC) and direct-to-employer (DTE) pricing. This helps employers with choice and flexibility.”

Midlam also advised employers to pay attention to the nuances between various market price points. For example:

• Receipt of rebates is restricted by contracts between PBMs and drug manufacturers, which can limit management strategies, vendor integrations and cost sharing.
• Claims process off the benefit, so they typically won’t apply to accumulators or clinical checks like drug interaction tracking.
• Employers may incur additional administrative fees, and claims may or may not apply to accumulators and clinical checks like drug interaction tracking.

Rusinowski added employers also should monitor emerging GLP-1 data on long-term outcomes, discontinuation effects, muscle loss, overall cost effectiveness and healthcare utilization changes over time.

“More competition in the GLP-1 drug class, including the introduction of oral formulations, is expected to impact price,” she said. “In some countries, generics will soon be available.”

As these new formulations come to market, Rusinowski said employers should be prepared with a formulary strategy to ensure their PBM’s utilization management decisions are consistent with overall goals to reduce cost while maintaining access.

Worth the Hype?

Even though the cost for GLP-1s appears to be dropping, Segal’s Zollo said you should keep in mind most Americans can’t afford the price, and not everyone stays on the medication for very long. Even the oral version is not a magic pill, he said.

“It’s worth doing some research or hiring an expert to explain all the weight-loss programs currently available on the market, and not just medications,” he said. “When you understand the pros and cons, you can use that knowledge to build a benefits program that works best for your people.”

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