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GLP-1 Class Drugs:To Cover or Not?
PAGE 2Table of ContentsS E C T I O N 1 : I N T R O D U C T I O NIntroduction..............................................................................................................................3Background Continued.............................................................................................................4S E C T I O N 2 : C L I N I C A LTo Cover...................................................................................................................................5Not To Cover............................................................................................................................5,6S E C T I O N 3 : F I N A N C I A LS E C T I O N 4 : E M P L O Y E E E N G A G E M E N TS E C T I O N 5 : C O N C L U S I O NConclusion...............................................................................................................................12Contributors.............................................................................................................................13To Cover...................................................................................................................................8Not To Cover............................................................................................................................9To Cover..................................................................................................................................10Not To Cover...........................................................................................................................11
PAGE 3B A C K G R O U N D :A person is considered overweight if their BMI is between 25.0 and under 30 and obese if their BMI is 30.0 or higher. Obesity can be further subdivided in 3 classes: class 1 is a BMIbetween 30 and under 35, class 2 is a BMI between 35 and under 40, and class 3 is a BMI of 40or higher. Social Determinants of Health (SDoH) contribute to obesity in the form of access tohealthy foods, a safe environment to exercise, and expendable income to fund healthy lifestylehabits such as gym memberships and fresh fruit and vegetable. Socio-economic status is also apredictor of health literacy and access to quality healthcare. Obesity hasbecomeone of theAccording to the Food and Drug Administration, approximately 4 outof every 10 Americans are currently obese. As such, obesity hasbecome one of the highest cost drivers of the United Stateshealthcare system; medical costs for adults with obesity isapproximately $1,861 more than individuals with a “healthy” bodymass index (BMI), a ratio of height to weight. To combat this growing epidemic, the pharmaceutical market hasbeen flooded with Glucagon-like-peptide-1 receptor agonists, alsoknown as GLP-1s. GLP-1s are a class of medications approved by theFDA for the treatment of type 2 diabetes mellitus and, in some cases,obesity. Simply put, GLP-1s bind to and activate the GLP-1 receptorsin the pancreas; resulting in slower gastric emptying and glucoseabsorption. This mechanism of action results in decreased appetiteand a longer lasting feeling of fullness. Introduction & Backgroundof theUnited Stateshealthcaresystem.SECTION 1: INTRODUCTION1234425
PAGE 4Class of ObesityBMI RangeClass 130 to > 35Class 235 to > 40Class 3> 40 Obesity treatment options typically include lifestyle and behavioralchanges such as adopting a healthy diet, improving sleep schedule,reducing stress, and increasing levels of physical activity. In cases where lifestyle changes are unsuccessful, or other co-morbidities takeprecedence and require immediate weight loss, medical interventionssuch as weight loss drugs, weight loss devices, or bariatric surgery areprescribed. Medical interventions often require individuals to makelifestyle changes to ensure they maintain their weight and the associatedreduction in health risk. The burden of disease attributed to obesity and consumer demand hasfueled a need for pharmaceutical intervention resulting in the increasedresearch and development of GLP-1s. Consumer demand has beendriven by two primary factors: celebrity and influencer endorsementpraising GLP-1s as “life-changing” and pharmaceutical companiescapitalizing on these endorsements to increase consumer awareness.The short supply, high demand, and cost of GLP-1s has highlighted thedisparity in GLP-1 drug access as there are 126 million individuals living with obesity; however, only 4% of individuals have access to GLP-1 drugs.Due to this shortage, individuals are now looking to their employer withregards to GLP-1 drug coverage. The decision to cover or not cover GLP-1 drugs comes with various clinical, financial, and employeeengagement related implications; employers are urged to make aninformed decision based on their organization’s needs.B A C K G R O U N D C O N T I N U E DMedical costsfor adults withobesity areapproximatelyindividuals witha “healthy“body massindex (BMI).DIVERSITY, EQUITY, INCLUSION & BELONGING | ONEDIGITAL WHITEPAPERSECTION 1: INTRODUCTIONindividualsare living with obesity..1 “FDA Approves New Drug Treatment for Chronic Weight Management, First Since 2014.” FDA, June 4, 2021.2“Adult obesity facts.” Centers for Disease Control & Prevention, May17, 2022.3“Glucagon-Like Peptide-1 Receptor Agonists.” Collins L, Costello RA., January 13, 2023.4“User’s Guide to mechanism of action and clinical use of GLP-1 receptor agonists.” Postgraduate Medicine, 2015.5“Defining adult overweight & obesity.” Centers for Disease Control & Prevention, June 3, 2023.6“Obesity Prevention Strategies.” Harvard T.H. Chan School of Public Health. April 12, 2016.7“Workforce Mental Health in 2024: The Trends HR Leaders Need to Know.” Lyra, January 18, 2024.67
PAGE 5While weight and health are not always connected, obesity is highly correlated with multiple co-morbid and chronic medical conditions, including heart disease, several forms of cancer, andtype 2 diabetes; not to mention a contributor to musculoskeletal ailments. Typically, lifestyleinterventions are recommended before drug therapy or surgery, including dietary modifications,exercise, and behavioral therapy; however, many patients do not achieve their weight loss goals with lifestyle modifications alone.Clinicalof individualshave accessto GLP-1drugs...Approximately 25% of employers currently provide coverage for weight loss medications. However, the question remains, shouldmore plan sponsors cover these blockbuster weight lossmedications with some agents yielding results upwards of 25%weight loss? The answer is — it depends. TO COVER:SECTION 2: CLINICALNOT TO COVER:GLP-1 medications have been on the market for more than 15 years, they were initially studied,marketed, and used to treat individuals with diabetes. The more recent approval of this class ofdrugs for obesity purposes has a lesser-known side effect profile and little to no long-term clinicaldata related to the safety of these products over lengthy periods of time in obese patients. Zepbound, the newest product to enter the market, touts clinical trial results of weight lossaveraging over 22% of body weight, significantly greater than the 15% average weight loss seenwith Wegovy. These medications work by mimicking a naturally occurring hormone, GLP-1,which increases satiety leading to reduced appetite and food cravings.
PAGE 6of patients wereutilizing GLP-1weight lossmedications ayear after initialprescription tomaintain weight.Some of the more common side effects include abdominal pain,nausea, vomiting, constipation, and diarrhea, with more serious sideeffects including medullary thyroid cancer. According to a 2023 analysiscompleted by Prime Therapeutics, although there were various reasonsfor discontinuation, with the side effect profile commonly cited, only~32% of patients were still utilizing GLP-1 weight loss medications ayear after their initial prescription. Once an individual ceases utilization of the medication, the weight-losseffects are mitigated. The STEP-4 trial of Wegovy (semaglutide), andthe SURMOUNT-4 trial of Zepbound (tirzepatide) demonstrated thatweight regain after discontinuation is both common and profound. DIVERSITY, EQUITY, INCLUSION & BELONGING | ONEDIGITAL WHITEPAPERSECTION 2: CLINICALMany conversations regarding weight loss medications have led back to the suspectedpotential of a return on investment (ROI) for the coverage of these products. The assumptionis that the coverage of these medications will lead to lower obesity rates and decreasedobesity related health issues such as lower blood pressure, cholesterol, heart attacks, and others. The concern with this assumption is several-fold. As previously mentioned, thesemedications only provide a weight loss benefit while they are being utilized, but once thedrug is discontinued, weight is regained.The reason behind the weight regain is related to how these medicationswork to suppress appetite; thus, when the appetite suppression is removed,patients become hungrier than they once were, and caloric intake increases.Therefore, to achieve weight loss and maintain the weight lost, patients mustcontinue utilizing the ~$1000 per month medication meaning there is notrue escape plan to discontinue utilization. This furthermore amplifies theconcern payers have surrounding the budgetary impact of covering GLP-1medications for weight loss. 8
PAGE 7DIVERSITY, EQUITY, INCLUSION & BELONGING | ONEDIGITAL WHITEPAPERSECTION 2: CLINICALSimilarly, other health benefits observed when the weight is lost are eroded once the drugis stopped. According to a recent Wegovy-sponsored seminar, only 2% of eligible patients(based on BMI and comorbidities) are currently getting treatment for weight loss. Thatopens the possibility of 98% of eligible patients potentially starting these medications ifweight loss drugs were available on their pharmacy benefit. 8“Continued Treatment With Tirzepatide for Maintenance of Weight Reduction in Adults With Obesity: The SURMOUNT-4 Randomized Clinical Trial.” Jama, 2024.
PAGE 89Obesity and obesity-related conditions cost the American healthcare system approximately $173 billion a year with employers bearing asignificant portion of the cost. In addition to the egregious costs ofGLP-1 drugs, the indirect costs associated with obesity should be evenmore concerning to employers. While hard to quantify, indirect coststo employers include value of lost work, insurance costs, and wages. The value of lost work can be in the form of lost wages, loweredproductivity/presenteeism, and absenteeism. For employers, making the decision to cover GLP-1 weight lossdrugs has to be evaluated based on financial implications; especiallywith a price tag of $1000 a month per individual. FinancialTO COVER:SECTION 3: FINANCIALOverhead costs for the organization also increase as individuals suffering from obesity oftenrequire higher life insurance premiums and workers’ compensation payouts. According to OneDigital's internal modeling and book of business, the addition of GLP-1 drugcoverage utilized specifically for weight loss adds approximately 7.0% in annual medical claimspend, with a range of 5% to 10%. This calculation excludes potential savings from offsettingmedical services such as bariatric surgery. Covering other medical interventions for weightloss, such as bariatric surgery, raises claims costs by 6% on the low end and 15% on the highend; theoretically, making GLP-1 coverage a more cost-effective option.Obesity andobesity-relatedconditions costthe Americanhealth care systemapproximately 9
PAGE 9Weight lossmedicationsaverage more than SECTION 3: FINANCIALAmong employers covering GLP-1 drugs, 79% primarily employ utilizationmanagement programs for cost control. Step therapy is a less frequentlyapplied method, chosen by 32% of employers, while 14% have no establishedcost control mechanism. ICER estimated that an annual health-benefit price benchmark range of$7,500 to $9,800 would make the medications cost effective; however, this would require manufacturers to discount the price 44%-57%. NOT TO COVER:Bottom line, covering GLP-1 drugs for weight loss will increase medical claim costs by 7.0%as per OneDigital’s internal modeling and book of business and the additional risk ofemployee turnover threatens an organization’s ability to see any financial benefit.9“The medical risks of obesity.” Postgraduate Medicine, 2009.Many employers are cautious of covering these products due to costs.Weight loss medications, particularly the GLP-1 medications, averagemore than $1000 per month. In a 2022 independent analysis completedby the Institute for Clinical and Economic Review (ICER), it was found thatSemaglutide (the active ingredient in Wegovy), was not cost effective atcommonly used willingness-to-pay thresholds to treat adults with obesity. In industries with a high turnover rate, such as the hospitality industry (70%-80% annually), it isunlikely that the financial benefit will be seen as the employee may leave the organization.
PAGE 10Currently, only 25% of employers provide coverage for GLP-1 drugs; however, this number isexpected to increase. The scarcity and proven effectiveness (at least in the short term) hastriggered some employers to provide coverage for GLP-1 drugs to attract and retain top talent.Employees are looking to join or stay at companies that care about employee wellbeing andoffer comprehensive benefits to support their physical, financial, and mental wellbeing.Research shows that approximately 77% of employers agree that employees would feel betterabout their health insurance if it also covered GLP-1 drugs. This investment may also improveoverall employee wellbeing, health, morale, and productivity. GLP-1 drugs are highly sought after, given the low supply and exorbitant cost. Coverage of theseweight loss drugs has even been seen as a recruiting strategy; however, industry turnover ratesmay impact the employer’s return on investment. In analyzing the impact of covering GLP-1’s asan engagement tactic, consider the impact on employee wellbeing, company values, andorganizational culture. Employee EngagementTO COVER:SECTION 4: EMPLOYEE ENGAGEMENTEmployees spend nearly 2/3 of their day at work and find self-worth/value through theiremployment; therefore, when an employer invests in their employees, employee morale andproductivity increases. When employees are more invested in the organization, they are moreloyal, less likely to look for another job, and more productive. 10
PAGE 11Despite the high demand for GLP-1 drugs, employers are still debating whether covering thesemedications is in the best interest of their workforce. Despite the demonstrated perceivedvalue, employers could endure negative consequences if future research indicates long-termside-effects, complications, or negative consequences associated with GLP-1 medications. Obesity is a multi-faceted condition for individuals to battle. There are multiple factors thatcontribute to obesity, from lifestyle habits, to genetics, mental health, side-effects frommedications, socioeconomics, environment, and hormones.2 If an organization chooses not to cover GLP-1 medications, or even if they do, there are otherresources that are inexpensive and low risk when it comes to weight management. Examplesinclude policy and environment changes like mapped out walking trails, requiring healthy foodoptions for employer sponsored meals, encouraging social support groups, offering healthyfood options, nutrition coaching, and clinical therapy. Offering additional support does not always have to be costly. There are often programs andresources available through the medical plan and through local hospitals and communities. SECTION 4: EMPLOYEE ENGAGEMENTNOT TO COVER:10“Continued Treatment With Tirzepatide for Maintenance of Weight Reduction in Adults With Obesity: The SURMOUNT-4 Randomized Clinical Trial.” Jama, 2024.
PAGE 12While supporting employee wellbeing, including weight management is a must,coverage of GLP-1 medications may or may not make sense for employers. A variety offactors must be carefully weighed for employers to make a responsible decision that isbest for their bottom line and people. Organizations that are committed to supporting employees’ health and wellbeing mayfind the cost does not align with their return on investment. Employers who choose notto provide coverage can work with a health expert to build a wellbeing program thatachieves their goals. Ultimately, employers should be prepared as the decision to coveror not will impact businesses across the United States in the upcoming years.ConclusionS E C T I O N 5 : C O N C L U S I O NFor more information and to discuss a customized approach for your company,contact your OneDigital Advisor. Discover additional strategies to support yourbusiness and employees at OneDigital.
PAGE 13Shira Wilensky, OneDigital Director of Engagement and Education Mrigank Kothyari, OneDigital Wellbeing Specialist Richard Lo, OneDigital Director of Clinical Services Nauman Shaikh, OneDigital VP of AnalyticsAmber Jamison, OneDigital Clinical Services ManagerContributorsSECTION 5: CONCLUSIONAbout OneDigital OneDigital’s team of fierce advocates helps businesses and individuals achieve their aspirations of health,success, and financial security. Our insurance financial servies and HR platform provide personalized, tech-enabled solutions for a contemporary work-life experience. Founded in 2000 and headquartered in Atlana,OneDigital maintains offices in most major markets across the nation. For more information, visit onedigital.com
W W W . O N E D I G I T A L . C O MGLP-1 Class Drugs:To Cover or Not?Insights to Inform Decision-MakingA O N E D I G I T A L W H I T E P A P E R