Understanding GLP-1 Trends and Their Impact on Pharmacy Benefits Plans

GLP-1s, originally approved for the treatment of Type 2 diabetes, have become a hot topic in both healthcare and popular culture. Known for their effectiveness in managing blood sugar levels, these drugs – such as semaglutide (branded as Ozempic or Wegovy) and tirzepatide (branded as Mounjaro or Zepbound) – have expanded their footprint, now approved for combating obesity and certain cardiovascular conditions. Their escalating popularity, fueled by celebrity endorsements, social media trends, and direct-to-consumer advertising, has led to a surge in prescriptions. However, the rising demand comes with significant financial implications for employers and pharmacy benefits plans.

The Growth of GLP-1 Prescriptions

The numbers speak for themselves. Nearly 700,000 new GLP-1 prescriptions were issued in February 2024 alone, representing an 181% increase compared to two years prior. This rise is driven partly by alarming obesity statistics. Currently, 2 out of 5 U.S. adults, or approximately 100 million individuals, are considered obese. Looking ahead, nearly half of U.S. adults (48.9%) are projected to meet the criteria for obesity by 2030.

With obesity being a growing public health crisis, GLP-1s are increasingly prescribed for weight loss, despite their initial role in diabetes management. Yet, for benefits advisors, this trend raises critical questions about sustainability, clinical oversight, and the cost impact on pharmacy plans.

Implications for Pharmacy Benefits Plans

Though GLP-1s are seen as a game-changer in weight management, they come at a steep price. Many employers have opted not to cover these medications for weight loss – about 50% of employers in the RxBenefits book of business have excluded GLP-1 coverage for this use. However, claims indicate that up to 40% of GLP-1s are prescribed off-label, which could result in significant plan costs without careful monitoring and oversight.

The challenge lies in balancing clinical efficacy and cost efficiency. Employers must evaluate whether including GLP-1s in their plan design aligns with their broader benefits strategy, especially as demand continues to rise. Off-label use adds another layer of complexity, underlining the need for robust clinical review and tighter controls to mitigate unnecessary expenses.

Future Market Trends

The financial implications of GLP-1s are set to grow as manufacturers expand the scope of these drugs across multiple conditions. Developers are seeking approval for additional indications, such as Alzheimer’s disease, psoriasis, substance abuse, and NASH/MASH (nonalcoholic steatohepatitis/metabolic associated steatohepatitis). In December 2024, Zepbound was approved for obstructive sleep apnea (OSA), and in January 2025, Ozempic was approved for risks related to cardiovascular disease (CVD) and chronic kidney disease (CKD). Since many of these conditions are linked to diabetes or obesity, this could enable drugmakers to work around payers’ plan designs that choose not to cover weight-loss treatments.

Additionally, proposed legislation could reshape the coverage landscape. A new rule aims to require Medicare and Medicaid to cover GLP-1 drugs for obesity. By focusing on obesity as a chronic disease, rather than just weight loss, the proposed regulation bypasses the need for legislative changes to the broader Medicare prescription drug program. Should this rule pass, pharmacy benefit managers (PBMs) might follow suit by incorporating similar changes in commercial plans.

Compounding and New Pipeline Agents

Initial shortages of GLP-1s like semaglutide and tirzepatide have led to increased interest in compounding as a potential lower-cost solution for plan sponsors. While this could reduce some immediate expenses, it also risks increasing demand and utilization, potentially driving up overall costs.

The pipeline for new GLP-1 agents is robust, with over 40 drugs in development and four currently in phase III clinical trials. This influx of competition could theoretically lower prices, but historically, newer agents entering the market have not always resulted in reduced costs. Benefits advisors will need to closely monitor market competition and pricing trends in the coming years.

Managing Uncertainty and Emerging Risks

Despite their promise, the long-term impact of GLP-1s remains uncertain. Emerging studies have raised concerns about potential side effects, including a reported link between Ozempic and a rare eye disorder. The European Union is currently investigating this issue.

Furthermore, a December 2024 survey revealed that 78% of healthcare providers report that Hollywood, celebrities, and influencers’ embrace of GLP-1s for weight loss has harmed patients’ realistic expectations of the medication. This underscores the need for evidence-based decisions when it comes to GLP-1 coverage and utilization.

Key Takeaways for Benefits Advisors

The rise of GLP-1s presents a double-edged sword for employers and benefits advisors. On the one hand, these drugs show promise in addressing obesity and its related comorbidities, potentially reducing long-term healthcare costs. On the other hand, high prices, off-label usage, and uncertain long-term outcomes pose significant challenges for plan management.

Here’s how benefits advisors can prepare to address these challenges:

Evaluate Plan Design: Decide whether to include coverage for GLP-1s based on clinical evidence and cost-effectiveness. Establish robust oversight to monitor off-label usage.
Monitor Industry Trends: Stay updated on new drug approvals, pricing strategies, and potential legislative changes that may impact plan costs.
Educate Employers: Help employers understand both the clinical benefits and financial implications of GLP-1s, ensuring informed decision-making.
Encourage Evidence-Based Use: Advocate for responsible prescribing patterns and realistic patient expectations through education and clinical review processes.

By strategically addressing these considerations, benefits advisors can help employers strike the right balance between providing innovative healthcare solutions and managing plan sustainability. GLP-1s represent a new frontier in managing chronic diseases, but navigating their complexities will require a thoughtful, informed approach.