U.S. employers plan to cut GLP-1 obesity drug coverage as usage lifts benefit costs

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U.S. GLP-1 drug coverage plans

Highlights

About 10% of employers currently covering GLP-1 drugs for weight loss plan to end coverage in 2027, with Mercer reporting 5% of large employers making similar decisions.
Novo's Wegovy and Lilly's Foundayo pills launched in 2024 at $149 per month, broadening patient access but intensifying employer cost pressure as unit prices fall but overall usage rises.
Cigna will cease GLP-1 coverage for its employees in July 2024, reflecting a trend among employers stepping back from benefit coverage amid lack of equivalent PBM savings.

Employer benefit changes take shape for 2027

As reported by Reuters, employer surveys show a share of companies that currently cover GLP-1 drugs for weight loss plan to drop that benefit in 2027 as more workers begin using the medicines. The Business Group on Health said about 10% of employers that now provide such coverage expect to end it, while benefits consultancy Mercer said 5% of large employers, defined as those with more than 500 workers, plan to do the same.

Mercer said 44% of companies with more than 500 employees cover the drugs for obesity, while Business Group on Health data show 67% of large employers cover GLP-1s in 2026. Cigna is also ceasing coverage of the weight-loss treatments for its own employees effective July, after telling staff they could buy the medicines elsewhere.

That shift comes even as drugmakers widen access through lower-cost direct channels. Newer weight-loss pills, along with injectable medicines from Novo and Lilly, are available through the companies' own websites at discounted prices, helped by a deal with the Trump administration for its site TrumpRx.gov.

Oral drugs broaden access but sustain cost pressure

In January, Novo launched the Wegovy pill and Lilly began selling its Foundayo pill in April, with both starting at about $149 per month. Lauren Remspecher, a director at Purchaser Business Group on Health, said many employers remain concerned that their pharmacy benefit manager arrangements are not delivering savings comparable to what cash-paying consumers can get directly.

Industry experts say demand for the medicines is increasing this year because oral options are attracting patients who have never previously used GLP-1 drugs. Employers are also seeing more patients stay on the medicines for longer periods and a wider eligible population than with other treatments.

Foundayo and Wegovy have been shown to reduce weight by 11% and 14%, respectively, less than injectable versions but still appealing for patients who want to avoid needles. Louis Zollo, a pharmacy practice leader at Segal, said unit costs are falling but the patient population keeps expanding, while Aon said it is seeing injectable users shift to pills and expects GLP-1 coverage to decline next year. Dan Mendelson, CEO of Morgan Health, said the pills are set to lower individual treatment costs this year, but continued market growth means the category remains a major cost driver for employers.

In our earlier article on congressional healthcare transparency proposals, we covered how U.S. lawmakers are reviewing bills that would require clearer, more usable pricing data before treatment. We noted that the measures also target disclosure of prior authorization and claim denial rates, aiming to help employers and patients compare costs and reduce surprise billing as part of broader cost-control efforts.

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