Employees want weight loss drugs Ozempic and Wegovy. Can employers afford them?

A wave of interest in trending weight loss drugs, fueled by headline-dominating celebrity slim-downs, is causing some employers to see their healthcare costs skyrocket. Now, leaders are turning to benefit providers, advisers and innovators to help them quell costs and offer alternative solutions to treat obesity and manage weight.

The medications in question, including Ozempic, Wegovy and Mounjaro, are part of a class of drugs known as GLP-1s, which are used to treat diabetes Man prepares semaglitude injection for weight loss and diabetes controland can also help drive weight loss, in some cases supporting the loss of 15% (or more) of body weight.

“The results are really starting to approach what we see with bariatric surgery,” says Dr. Linda Anegawa, an obesity medicine specialist and the chief medical officer of weight loss app Noom.

She stresses that for those in need of medicinal intervention, these drugs are incredibly valuable — but cautions that the abuse and misuse of GLP-1s, fueled by pop-culture awareness and affordable and untested off-brand options, is a troubling trend.

And yet, when prescribed appropriately, the impact of achieving surgical results with medication cannot be underestimated, she says. But neither can the cost.

“For employers who are paying for healthcare, bariatric surgery is a one-time sunk cost,” Dr. Anegawa says. “GLP-1s can be taken for years — and all research shows that if you stop the medication, employees will gain the weight back. So employers are terrified, and looking to get the most bang for their buck.”

According to the Centers for Disease Control, roughly 40% of American adults are obese, and studies estimate that the 2019 annual medical cost of obesity was nearly $173 billion. Per person, medical costs are nearly $1,900 higher per year for obese adults as compared to their non-obese peers. Now, as GLP-1s have captured the attention of consumers, those costs may only increase.

Sarah Jones Simmer is the CEO of Found, a weight management platform that relies on coaching, clinical care and, when needed, medication. Toward the end of 2022, employers started approaching the direct-to-consumer business, stressing about their rising costs.

“Employers are seeing a dramatic increase in things like Ozempic and Wegovy, and they’re trying to figure out how to provide care — especially when it’s care that could potentially change someone’s life and help them avoid diabetes or musculoskeletal challenges,” Jones Simmer says, noting that those very illnesses and ailments also drive claims and downstream costs for employers. “But [employers] also recognize they can’t just provide them to everyone without some sort of layer of clinical appropriateness and having an eye on the costs associated with it.”

Some employers told Found that Ozempic had become their highest cost drug; one 5,000-employee organization saw more than $100,000 in Ozempic costs in a single month. Others were spotting a nearly 4x increase in year-over-year GLP-1 utilization.

“The people who are footing the bill via insurance are recognizing that they cannot just let everyone who wants access to have them covered by insurance,” Jones Simmer says. “They’re $17,000 a year on average, and they have to be taken in perpetuity. But no employer wants to say, ‘you can’t have it.’ But they do need to be able to point employees in a direction that could help more appropriately manage care and access.”

Those conversations led Jones Simmer and her team to launch Found for Business, entering a space that has quickly become crowded as employers seek better ways to support their populations. Noom for Work, which launched last fall, also leverages technology and human coaching to help clients’ employees shift their lifestyle decisions to be healthier. This spring, Teladoc Health announced the launch of its Provider-Based Care for weight loss and pre-diabetes, giving Teladoc members access to a physician to guide care, coaching and medication.

All of these programs recognize obesity as a chronic condition — a necessary mindset shift in how the medical community and consumers think about weight.

“The consumer has always been told that weight gain is their fault, and the medical establishment played a big role in that, unfortunately,” Dr. Anegawa says. “But as we trend toward classifying obesity as a chronic disease, that is causing a shift in the public’s perception of treatment options. In the past, people were hellbent on grapefruit cleansing and keto diets, but now people realize this isn’t about a magic fix, this is about taking unique biological needs into consideration.”

And just as the embrace of digital care has shaken the stigma off of mental health care in recent years, leaders in this space are hopeful that holistic digital support and access can do the same for weight management.

“When you can access care comfortably in the palm of your hand, you don’t have to feel the stigma associated with walking underneath a sign that says ‘weight management center,'” Jones Simmer says, noting that digital access and support can help keep costs down while providing avenues to more personalized care and interventions.

Kelly Bliss, president of U.S. group health at Teladoc, agrees that weight management and obesity support must be approached with a full toolbox of solutions. Like Jones Simmer, she has heard from employer clients that Ozempic and Wegovy are fast entering their top 10 spend, and she’s working to help them get proactive about a sustainable plan, for their bottom line and for their employees’ health. The key, Bliss says, is to support sustained change and weight loss when an individual begins to taper off of medication, rather than seeing these drugs as a lifetime solution.

“You can’t just have a single intervention and expect a broad impact on chronic disease,” says Bliss. “If you’re deploying a GLP-1, you have to have it in concert with nutrition, logging, coaching, sleep management, stress management, and all those tools that surround learning and behavior change. We’re helping to educate our clients on what to do if and when they see these costs rise over the course of the next few quarters. We’re trying to ask: ‘What is your plan?'”

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