GLP-1 drug coverage for obesity making inroads with large employers: Mercer

Posted by News Room 20 November 2024

Dive Brief:

  • The average cost of employer-sponsored health insurance climbed to $16,501 per employee in 2024, up 5% from the previous year, according to results from Mercer’s 2024 National Survey of Employer-Sponsored Health Plans released Wednesday. Employers expect it to climb another 6% in 2025, Mercer said. 
  • That increase is partially driven by prescription drug cost, which is the fastest-growing cost segment, according to a news release. Pharmacy benefit cost increased 7.7% this year, after rising 8.4% in 2023, propelled by greater use of GLP-1 drugs for diabetes and weight loss, the survey of 2,194 employers found.
  • GLP-1s are nearly universally covered for diabetes but not yet for obesity treatment, although that share is growing. In 2024, coverage for obesity drugs increased to 44% among employers with 500 or more workers, compared to 41% last year, and 64% among the largest companies, up from 56% the previous year, according to the release.

Dive Insight:

“Employers doubled down on strategies to manage cost growth while finding ways to improve key benefits to support employees and their families in 2024, including expanded coverage for GLP-1 medications and fertility treatments,” Ed Lehman, Mercer’s U.S. health leader, said in a statement. 

Tracy Watts, Mercer’s national leader for U.S. health policy, said GLP-1s could “turn the tide on the obesity epidemic and positively impact downstream medical costs.”

“Cost is clearly a concern, and employers are adding authorization requirements to ensure the medications are used by members who will benefit the most,” Watts said.

Drug prices are among the biggest threats to healthcare affordability, according to 99% of the nearly 190 employers surveyed recently by the National Alliance of Healthcare Purchaser Coalitions. 

In the NAHPC survey, about 46% of employers said they cover GLP-1s for obesity, and another 21% said they are debating doing so in the next three years. Of those companies either offering or considering GLP-1 coverage for obesity treatment, many said they might take steps to manage costs, such as limiting access to those with chronic conditions or a certain body-mass index.