Digital health companies are finding different ways to incorporate weight loss medications into their product offerings as the drugs become more popular.
Companies focused on diabetes and obesity such as Teladoc and Omada Health have embraced glucagon-like peptide-1 agonist drugs while dangling the prospect of lowered costs to their employer customers. These digital health companies are creating programs that cater to patients on GLP-1s, sometimes with the ultimate aim of helping them get off the drugs.
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“If you're a digital diabetes solution that doesn't have some way to integrate GLP-1s, you're behind the times,” said Caroline Pearson, executive director of the Peterson Health Technology Institute, a digital health research group.
For years digital health companies have made money selling digital diabetes and weight management tools to self-insured employers and payers. One of the sector’s early success stories, Livongo, rode interest in this space to an initial public offering in 2019 and was acquired by Teladoc for $18.5 billion in October 2020.
But virtual diabetes and weight management care changed when GLP-1 drug Wegovy was approved for weight loss in June 2021.
As the drugs' popularity reached new heights, it became an expensive item for employers to cover. PricewaterhouseCoopers' Health Research Institute analyzed claims data from Employers Health, a coalition that manages pharmacy benefits for employers with more than 1.6 million members, and found GLP-1 utilization nearly quadrupled from 2021 to 2023. This increased per-member costs from $8.99 to $23.16, PwC found.
Employers are now asking digital health companies such as Virta Health to help lower those costs. Virta, founded in 2015, operated for several years under a behavior change and nutrition-focused model without a specific product dedicated to patients on medications. In January, the company rolled out a GLP-1-focused program that works through an employer's pharmacy benefit manager to become a patient's GLP-1 prescriber.
Despite acting as a prescriber, Virta's move was more about getting patients off GLP-1s, said CEO Sami Inkinen. He said its employer customers were interested in a nutrition-first program that included support for GLP-1s.
"GLP-1s are here to stay," Inkinen said. "They are a useful tool in a toolkit, but I think all most employers and health plans are realizing that it's [just] a tool in a toolkit, and to use them responsibly, you have to have the appropriate strings attached."
Patients receive coverage for GLP-1s if they participate in Virta's program. The program uses a smartphone application and telehealth to incorporate diet, exercise and behavioral health and can help patients maintain weight loss after stopping the medications.
The high costs of GLP-1s are changing how employers view virtual diabetes and weight management programs, said Randa Deaton, vice president of purchaser engagement at Purchaser Business Group on Health, a coalition of 40 large employers such as Walmart, Microsoft and Salesforce. Deaton said digital health companies have sold weight loss programs for years but they're now using them to help manage GLP-1s.
“I think the biggest issue is that the cost is unsustainable, and we're seeing significantly increased utilization of the drugs," Deaton said. “Most employers want to provide weight management solutions for their employees and family members, but they want to make sure it's accompanied by evidence-based care and support programs such as these lifestyle interventions.”
Chronic care management and digital health company Omada Health introduced a GLP-1 companion tool in May 2023. The companion tool can work through PBMs to help employers match eligible patients to the drugs. Employees that are eligible may be required to enroll in Omada’s program and some employers require users to engage with the Omada app weekly. Engagements can include medication management lessons or engaging with a health coach, peer group or online community.
Omada CEO Sean Duffy said offering the companion tool can improve patients’ experiences and possibly get them off the costly drugs faster.
“When GLP[-1s] began to get their approvals, and employers started covering them, their costs just grew at an astronomical rate,” Duffy said.
Traditional telehealth companies are also adding GLP-1 tools to their product suite. In March 2024, Teladoc Health began to sell a GLP-1 companion program to employers and payers aiming to lower costs. While its providers do prescribe GLP-1s for some members, it also offers patients a medication adherence and behavior change program that's aimed at lowering overall costs for its employer and payer customers.
Digital tools aimed at weight loss and diabetes care have historically come with efficacy and cost concerns. In March 2024, Peterson Health Technology Institute released a study that found the majority of digital diabetes management tools were not cost effective and few demonstrated clinically relevant outcomes for patients.
Pearson is skeptical that GLP-1-tailored programs will make a difference. To get in the door, many digital health companies are pitching employers on reducing the number of employees that will take the drugs and shortening the duration of their time on the high-cost medications. It is unclear if frequent check-ins on a mobile application will save money or create better clinical outcomes, she said.
“I think that's a reasonable [argument] for medication adherence,” Pearson said. “It's hard for me to believe that there's clear cost savings there at the moment.”