“I can't think of a time where I've seen so many [vendors] come out of the woodwork of managing this or companies that had nothing to do with this space and now all of a sudden want to jump in,” said Seth Friedman, leader of the pharmacy and health plan services practice at the insurance brokerage Gallagher.
Employers seeking solutions to control spending on treatments for cancers, genetic diseases, mental health conditions and other diseases isn't new.
But the explosion of interest in GLP-1s such as Novo Nordisk's Wegovy and Saxenda, their exorbitant costs, and the number of people who meet FDA guidelines to take them is unmatched, said Paul Fronstin, director of health benefits research at the Employee Benefit Research Institute.
“There are only about 100,000 people in the U.S. with sickle cell disease, which most employers are never going to see somebody with, let alone incur the claim for gene therapy,” Fronstin said, whereas “Some employers might have 100,000 people who are eligible for [GLP-1] medications.”
The potential market for GLP-1s is huge. While KFF found 6% of U.S. adults were using a GLP-1 in May, the healthcare research institution reported that 49.3 million people, amounting to 42% of those with employer-sponsored insurance, may be eligible for the medications based on FDA indications.
“It is the top-of-mind issue right now,” Reagan said.
What employers want from vendors
Two-thirds of large employers cover GLP-1s for obesity and more are considering it over the next few years, according to a Business Group on Health survey. Employers are learning from one another about the most effective approaches and finding they can’t do this alone.
“We started hearing stories about customers that were blowing through pharmacy budgets in the middle of the year, creating 50% year-over-year increases in pharmacy costs,” said Dr. Jeff Jacques, chief medical officer at Personify Health, which administers benefit programs for employers.
To help employers manage skyrocketing costs, Personify Health expanded its weight management program in July to incorporate GLP-1-trained coaches and individualized medication management plans. Demand is high, said Jacques, who estimated he had conversations with seven prospective and existing customers in one recent week.
Employers are partnering with vendors, which typically charge per member, per month fees, to oversee utilization management, limit GLP-1 prescribers to physicians trained to treat obesity, help employees manage side effects, promote fitness and nutrition, and potentially transition off the drugs over time.
Businesses are taking requests for proposals, evaluating market options, engaging with consultants, considering pricing and assessing services with an eye on patient engagement and clinical oversight, said Ellen Kelsay, president and CEO of the Business Group on Health, which represents large employers including American Express, Morgan Stanley and Nestle.
“Many employers would like to keep them in their toolbox of offerings. It's just the cost is a challenge, and then making sure the most appropriate patients are on them,” Kelsay said.
As more employers look for ways to expand coverage in a cost-effective manner, other payers have scaled back offerings due to financial constraints. The health plan for North Carolina state employees dropped GLP-1 coverage for weight loss in April. Blue Cross Blue Shield of Michigan is cutting GLP-1 coverage for fully insured large group plans next year.
'Jury is still out’
Employers offering access to GLP-1s for weight loss are playing the long game. It remains to be seen whether these blockbuster medications and related partnerships will produce cost savings over time by making workers healthier.
“The jury is still out whether these programs will truly be a value-add and effective or just additive costs,” Reagan said. Early adopters began launching partnerships with vendors at the beginning of this year, and it could take 12 months before measurable health outcomes begin to materialize, she said.
Employers are hoping additional oversight and education will ensure the right people get access and adhere to the medication regimen. They're also looking for reduced spending in other areas, such as fewer complications from diabetes or cardiovascular disease, to balance the new costs and generate a return on investment, Fronstin said.
Vendors are also thinking ahead about their additional opportunities.
Digital health company Omada Health, which launched a GLP-1 support initiative last year to provide coaching, manage side effects and administer coverage policies, is expanding its program early next year to add musculoskeletal support to prevent reductions in lean body mass, including muscle, said Wei-Li Shao, president of Omada Health.
In addition, Good Measures, which started as a diabetes management company before expanding into weight loss, may consider launching a tapering program to effectively wean members off the pricey medications as more research unfolds, said Dr. Jennifer Chambers, chief medical officer of Good Measures.
“The overwhelming sentiment is that there is a negative ROI on spending money on GLP-1s, and that's the crux of what we're trying to solve,” said Brandon Newman, CEO of healthcare data analytics company Xevant, which launched a GLP-1 support program for employers with telehealth platform Ivim Health in August.
