Evaluating the risk-reward coverage of Ozempic and other GLP-1 drugs

Tyler Zalucki, Kendra Griffith

February 20, 2024

A growing concern that is impacting employer-sponsored health plans worldwide is the rising obesity rates and their associated costs. Obesity has become a significant burden on health care budgets, affecting employers year after year. Given that a quarter of employers acknowledge obesity as the primary driver of overall health care costs1, it becomes crucial to explore the inclusion of in-demand GLP-1 medications like Ozempic in health insurance offerings.

woman measuring her waist with a measuring tape in the living room at home.

What are GLP-1 medications?

GLP-1 medications are a class of drug that was historically used to treat type 2 diabetes mellitus (T2DM) but is now used as a popular treatment for weight loss. They work by slowing down food in the digestive tract and reducing the brain’s stimulus for more food2.

In recent years, three major GLP-1 medications, namely Ozempic, Wegovy, and Mounjaro, have gained significant traction due to their notable effectiveness. Additionally, the U.S. Food and Drug Administration (FDA) recently approved Zepbound by Eli-Lilly for weight loss3.

Increased GLP-1 prescriptions

As of 2023, there has been a significant increase in prescription rates. Both individuals with and without a documented medical history of T2DM or obesity are now obtaining approvals and prescriptions for these drugs.

Data collected by research company, Truveta from January 2020 to April 2023, showed that over 120,000 patients were prescribed these medications for the first time4. Half of the participants in this study exhibited medical records documenting either T2DM, a history of a body mass index (BMI) exceeding 27, or obesity. Patients with these medical records were classified as, “On-label,” and those without were, “Off-label.” The results showed that 56% of those who received treatment for T2DM were off-label. On the other hand, 81% of those who received treatment for weight loss were on-label.

girl using scales near measuring tape on wooden floor, closeup

Covering weight-loss drugs in employee health care plans

As medical advancements continue to redefine the landscape of health care, employers, insurers, and health care providers find themselves at a critical juncture, evaluating the intricate balance between rewards and risks associated with the inclusion of GLP-1 treatments in health care plans. Stakeholders must navigate a complex terrain of considerations, spanning efficacy, safety, cost-effectiveness, and broader implications for population health.

Benefits of including weight-loss coverage

With the prevalence of metabolic disorders escalating globally, studies provided by the Centers for Disease Control and Prevention (CDC) show that health care costs for individuals with obesity are nearly $2,000 higher than those with a healthy body weight 6. That said, including weight loss treatment in employee benefits packages would most likely be well-received. In fact, a recent study revealed that 77% of human resource (HR) decision-makers agree that GLP-1 coverage would make employees feel they have a better health insurance package5.

Encouragingly, the American Medical Association (AMA) has called for insurers to fully cover obesity treatment drugs7. On November 14, 2023, the AMA passed a resolution supporting, “Health insurance coverage parity for evidence-based treatment of obesity, including FDA-approved medications without exclusions or additional carve-outs.” This declaration brings optimism that both private insurers and the federal government will work together to alleviate the cost of GLP-1 as an obesity treatment, recognizing the significant health risks associated with untreated obesity.

Drawbacks of including weight-loss coverage

On the other hand, however, employers are questioning whether they should restrict the usage or cost share of these drugs. Initially, coverage for obesity treatment was excluded by many employers due to concerns about the significant costs of the drug class and off-label prescriptions.

Currently, we see some Pharmacy Benefit Manager (PBM) plans covering Ozempic as an approved treatment for type 2 diabetes, while Wegovy and other comparable drugs are specifically prescribed for weight loss. Depending on the medical formulary, the standard offering could exclude all weight loss drugs.

Additionally, GLP-1s typically run between $900-$1,300 monthly to fill. In 2023, GLP-1 drugs made up 6.9% of employer’s annual claims, according to the International Foundation of Employee Benefit Plans8 (IFEBP). An American Diabetes Association study indicates that people diagnosed with diabetes account for 25% of health care dollars spent in the United States and that medical costs for people living with diabetes increased by 35% over the past 10 years9.

As the market shifts, we at Marsh McLennan Agency (MMA) are seeing insurers create solutions for excluded weight loss drugs. Carrier underwriting will indicate that employers can include medications with a “weight loss drug” rider. However, the typical cost of this rider is a 3-5% increase in medical premium rates. Cost control strategies will be a critical component of employer coverage, as we have seen in other benefit formulations in the past, such as fertility treatment.

Another crucial consideration is patient adherence and utilization. If a patient stops taking GLP-1 medications within a year, they may regain some, if not all, of the lost weight. GLP-1 drugs are not intended to be a silver bullet; they work best when combined with nutrition, increased exercise, and lifestyle changes. Therefore, the integration of care and a strong relationship with physicians are vital components to additionally incorporate into the population health strategy of employer-sponsored health plans.

Considering all these factors, employers are encouraged to evaluate GLP-1 coverage opportunities in their health plans. However, it is essential to understand the direct impact on your in-force PBM contract and ongoing costs before making any changes around eligibility or step therapy.

Overweight man getting waist measured by doctor

How Can Marsh McLennan Agency Help?

To ensure you are well informed about the initial, ongoing, and potential costs to your business and pharmacy risk management strategy, Marsh McLennan is available for a consultation, reach out directly to Tyler Zalucki and Kendra Griffith at [email protected] and [email protected].



  1. “Employee Benefits Survey: 2022 Results,” International Foundational of Employee Benefit Plans, accessed January 26, 2024, https://ifebp.org/store/employee-benefits-survey/Pages/default.aspx
  1. “As anti-obesity drug prices soar, how employers can navigate difficult choices,” Human Resource Executive, accessed January 26, 2024, https://hrexecutive.com/as-anti-obesity-drug-prices-soar-how-employers-can-navigate-difficult-choices/
  1. “US obesity docs expect Lilly weight-loss drug to show similar heart benefit as Wegovy,” Reuters, Accessed January 26, 2024, https://www.reuters.com/business/healthcare-pharmaceuticals/us-obesity-docs-expect-lilly-weight-loss-drug-show-similar-heart-benefit-wegovy-2023-12-01/
  1. “Ozempic, Wegovy, and Mounjaro: On- and off-label prescribing trends,” Truveta, accessed January 26, 2024, https://www.truveta.com/blog/research/ozempic-wegovy-and-mounjaro/
  1. “Can we afford not to pay for obesity care?” BenefitsPRO, Accessed January 26, 2024, https://www.benefitspro.com/2023/11/13/can-we-afford-not-to-pay-for-obesity-care/
  1. “Adult Obesity Facts,” Centers for Disease Control and Prevention, accessed January 29, 2023, https://www.cdc.gov/obesity/data/adult.html
  1. “American Medical Association calls for insurers to cover weight loss drugs,” The Hill, accessed January 26, 2024, https://thehill.com/policy/healthcare/4309838-american-medical-association-coverage-weight-loss-drugs-wegovy-ozempic/
  1. Here’s How Much GLP-1 Drugs for Weight Loss Are Amounting To in Employer Claims, SHRM, accessed January 27, 2024, https://www.shrm.org/topics-tools/news/benefits-compensation/how-much-glp1-drugs-for-weight-loss-costing-employers-international-foundation-ozempic
  2. New American Diabetes Association Report Finds Annual Costs of Diabetes to be $412.9 Billion, Diabetes.org, accessed January 27, 2024, https://diabetes.org/newsroom/press-releases/new-american-diabetes-association-report-finds-annual-costs-diabetes-be