New GLP-1 pills could increase consumer demand for these popular weight loss drugs. But this could also be bad news for employees who want to cover costs through employer-sponsored health insurance plans.
Novo Nordisk, the maker of Wegobee, launched a GLP-1 pill for weight loss in early January, and Eli Lilly’s pill Foundayo began shipping in April. Many industry watchers had hoped that oral equivalents would be economically more favorable, but for employers who offer them through insurance, their cost is about the same as injectables. This, coupled with the fact that more people are likely to be interested in pills rather than injections, is giving employers hesitation. Remarkably, a Business Group on Health survey conducted earlier this year found that 87% of employers expect demand for GLP-1 to increase due to the availability of oral medications, while only 9% expect prices to decline.
By 2025, nearly half of large employers will have applied GLP-1 drugs approved for weight loss, Mercer said. However, the costs are becoming prohibitive. In NFP’s most recent annual employer survey, 51% of employers cited GLP-1 as the number one driver of rising prescription drug costs. “Employers are arguing that rising pharmacy costs are unsustainable,” said Nick Conway, president of Rx Solutions at NFP, a global benefits consultancy.
The cost of obesity drugs, with list prices ranging from $1,000 to $1,350 per month before insurance, is a major barrier for many patients who could benefit from significant weight loss and reduced potential for related health problems. Employers generally don’t pay list prices for employee coverage, but the Institute for Clinical Economic Review estimates that even after various discounts, plan sponsors can still pay a net price of about $569 to $664 per employee per month, a hefty bill.
All of this helps explain why breakthrough advances in weight loss drugs do not impact a company’s GLP-1 coverage in a way that benefits employees.
Concerns about initial costs, lack of long-term benefits
There’s no denying that employees want access to weight loss drugs at lower prices. NFP’s report found that 29% of employees are willing to change employers to take advantage of GLP-1 benefits. “These are very important options that employees are looking for in the workplace,” Conway said.
Employers know there is a demand for these medicines. But costs are rising, and many of the benefits for employees and employers are long-term. Raymond Brown, Mercer’s North American clinical pharmacy leader, said that while companies “want their employees to be as healthy as possible,” they don’t necessarily have the appetite or ability to absorb such high bills.
Ben Varner, clinical pharmacy leader at insurance brokerage Brown & Brown, said many companies are concerned that high upfront costs will cause people to stop taking the drug, eliminating long-term benefits. When you stop these drugs, you tend to regain the weight you lost. Employers are concerned about employees being engaged and spending a lot of money without knowing they will reap the long-term health benefits, Berner said.
Whether using pills or injectables, employers are still concerned about whether employees are committed to using the drug long-term. Berner added that its availability is not necessarily economically advantageous for employers, given that the oral version of GLP-1 does not have a significant price difference compared to the injectable version.
Despite employee demand, companies are considering ways to adjust or eliminate coverage.
A recent Mercer study found that employers will eliminate GLP-1 weight loss drug coverage in 2026, with further reductions being considered in 2027. Among employers with 500 or more employees, 6% plan to discontinue coverage in 2026, and 5% are actively considering discontinuing coverage in 2027, the survey found.
A survey by the Business Group on Health-Related Issues found that 10% of companies that have applied GLP-1 for weight management are unlikely or very unlikely to continue to do so in 2027 due to cost reasons, according to Magda Rusinowski, vice president of the nonprofit organization Representing Employers’ Views on Health-Related Issues.
Many companies are also tightening restrictions on employees’ ability to obtain qualifications. For example, many companies require a BMI of 30 or higher if you have a weight-related medical condition, or 27 or higher, and some now require a BMI of 35 or higher to qualify, said Eileen Pinkay, national pharmacy practice leader at benefits and human resources consulting firm Segal. Other companies only cover medications for people with diabetes or have stricter behavioral management requirements, she added.
Some employer plans may not offer pills at all
GLP-1 tablets cost essentially the same as injectables, but trials have shown they are less effective at weight loss.
Jeff Levin Schertz, WTW’s population health leader, said some employers may not list them as covered drugs. This depends on whether the pharmacy benefits manager charges a fee for not providing the pills or whether the PBM prevents employers who do not provide the pills from being eligible for other rebates. “It’s still too early. We don’t know what will actually happen,” Levin Schertz said.
Some employers are looking for lower-cost options for their employees. For example, Berner said, employers may reimburse workers through health reimbursement arrangements (HRAs), which are employer-funded plans that reimburse employees’ medical expenses.
Employers can also provide access to employees through third-party weight management programs instead of traditional pharmacy benefit programs. For example, Lilly has relationships with more than 15 independent program administrators, including 9amHealth, GoodRx, and Goodpath, to provide tailored obesity coverage options for employers. Novo Nordisk offers a similar employer program.
Some employers offer GLP-1 coverage for weight management through direct-to-consumer programs. These can be higher than an employee’s standard insurance copay of $25, but are still generally lower than if the employer pays for the drug through a pharmacy benefits manager. Berner said employers can also subsidize some or all of a manufacturer’s monthly prescription costs.
Oral GLP-1 drugs for weight loss, specifically Wegovy and Foundayo, are available for direct-to-consumer purchase at cash prices starting at $149 per month for the lowest doses. For injectables, uninsured people may pay a starting price of $299 per month for Zepbound and $199 per month for Wegovy, but of course, no one keeps up with the first dose, so the actual monthly cost is much higher.
The main reason for the high cost of weight loss drugs is that there are only two major pharmaceutical companies currently manufacturing this drug, limiting your options. This situation is expected to change over time, increasing competition and lowering prices, but that will take at least a year, Berner said.
Meanwhile, the federal government has announced efforts to lower the cost of GLP-1 drugs, with GLP-1 scheduled to be available through Medicare for as low as $50 starting July 1, and other drug options expected to come to market, eventually driving prices down even further.
“The net price of these drugs has fallen and I think there will continue to be downward pressure, especially as drugs from other manufacturers are approved. We expect that to continue to drive prices down,” Levin-Schartz said.
The bad news is that consumers will continue to pay high rates for some time to come, and employers are likely to remain cautious about coverage. “Eventually prices will come down, but not yet,” Pinkay said.
