By the start of next year, drug manufacturer Novo Nordisk has pledged to slash the price of popular GLP-1 drugs like Ozempic and Wegovy by about 50%. While the drugs, which are used to manage diabetes and weight loss, among other outcomes, will still have a list price of about $675 a month, broader efforts to gradually decrease costs, alongside sky-high employee interest, are prompting many employers to make the jump to coverage.

According to new research from the CHRO Association, about 60% of organizations surveyed cover GLP-1s for weight loss, to some extent.

“I do expect that number to grow,” says Ani Huang, president, Policy and Practice, at the CHRO Association and the CEO of the Center on Executive Compensation, “both because the demand from employees is so strong and because the cost is likely to go down.”

See also: GLP-1s: What’s fueling surging employee demand?

How practical design is changing the game for GLP-1 coverage

New research out this week from cardiometabolic care provider 9amHealth, based on 1,000 working-age Americans, found that 93% of those whose employers don’t cover GLP-1s for weight loss would take the drug if it was covered. Nearly 50% of those surveyed are currently taking the drug—a figure that has doubled in the last three years.

Huang says employers are focusing on “practical design” to balance this skyrocketing demand from employees with the realities of cost. For instance, many are drawing “sharper lines” between coverage, whether the drugs are used just for diabetes management, diagnosed obesity or elective weight loss, for instance.

In the CHRO Association’s research, 46% of those surveyed offer GLP-1 coverage for weight loss with specific eligibility criteria, while 13% cover the medications for weight loss with minimal restrictions. About one-quarter cover GLP-1s just for diabetes management.

As employers design their coverage plans, Huang says they are also increasingly paying “close attention” to how employees are using the drugs, persistence and discontinuation rates, and outcomes when the drugs are stopped.

“Some are building policies that emphasize ongoing clinical monitoring and long-term maintenance strategies,” she says, along with plan design that emphasizes support programs, given the research that GLP-1s for weight loss are most effective as part of a comprehensive strategy.

To continue to target lower costs, employers are eyeing alternative purchasing models and specialized obesity care vendors, Huang says, while continuing to pursue rebates and discounts and net cost transparency and pressing for tighter formulary management.

The efforts come as specialty pharmaceutical spending continues to be the primary driver of healthcare cost spikes. Recent research from WTW found that GLP-1s account for more than 20% of employers’ pharmaceutical spend. Meanwhile, Aon reports that prescription drug costs comprise about one-third of employers’ overall healthcare spend, expected to spike about 9.5% this year.

The landscape is pushing employers toward broader “plan design changes and cost-sharing mechanisms to manage spending,” according to the CHRO Association research.

For instance, 86% are offerings high-deductible health plans with HSAs, while nearly two-thirds are increasing employee cost-sharing, including through co-pays, co-insurance and deductibles. Self- and level-funding arrangements, narrow or tiered pharmacy networks, and value-based care arrangements are the least common cost-control strategies.

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