Some US employers to drop coverage of GLP-1 obesity drugs…

Some U.S. employers are considering dropping coverage for GLP-1 weight-loss drugs in 2027 due to an increase in usage, which is offsetting savings from lower prices. According to a survey, 10% of employers currently covering these drugs plan to discontinue coverage, with a Mercer report indicating 5% of large employers will also drop the coverage. Currently, 44% of large employers cover these drugs, while 67% will cover them in 2026. Cigna has already ceased coverage for its employees. The demand for these drugs has risen, especially with the introduction of oral options like Wegovy and Foundayo. Industry experts suggest that long-term use and a growing patient population are driving employer costs higher.

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A combination image shows an injection pen of Zepbound, Eli Lilly's weight loss drug, and boxes of Wegovy, made by Novo Nordisk

A combination image shows an injection pen of Zepbound, Eli Lilly's weight loss drug, and boxes of Wegovy, made by Novo Nordisk. REUTERS/Hollie Adams/Brendan McDermid/Combination/File Photo Purchase Licensing Rights, opens new tab

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Cigna Group

Eli Lilly and Co

Novo Nordisk A/S

NEW YORK, June 11 (Reuters) - Some employers are planning to drop coverage of GLP-1 drugs for weight loss next year as more people take the medications, counteracting some savings from lower prices for Novo Nordisk's (NOVOb.CO), opens new tab Wegovy and Eli Lilly's (LLY.N), opens new tab Zepbound and Foundayo.

About 10% of employers who now cover GLP-1 drugs for weight-loss said they planned to drop the ‌drugs in 2027, according to the Business Group on Health, a policy research group for large employers.

A second survey by benefits consultancy Mercer said 5% of large employers -- which it defines as employing over 500 people -- plan to drop coverage of the drugs in 2027.

Mercer said 44% of companies with more than 500 employees cover the drugs for obesity. Data from the Business Group on Health show 67% of large employers cover GLP-1s in 2026.

Health insurer Cigna (CI.N), opens new tab ceased coverage of the weight-loss treatments for ⁠its own employees effective July, Reuters first reported this month, saying they could buy the medicines elsewhere.

Newer pills for weight loss, as well as injections from Novo and Lilly, are available through the drugmakers' own websites at discounted prices, driven by a deal with the Trump administration for its site TrumpRx.gov.

In January, Novo launched the Wegovy pill and Lilly began selling its Foundayo pill in April, both of which start at about $149 per month.

Lauren Remspecher, a director at Purchaser Business Group on Health, said many employers are still concerned they are not seeing the same savings in their deals with pharmacy benefit managers -- industry middlemen who negotiate prices for large companies and health plans -- as customers who purchase directly and pay cash.

"One advantage of having the direct-to-consumer and some of the government-negotiated pricing more ‌transparent is ⁠that now employers can see how much more they're paying and where there is an opportunity for improvement," said Remspecher.

INCREASED DEMAND WITH THE PILLS

Demand for the drugs has increased this year due to the oral options, attracting people who have never before tried GLP-1s, which has kept employer costs high, according to five industry experts.

Several industry experts said employers are seeing people stay on GLP-1s long term and a larger pool of people eligible ⁠for the medications, when compared to other treatments.

Foundayo and Wegovy have been shown to reduce weight by 11% and 14%, respectively, less than with the injected drugs but preferable for patients who fear needles.

"Even though we have seen the unit cost come down, the patient population keeps growing," said ⁠Louis Zollo, a pharmacy practice leader at healthcare consultancy Segal.

Benefits consultancy Aon has observed injectable customers shifting to oral versions, as well as new GLP-1 patients choosing the pills. Aon said it too expects GLP-1 coverage to decrease next year.

Dan Mendelson, CEO of Morgan Health, ⁠a healthcare unit owned by JPMorgan, said the pills are set to push the cost of the individual treatments down this year.

“But every year there’s going to be market growth," he said. "There’s going to be more people taking these drugs, so on aggregate this still represents a major cost driver for employers."

Reporting by Amina Niasse; editing by Caroline Humer and Bill Berkrot

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Some US employers to drop coverage of GLP-1 obesity drugs in 2027 as use increases

INCREASED DEMAND WITH THE PILLS

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