New GLP-1 drugs used for treating Type 2 diabetes and weight loss may be costly, but payer leaders say the expenses aren’t yet breaking the bank. While the drugs can cost over $10,000 per month without insurance, most payers cover diabetes treatments but not those for obesity. Executives and payer leaders have noted that GLP-1 use is mostly limited to diabetes care, and the management of these therapies may present a growth opportunity for pharmaceutical benefit managers. Payers emphasize advocacy and preserving tools to manage to spend while maintaining coverage for medical necessity.
The use of GLP-1 drugs to treat Type 2 diabetes and weight loss is becoming more prevalent, but the cost of these medications is not yet breaking the bank for payers. While the cost of drugs such as Ozempic, Trulicity, Victoza, Mounjaro, Wegovy, and Saxenda can exceed $10,000 per month without insurance coverage, most payers typically cover diabetes treatments but not those for obesity.
Executives and payer leaders have discussed their thoughts on the use and cost of these new drugs in investor calls held in April and May. They have generally expressed that most use of GLP-1 drugs is limited to diabetes care, while use for weight loss is still relatively low. Some executives see managing these expensive therapies as a growth opportunity for pharmaceutical benefit managers.
Brian Thompson, CEO of UnitedHealthcare, explained that the majority of GLP-1 use is for diabetes care, with on-label usage being well managed through authorization requirements. Pharmacy accounts for about 20% of the overall spend in any one therapeutic class, and GLP-1 use is less than 1% of that.
Andrew Witty, CEO of UnitedHealth Group, discussed the importance of innovation in weight management, particularly for patients with comorbidities such as diabetes. He emphasized the need to focus on the facts and reality of the marketplace and ensure that patients benefit from these medicines, with affordable pricing being a key element of their success.
David Joyner, president of pharmacy services at CVS Health, stressed the importance of advocacy and preserving the tools that PBMs have available to manage spend, such as driving competition to reduce costs for customers.
John Gallina, CFO of Elevance Health, clarified that GLP-1 drugs are used for both weight loss and diabetes, but payers typically do not cover drugs marketed for weight loss. Gallina emphasized the importance of ensuring that diabetes drugs are used for medical necessity and not for purposes other than what they are intended for.
David Cordani, CEO of the Cigna Group, discussed the positive contributions that GLP-1 drugs and treatment protocols have made for diabetic patients. Cigna has coverage within its formulary and has previously established value-based care arrangements with pharmaceutical manufacturers. Cordani acknowledged that employers have had a limited appetite to expand coverage beyond clinical diagnoses such as diabetes for certain lifestyle treatments. He sees the use of GLP-1 drugs as a growth opportunity within the Evernorth portfolio, with a natural hedge against cost pressures through their high-performing services space.
