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The injectable weight-loss drug Wegovy at New City Halstead Pharmacy in Chicago on April 24, 2024.
Scott Olson | Getty Images
Good morning! A survey found that more U.S. employers are covering a class of drugs called GLP-1s for weight loss.
Nearly one-third of U.S. employer health plans said they cover GLP-1 drugs such as Novo NordiskOzempic and Wegovy for both diabetes and weight loss, up from 26% last year.
GLP-1 weight-loss drugs also grew as a portion of employers' total annual medical claims spending, accounting for nearly 9% in 2024 compared to about 7% the year before.
That's according to the survey released Thursday by a nonprofit organization, the International Foundation for Employee Benefit Plans, which includes more than 33,000 member companies or public institutions. The survey was conducted in May of nearly 300 employer health plans in the United States
The increase in coverage is a win for patients, who often struggle to afford the steep $1,000 monthly prices for these drugs without insurance and other rebates. It's also good news for the manufacturers of these treatments, such as Novo Nordisk and Eli LillyWhich works to increase insurance coverage of medicines and their access to the patient in general.
Notably, most employee health plans and other insurance companies do not cover weight loss drugs, including GLP-1s such as Novo Nordisk's Wegovy and Eli Lilly's Zepbound. The federal Medicare program also does not pay for weight loss treatments unless they are approved and prescribed for another health condition.
GLP-1s for diabetes, such as Ozempic and Eli Lilly's Mounjaro, are often covered by plans.
Both weight-loss and diabetes medications have skyrocketed in popularity in the United States — attracting increasing interest from investors — to help people achieve significant weight loss over time. They work by mimicking one or more hormones produced in the intestines to suppress a person's appetite and regulate blood sugar.
About 57% of employer health plans said they only cover diabetes management medications, up from 49% in 2023, according to the survey.
But a large percentage — about 19% — said they were considering whether or not to cover the costs of losing weight.
“New survey data show that in the past six months, GLP-1 coverage has increased for both weight loss and diabetes,” Julie Stitch, vice president of content at the International Foundation for Employee Benefit Plans, said in a statement.
New regulatory approvals and clinical trials, coupled with growing demand for GLP-1 drugs in the United States, have contributed to broader coverage, Stitch said.
For example, Novo Nordisk's Wegovy has now been licensed in the US to reduce the risk of serious heart complications.
Insurance industry experts previously told CNBC that approval would not automatically translate into widespread insurance coverage for the weight-loss drug. At the very least, some plans will notice the new use of Wegovy and begin evaluating whether to cover the treatment when they next update their formularies, these experts said.
Novo Nordisk and Eli Lilly are also conducting a range of studies on their GLP-1 drugs in different patients. This includes people with chronic kidney disease, sleep apnea, and some fatty liver diseases.
But there's no doubt that drugs can put a strain on any health plan's budget.
According to the survey, about 85% of employers who cover GLP-1s rely “heavily” on requirements aimed at controlling costs.
This includes certain eligibility rules, such as requiring employees to have a certain body mass index, or BMI, to obtain coverage. It also includes “step therapy,” which requires its members to try other, less expensive medications or weight loss methods before using GLP-1.
Meanwhile, other insurance plans are withdrawing coverage for weight-loss drugs. Blue Cross Blue Shield of Michigan, the state's largest insurer, said it will begin eliminating coverage for various weight loss drugs next year.
There's also a bigger issue at hand, even as insurance coverage improves among employers: Novo Nordisk and Eli Lilly are struggling to provide adequate supplies of their treatments to meet demand. This is another part of the GLP-1 story that we will continue to monitor.
Feel free to send any tips, suggestions, story ideas and data to Annikakim at annikakim.constantino@nbcuni.com.
Latest healthcare technologies
About 25% of venture capital funds allocated to healthcare go toward companies that use AI, the report says
Hands, tablet and doctor with 3D image of the body, overlay and DNA research for medical innovation on the app. Medical man, nurse and mobile touch screen to write on anatomy study or 3D hologram experience in clinic
Jacob Wackerhausen | iStock | Getty Images
Healthcare companies that explore new uses for AI are scoring big with venture capital investors.
One in four healthcare investment dollars goes toward companies using AI, and deal activity in healthcare AI has grown twice as fast as AI deals in the technology industry as a whole, according to a recent report from Silicon Valley. The bank, now a division of First Citizens Bank.
The report stated that venture capital firms invested $7.2 billion in healthcare AI last year, and that the number is on track to reach $11.1 billion this year.
The report said that administrative applications of artificial intelligence in healthcare attract about 60% of funding. Clerical tasks such as paperwork place a significant burden on the healthcare sector, and contribute to physician burnout and staffing shortages.
More than 90% of doctors report feeling burned out on a regular basis, and 64% of those doctors said overwhelming administrative workloads are the main reason for that, according to a survey conducted by Athenahealth in February. The survey said that doctors spend an average of 15 hours per week outside their normal working hours to pursue administrative tasks.
In other words, administrative work is a big problem for the healthcare sector. Venture capital firms are particularly interested in them because they typically face less regulatory oversight than clinical decision support tools or patient-facing solutions, the SVB report said.
Although healthcare AI companies are expected to raise more money this year than they did last year, SVB said access to high-quality data and sufficient computing power to train models may be a barrier to adoption.
This is especially true for AI-powered patient diagnostic tools, which make up 52% of total investment in clinical solutions, according to the report. As of now, there is a “major gap” in access to the computing power and data needed to train a model that can accurately diagnose a patient.
“Companies that have access to data, partner with doctors and hospitals to leverage patient data, and partner with major technology companies are better suited to deploy AI at scale,” the report said.
Feel free to send any tips, suggestions, story ideas and pitches to Ashley at ashley.capoot@nbcuni.com.
