Surveys show some large employers plan to stop covering GLP-1 drugs for obesity next year as expanded use of Wegovy, Zepbound and Foundayo offsets savings from lower prices.
By yourNEWS Media Newsroom
Some U.S. employers are preparing to drop coverage of GLP-1 weight-loss drugs in 2027 as rising demand continues to strain health benefit budgets, despite lower prices for some newer obesity medications.
The medications, including Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound and Foundayo, have become increasingly popular for weight loss. But employers say the growing number of people using the drugs is offsetting some savings from lower prices and new direct-to-consumer options.
About 10% of employers that currently cover GLP-1 drugs for weight loss said they plan to stop covering the medications in 2027, according to the Business Group on Health, a policy research organization representing large employers.
A separate survey by benefits consultancy Mercer found that 5% of large employers, defined as companies with more than 500 workers, plan to drop coverage next year.
Mercer said 44% of companies with more than 500 employees currently cover GLP-1 drugs for obesity. Data from the Business Group on Health show 67% of large employers cover GLP-1s in 2026.
Cigna has already ended coverage of weight-loss GLP-1 treatments for its own employees, effective in July, Reuters first reported this month. The insurer told employees they could buy the drugs elsewhere.
The shift comes as new oral weight-loss drugs and injectable medications from Novo Nordisk and Eli Lilly are being offered through the drugmakers’ websites at discounted prices. Those prices were shaped in part by a deal with the Trump administration tied to TrumpRx.gov.
Novo launched a Wegovy pill in January, while Lilly began selling its Foundayo pill in April. Both start at about $149 per month.
Lauren Remspecher, a director at Purchaser Business Group on Health, said employers remain concerned that their arrangements with pharmacy benefit managers are not producing the same savings available to customers who buy directly and pay cash.
Pharmacy benefit managers negotiate drug prices for large companies and health plans.
“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,” Remspecher said.
Demand for GLP-1 drugs has increased this year, especially after the introduction of oral options that appeal to people who had not previously tried injectable weight-loss medications. Five industry experts said the broader patient pool has kept employer costs elevated.
Several experts said employers are also seeing patients remain on GLP-1 drugs long term. That extended use, combined with a growing number of eligible patients, has made the medications a larger cost driver than many other treatments.
Foundayo and Wegovy pills have been shown to reduce weight by 11% and 14%, respectively. Those reductions are lower than results seen with injectable versions, but oral medications may appeal to patients who are uncomfortable with 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 seen some patients switch from injectable GLP-1 medications to oral versions, while new patients are also choosing pills. Aon said it expects GLP-1 coverage to decline next year.
Dan Mendelson, CEO of Morgan Health, a healthcare unit owned by JPMorgan, said pills are likely to reduce the cost of individual treatments this year. But he said overall spending is still expected to rise because more people are taking the drugs.
“But every year there’s going to be market growth,” Mendelson said. “There’s going to be more people taking these drugs, so on aggregate this still represents a major cost driver for employers.”
The debate leaves employers balancing the health benefits of weight-loss drugs against the cost of covering medications that may be used by large numbers of workers for extended periods.
As demand expands, more companies may reconsider whether to cover GLP-1s for obesity, restrict eligibility, shift patients toward lower-cost options or require employees to purchase the medications directly outside employer-sponsored health plans.
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