Why breakthrough GLP-1 weight loss pills may be a bad thing for employer insurance coverage

The new GLP-1 pills are likely to boost consumer demand for these popular weight-loss drugs. But it could also signal bad news for employees who want their employer-sponsored health insurance plan to foot the bill. Novo Nordisk, the maker of Wegovy, introduced its GLP-1 pill for weight loss in early January, while Eli Lilly's pill, Foundayo, began shipping in April. While many industry watchers were hoping the oral equivalents would be more financially palatable, they're roughly the same cost as injectables for employers that offer them through insurance. This, coupled with the fact that more people are likely to be interested in a pill rather than a shot, is giving employers pause. Notably, a Business Group on Health survey fielded earlier this year found that 87% of employers expect the availability of oral medications to increase demand for GLP-1s, while only 9% predict a price drop. In 2025, nearly half of all large employers covered GLP-1 medications approved for weight loss, according to Mercer. But costs are becoming prohibitive. In NFP's recent annual employer survey, 51% of employers cited GLP-1s as the top driver of rising prescription drug costs. "Employers say the rise in pharmacy costs is unsustainable," said Nick Conway, president of Rx Solutions at NFP, a global benefits consultant. The cost for obesity drugs — with list prices in the $1,000 to $1,350 range per month before insurance — is a major roadblock for many patients who could benefit from significant weight loss and the reduced potential for related health issues. Employers generally don't pay the list price for employee coverage, but even after various discounts, plan sponsors may pay a net price of around $569 to $664 a month per employee, according to estimates by the Institute for Clinical and Economic Review, making for a hefty bill. All of this helps to explain why the breakthrough of the weight-loss pills may not affect company coverage of GLP-1s in a way that benefits employees. Concerns about upfront costs, lack of long-term benefits There's no denying that employees want access to weight-loss drugs at lower prices. The NFP report found that 29% of employees would be willing to switch employers to gain access to GLP-1 benefits. "They are very important options that employees are looking for in the workplace," Conway said. Employers know there's demand for these medications. But they are experiencing higher costs and many of the returns for employees – and employers – are long-term. While they "want their employees to be as healthy as possible," they're not necessarily willing or able to absorb such a high bill, said Raymond Brown, North American clinical pharmacy leader at Mercer. Many companies are concerned about the high upfront-costs only to have people discontinue the drugs, negating the long-term benefits, said Ben Barner, clinical pharmacy leader at insurance brokerage Brown & Brown. When people discontinue these medications, they tend to regain the weight they lost. Employers are concerned about spending so much money without knowing employees are committed and able to reap the long-term health benefits, Barner said. Regardless of whether they're using pills or injectables, employers are still concerned about employees' dedication to using the medications long-term. And given that the oral versions of GLP-1s offer no significant pricing difference from injectables for employers, their availability doesn't necessarily make the economics more favorable for companies, Barner added. Despite employee demand, companies are considering ways to tweak or eliminate coverage. A recent Mercer study showed that employers pulled back on GLP-1 weight-loss medication coverage in 2026, with more cuts considered for 2027. Among employers with 500 or more employees, 6% dropped coverage in 2026, and 5% are planning to drop or are actively considering doing so for 2027, the survey found. The Business Group on Health survey found that among companies that cover GLP-1s for weight management, 10% are unlikely or very unlikely to continue the coverage in 2027 for cost reasons, according to Magda Rusinowski, vice president of the non-profit, which represents employers' perspectives on health-related issues. Many companies are also tightening restrictions for employees to qualify. For instance, while many companies require a BMI of 30 or higher, or 27 or higher, with a weight-related medical condition, some are now requiring a BMI of 35 or above to qualify, said Eileen Pincay, national pharmacy practice leader at Segal, a benefits and human resources consulting firm. Others are just covering the medications for diabetics or becoming stricter on behavior management requirements, she added. Some employer plans may not offer the pills at all While the GLP-1 pills are priced essentially the same as injectables, trials show they are less effective for weight loss. It's possible that some employers may not put them on their list of covered drugs, said Jeff Levin-Scherz, population health leader at WTW. This will depend on whether pharmacy benefit managers impose fees for not offering them, or whether PBMs will make employers ineligible for other rebates if they don't offer the pills. "It's still early. We don't know what's really going to happen," Levin-Scherz said. Some employers are exploring lower-cost options for employees. For example, employers may reimburse workers through health reimbursement arrangements (HRAs), employer-funded plans that reimburse employees for medical expenses, said Barner. Employers can also provide access to employees through a third-party weight management program instead of their traditional pharmacy benefit program. Lilly, for example, has relationships with more than 15 independent program administrators including 9amHealth, GoodRx and Goodpath to offer tailored obesity coverage options for employers. Novo Nordisk offers a similar employer program. Some employers are also offering GLP-1 coverage for weight management through direct-to-consumer programs. These may cost employees more than a standard insurance co-pay of $25, but are still generally less than employers pay for the drugs through pharmacy benefit managers. Employers may also subsidize some or all of the manufacturer's monthly prescription costs, Barner said. Oral GLP-1 medications for weight loss, specifically Wegovy and Foundayo, are available direct-to-consumers with cash prices starting at $149 per month for the lowest doses. For the injectables, someone without insurance might pay a starting price of $299 a month for Zepbound and $199 a month for Wegovy, but, of course, people don't stay on the initial doses, so the actual per-month cost is higher. A major factor contributing to the high cost of weight-loss drugs is that there are only two major pharmaceutical companies producing the drugs right now, so options are limited. This is expected to change over time, which should increase competition and drive prices down – but that's likely at least a year away, Barner said. Meanwhile, the federal government has announced initiatives to lower the cost of GLP-1 drugs — starting July 1, GLP-1s will be available through Medicare for as low as $50 — and with other drug options expected to come to market, prices are eventually expected to drop further. "The net prices of these drugs have come down, and I think there will continue to be pressure on them to come down, especially as other manufacturers' drugs get approved. That will hopefully continue to lower prices," said Levin-Scherz. The bad news is that for the foreseeable future, consumers will continue to pay high prices, and employers are likely to continue to be more circumspect about coverage. "Eventually the prices will go down. Just not yet," said Pincay.