Drugs like Ozempic could prove costly for benefit plans – but also mean healthier employees
“Ozempic” filled many headlines in 2023, as the GLP-1 drug has proven effective and popular when it comes to weight loss – despite its original mandate being focused on diabetes.
But how many Canadian employers offer such drugs as part of employee benefits?
Sixty-six per cent provide coverage for GLP-1 drugs for diabetes only, while 17 per cent provide coverage for both diabetes and weight loss, according to a recent survey from the International Foundation of Employee Benefit Plans.
However, just nine per cent of employers are considering offering coverage for GLP-1 drugs for weight loss, with 56 per cent are not considering coverage, and 35 per cent are unsure.
Despite the multiple uses of GLP-1 drugs, employer coverage usually only extends to treatment for diabetes, said Harpreet Singh Bajaj, endocrinologist and medical director, endocrine and metabolic research, LMC Healthcare/Centricity.
Part of the reason for lack of employer coverage is due to the prevalence of obesity across North America. In 2022, almost 35 per cent of Canadians over 18 years old were overweight and 30 per cent were obese, according to Statista.
“I think employee benefit plans don’t cover GLP-1 drugs for obesity due to the enormity of the situation and because of the cost for employers if everyone who needed them started using these drugs,” Bajaj said.
Employer concerns about GLP-1 drugs for obesity
The short- and long-term cost of GLP-1 drugs remains a concern for employers, as do questions regarding the long-term effectiveness of these drugs for weight loss, said Julie Stich (pictured above right), IFEBP’s vice president of content.
“Employers are still not necessarily understanding these drugs, as there's not a lot of data out there to determine the side effects,” she said.
According to the IFEBP survey, the top 10 factors when considering covering GLP-1 drugs for obesity are:
- Obesity as a risk factor for chronic diseases and associated costs
- Drug shortages
- Impact/effectiveness of cost-control mechanisms
- Existing coverage through government programs
- Long-term costs
- Patient and prescriber demand
- Broker/consultant/ PBM recommendations
- Lack of long-term use clinical studies of GLP-1 drugs
- Side effects
- Similar drugs in research and development
The cost of these drugs can range from a minimum of $200 to $300 a month, and this cost would stretch over a long period of time, as GLP-1 drugs for weight loss require prolonged use, Bajaj said.
“These aren’t just used for a few months; studies have shown that if these medications help people, then they need to be continued to maintain that weight loss. If these medications are stopped, then the weight comes back, and even weight gain can occur, so this is one of the challenges with why these medications are often not covered,” he said.
Source: IFEBP
Another factor relating to employer concerns is that obesity is not considered a disease entity like diabetes, and employers and insurance providers cannot or do not want to cover medications for a disease entity they don’t think exists, Bajaj said.
Cost control and benefit plans
When it comes to cost control mechanisms, utilization management, lifetime maximum costs or annual maximum costs and step therapy are just some of the tools employers can use to keep the costs of these drugs down, Sitch said.
“One of the issues employers may want to be looking at is whether they're self-funded, or whether they're a fully insured plan, if that gives them some leeway, and how they're offering these benefits.”
Source: IFEBP
Large organizations may be able to take on these costs, whereas smaller organizations may not have the same capabilities. However, there is also consideration for the number of employees who would need coverage for these drugs, as larger companies may also have a larger percentage of employees who could use these drugs, resulting in an overall larger cost on the employer, she said.
Controlling obesity to control health costs
Obesity can be the basis for multiple chronic illnesses including cardiac disease, heart attacks, strokes, and kidney disease, all of which could create additional long-term costs for employers, Bajaj said.
“From an employer perspective, covering these drugs could help prevent complications from obesity; they'll be healthier, they'll have a better quality of life, and hopefully, there will be less costs because of the costs associated with these complications as well.
“I would think happier employees and with a better quality of life would be more useful to the employer from a work efficiency standpoint as well.”
However, some people might do well with diet and exercise counselling and reducing the stigma surrounding obesity, potentially reducing the need for reliance on GLP-1 drugs. Bajaj recommends that the combination of counselling as well as medications should be an option offered for employees who need it.
