Summary
JPMorgan's annual survey of 40 executives reveals a slow but steady increase in coverage of popular weight-loss drugs, with 45% of companies currently covering GLP-1 weight-loss drugs like Novo Nordisk's Wegovy and Eli Lilly's Zepbound. However, this number may not reach 50% in the coming year, as only 65% of those who already cover these drugs plan to continue doing so. The lack of coverage for weight loss highlights the ongoing struggle employers face in weighing the cost of these in-demand injectable treatments.
Coverage and Cost Implications
The JPMorgan survey shows that while 80% of companies cover diabetes drugs like Novo Nordisk's Ozempic and Eli Lilly's Mounjaro, the number of those covering them for weight loss is significantly lower at 45%. This disparity in coverage raises concerns about the cost implications for employers. A previous analysis by Kaiser Family Health estimated that almost 50 million adults in employer plans meet the clinical criteria for taking these weight-loss drugs, which can cost thousands of dollars annually per person.
The high demand for these treatments creates pressure on companies to weigh the benefits and costs of coverage in their benefits plans. The federal government has also been hesitant to cover these drugs solely for weight loss, although the Biden administration has proposed changing those rules. If Medicare does allow coverage, employers may follow suit, taking a lead role in expanding access to these medications.
Employer Perspectives on Coverage
The JPMorgan survey highlights the complexities and challenges faced by employers when deciding whether or not to cover weight-loss drugs. While some companies are willing to continue covering these medications, others are hesitant due to concerns about cost. The uncertainty surrounding future plans is evident in the fact that 13% of those who do not currently cover these drugs plan to do so in the future, while 54% remain unsure.
The lack of coverage for weight loss underscores the ongoing struggle employers face in balancing the needs of their employees with the financial implications of providing expensive treatments. The decision to cover these medications is often a difficult one, requiring careful consideration of factors such as cost, efficacy, and patient demand.
Potential Impact on Premiums
The high cost of GLP-1 weight-loss drugs poses significant challenges for employers seeking to balance their budgets with the needs of their employees. Even with prior authorization rules in place, the number of adults who would be eligible for coverage is substantial, which could lead to increased premiums for both employees and employers.
A report from Kaiser Family Health highlights the estimated cost implications of covering these medications. According to the analysis, almost 50 million adults in employer plans meet the clinical criteria for taking weight-loss drugs like Wegovy and Zepbound. These costs can be substantial, with annual per-person expenses ranging into the thousands of dollars.
Future of Coverage
The federal government's stance on coverage is a crucial factor influencing employers' decisions about whether or not to cover these medications. The Biden administration has proposed changing the rules governing Medicare coverage for weight-loss drugs, which could pave the way for expanded access to these treatments.
In the meantime, employers must navigate the complexities of weighing benefits and costs. As more diseases are approved for treatment by these medications, demand is likely to continue growing. Employers must carefully consider their options and weigh the potential costs against the benefits of providing coverage for weight-loss drugs.
Conclusion
The JPMorgan survey highlights the ongoing struggle employers face in deciding whether or not to cover popular weight-loss drugs like Wegovy and Zepbound. While 45% of companies currently cover these medications, only 65% of those who already do plan to continue doing so in the coming year. The high demand for these treatments creates pressure on companies to weigh the benefits and costs of coverage in their benefits plans.
The federal government's stance on coverage is a critical factor influencing employers' decisions about whether or not to cover weight-loss medications. If Medicare does allow coverage, employers may follow suit, taking a lead role in expanding access to these medications.
Ultimately, the decision to cover weight-loss drugs requires careful consideration of factors such as cost, efficacy, and patient demand. As more diseases are approved for treatment by these medications, employers must navigate the complexities of weighing benefits and costs to make informed decisions about coverage.