As the cost of health care continues to rise and employers contemplate their upcoming health insurance renewals, glucagon-like peptide-1 (GLP-1) medications remain top of mind. While GLP-1 use is not new for conditions like diabetes or obesity, the utilization of these medications has dramatically increased, partially due to being an effective weight loss solution. As a result, employers are feeling the stress of managing costs related to the increased use, as many of the GLP-1s cost $1,000 or more per month. Employers have tended to take a conservative approach to covering these medications for weight loss and more are doing so because of increased employee demand.

In the International Foundation’s recent survey released on August 14, of the 23% of survey respondents who indicated that specialty and costly prescription drugs are contributing to the rise in their medical plan costs, 59% say that GLP-1 drugs are the primary reason. According to WTW, GLP-1s still “account for a large portion of the increase in pharmacy spending. They now make up 21% of the pharmacy benefit spend and 4-5% of medical and pharmacy spend together.”

Additional Uses for GLP-1’s

In 2024, the Food and Drug Administration (FDA) approved semaglutide (contained in brand name Wegovy, among others) to reduce the risk of cardiovascular death, heart attack and stroke in adults with heart disease and obesity. As more studies find that GLP-1 medications are effective in treating various medical conditions, utilization of these drugs is expected to rise and will continue to strain employer health plans. And, with over 100 drugs in clinical development for obesity already, more GLP-1 medications are expected to gain FDA approval in 2026, which could drive up costs for employers.

Employer Cost-Management Techniques

Employers are focusing on cost-management strategies to help reduce the impact of GLP-1s on health plan budgets. Julie Stich, CEBS, Vice President of Content at the International Foundation, recently said, “Employers have indicated that cost-sharing, plan design and purchasing/provider initiatives will be the most impactful techniques to manage costs.”

Potential strategies include the following.

• Using a prior authorization process for these drugs
  • This process should be effectively communicated to plan participants and planned carefully by the employer, along with service providers, such as third-party administrators (TPAs), health insurers and pharmacy benefit managers (PBMs).
  • Employers should identify whether stricter eligibility criteria for using GLP-1s is appropriate—for example, using body mass index (BMI) percentages to determine eligibility.
• Using a step therapy process that begins with lower-cost treatments initially
• Actively monitoring medical and pharmacy claims to identify drivers of plan costs
  • Employers should address errors quickly so that they don’t lead to significant expenses.
• Using a pharmacy or medical management carveout to manage GLP-1 use
  • This could include an obesity or lifestyle management program that allows for personalized health and lifestyle coaching, dietician consultants or other support services.
• Identifying whether changing employee cost sharing by increasing employee copayments for different tiers in the plan’s formulary might be an option
• Identifying whether the flexible spending account (FSA) plan and FSA service provider allows GLP-1s to be covered under the plan
  • Employers should communicate with plan participants about whether using FSA funds for GLP-1 medications is allowable under the plan as a way to help employees with the cost of the medication.

In addition to these trends, the International Foundation is also monitoring recent news on expanded access to GLP-1 medications for self-paying consumers. In a May 12, 2025 executive order, President Trump requested that the Department of Health and Human Services (HHS) launch a direct-to-consumer program. Bloomberg Law states that “Manufacturers are building a variety of direct-to-consumer pipelines that can either use patients’ insurance plans or bypass them in favor of cash payments.” Time will tell if this development will impact employer-sponsored plans.

To view International Foundation articles and surveys on GLP-1 medications, visit the Benefits Knowledge Center.

Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.