A New Way To Manage The GLP-1 Explosion

GLP-1 receptor agonists are all the rage these days for the promise of easy weight loss. GLP1s are FDA-approved for managing Type 2 diabetes but physicians are prescribing the medication for off-label use to help their patients lose weight. Between 2020 and 2023, the use of GLP-1 medications such as Ozempic and Wegovy, increased sharply due to off-label prescriptions. While these medications are very effective, they are also very expensive, which is challenging insurers, employers, and patients alike. As the demand for GLP-1 drugs continues to grow, particularly for weight loss, understanding the complexities of coverage and finding cost-saving strategies has become a top priority.

GLP-1 Medications: A Growing Financial Burden

High demand coupled with a steep price tag means pharmacy budgets are getting pushed to the brink. An analysis by KFF indicated that as many as 42% of U.S. adults under 65 with private insurance may be eligible for GLP-1 drugs, a reflection of how widely they are now being considered for both diabetes and obesity management. The following are the average retail costs of two popular GLP-1 drugs:

1. Ozempic: Average retail price is $900 to $1,200 per month.
2. Wegovy: Average retail cost is approximately $1,300 to $1,500 per month.

The Off-Label Use Dilemma

A report from Bloomberg noted that sales of GLP-1 drugs more than doubled from 2020 to 2022, largely driven by increased off-label prescriptions for weight loss. Although highly effective for managing Type 2 diabetes, GLP-1 medications like Ozempic are not FDA-approved solely for weight loss. Yet, many physicians continue to prescribe them off-label to help patients shed pounds. This practice has raised ethical and financial concerns. The off-label use of these drugs for weight loss is placing intense strain on pharmacy budgets.

Employers and insurers are caught in a bind—cover the drugs for weight loss, potentially driving up premiums, or exclude coverage and face pushback from employees and members who deeply desire effective weight management. An August 2023 survey from KFF revealed that 80% of adults believe insurers should cover weight loss drugs for those diagnosed as overweight or obese but few actually do.

HealthTech Can Lower GLP-1 Costs

As health plans and employers grapple with these rising costs, they are turning to unpopular solutions like prior authorization (PA) to control pharmacy budgets. Through PA, insurers can limit off-label use of GLP1s by denying coverage for non-approved reasons. Further, they can encourage physicians to consider cheaper alternatives for weight loss.

Read more about tackling the GLP-1 drug cost problem here.

Employer Benefit Costs Going Up In 2025

Analysts predict another difficult year for employers as health benefit costs are slated to rise by 5.8% Mercer’s recent “National Survey of Employer Sponsored Health Plans” predicts the surge in 2025 will mimic the increases seen in 2023 and 2024. The substantial annual increase is a shift from previous decades, where annual increases hovered around 3%. Without implementing cost-cutting measures, employees could see a jump in their premiums and copays.

Why are costs going up again?

Mercer’s report listed three main elements that are contributing to healthcare cost increases for employers.

1. Worker demand pressures. There are not enough healthcare workers across the country, which makes the market more competitive and increases labor costs.
2. Provider consolidation:  With a wave of hospital and healthcare provider mergers, there is less competition, which drives up costs.
3. Prescription price increases: Prescription drug costs continue to rise above inflation, mainly driven by specialty drug treatments, such as GLP-1 medications. Employers reported a 7.2% increase in drug benefit costs per employee for 2024.

RazorMetrics lowers costs without unpopular strategies.

Employers need innovative ways to manage spending without sacrificing the quality of care for their employees. This is where RazorMetrics’ powerful solution fits in. Using AI and advanced data analytics, RazorMetrics identifies pain-free, cost-saving opportunities. RazorMetrics provides multiple cost-saving options for employers, here are just a few:

• Formulary optimization with therapeutic interchange. The platform suggests a lower-cost, equally effective medication directly to the physician for approval.
• Polypharmacy management. One of RazorMetrics’ standout programs is our patent-pending polypharmacy solution. Nearly 20% of adults aged 40-79 are polypharmacy, meaning they take at least five prescription medications regularly. Patients on 5-9 medications have higher costs, complicated medication regimens, and a 50% higher chance of an adverse drug interaction. Adverse drug events cause 1.3 million emergency department visits each year and about 350,000 hospitalizations.
• Biosimilar Interchange. RazorMetrics’ Biosimilar Interchange initiative is a new innovative program designed to help health plans and employers provide cost-effective, FDA-approved alternatives to branded biologic drugs.

Reach out to start saving on pharmacy costs today.

What We're Reading:

The Promise of Precision Medicine

In the U.S., medical treatment is based on the diagnosis, not the person. It’s a one-size-fits-all approach in which physicians prescribe medications that have been approved to treat the disease state. The approach has improved lives for many but not all. Recently, a new approach to pharmacology is developing, precision medicine, which tailors a treatment to an individual’s biology.

Pharmacogenomics

Pharmacogenomics matches a patient’s genetic profile with the medications that are most likely to work for them or to cause problems. If physicians know ahead of time that a drug therapy is unlikely to work for their patient due to their genetic profile, then they can skip trial and error style of prescribing.

Cancer Immunotherapy

Our immune system is designed to find and destroy abnormal cells, but cancer cells are squirrelly and find ways to slip under the body’s radar. Immunotherapy helps the immune system zero in on cancer cells and wipe them out without attacking healthy cells the way chemotherapy works. Immunotherapy has a way to go, but the results are very promising.

Rare Diseases

Rare diseases have a difficult time getting attention and research dollars because each condition affects a very small number of people. But, if all rare diseases are added up, they effect approximately 30 million Americans. Federal efforts like the National Institute of Health’s Undiagnosed Diseases Program have helped unlock some of the toughest medical puzzles, sometimes uncovering clues that lead to better treatments for more common diseases. Precision medicine, with its focus on individualized treatment based on genetics could be a game-changer for the thousands of rare diseases that currently do not have an approved treatment.

Precision Oncology

Instead of classifying cancers by where they appear in the body, like lung or breast cancer, precision oncology is focusing on the molecular makeup of tumors. Just because a cancer is found in a specific location, does not mean that all cancers found in that part of the body are the same, or should be treated the same.

In a recent study published in Nature Medicine, researchers studying high-risk childhood cancer showed that precision medicine was superior to standard cancer therapy for both clinical response and survival. 

Read more about Precision Medicine here.