Employers Drop Pricey Weight Loss Drugs From Insurance Coverage

Employers are cutting off insurance coverage on popular drugs used for weight loss, The Wall Street Journal reported.

Ozempic and Wegovy have been flying off the shelves, as more and more people have turned to the drugs for their weight loss benefits. Without insurance coverage, however, the drugs could cost as much as $1,350 per person per month, or more. These costs have snowballed into tens of millions of dollars for insurance plans, the Journal reported. And much of that burden falls on employers that offer these plans.

The University of Texas System recently shed Wegovy and Saxenda, another weight loss drug from Novo Nordisk, from its coverage, citing ballooning costs of the drug. Under the university’s plan, the cost rose for these drugs to over $5 million per month as of May, from approximately $1.5 million per month 18 months ago. 

These medications are the costliest prescription drugs paid for by the plan annually — even more expensive than medications for complex conditions like cancer, the university said. And continuing to dispense these medications would add an additional $73 million dollars a year to prescription plans. 

What's more, the university has said it is not seeing the expected benefits to its insurance costs from employees' use of the weight loss drugs.

"The plan is not seeing the expected reduction in cost for other conditions a member may be attempting to control as a result of using Wegovy or Saxenda," it wrote in its benefits letter. "These savings are not being realized due to the excessive cost the drug manufacturer charges for the weight loss medication."

Ascension Healthcare, one of the largest private healthcare systems in the U.S., cut all weight-loss drugs, including Wegovy and Saxenda, from its coverage list on July 1.

“Everybody is concerned this treatment is going to add a huge cost burden on health plans,” Michael Thompson, chief executive of the National Alliance of Healthcare Purchaser Coalitions, told the Journal. “It’s one of the key issues employers are having to wrestle with today because of the prevalence of these medicines.”  

Other employers haven’t removed the drugs outright from their coverage plans, but have taken other steps to try to cut costs. The University of Michigan increased the monthly copay for Wegovy and Saxenda in March.

“These are very expensive medications,” Brian Vasher, assistant vice president for benefits and well-being programs at the university, told the Journal. “We do want people to try those lower-cost options.”

State government employees in Connecticut are now required to obtain anti-obesity drugs through Intellihealth, an anti-obesity medical practice based in Connecticut, the Journal reported.

Connecticut State Comptroller Sean Scanlon told the Journal that completely cutting these drugs out of coverage plans would be a "nonstarter, because these drugs do work. People want to take them."