GLP-1s may hike employer premiums by double digits

GLP-1 drugs like Ozempic and Tirzepatide are surging in popularity and cost. These drugs, originally developed for diabetes and now widely used for weight loss, also show promise for other conditions like cardiovascular disease. As demand grows, new research finds covering GLP-1 medications will drive up premiums for employer-provided coverage by as much as 14 percent, even when access is limited to patients with the highest need.

And that increase stems from just one medication, highlighting the outsized impact GLP-1s can have on overall health care costs.

A study from the Employee Benefit Research Institute (EBRI), supported by the Blue Cross Blue Shield Association and other partners, estimates that GLP-1 coverage would be a major premium driver for employer-provided coverage. Under a simulation model, even a narrow expansion of coverage for GLP-1s comes at a cost because the prices are so high.

GLP-1s currently cost up to $766 per month (net of discounts and rebates). While some modeling scenarios assume drug prices as low as $200 a month, the impact on premiums remains notable. Under a moderate-cost scenario, increases range from 1.0 percent to 3.0 percent, depending on eligibility and adherence. Given current market dynamics, a low-cost product may not be widely available in the near term.

What factors of GLP-1 coverage drive up premiums

Using data from MarketScan and research by Blue Health Intelligence (BHI), the EBRI report models how GLP-1 coverage could affect employer-sponsored insurance premiums, exploring several scenarios based on:

• Drug pricing – Net costs range from $617 to $766 per 30-day supply
• Patient adherence – Perfect adherence leads to higher premiums due to sustained drug use 
• Eligibility criteria – Including overweight individuals with at least one weight-related condition significantly increases cost burden
• Cost-sharing – Cost-sharing structures such as $90 copays help but don’t eliminate increases

Usage is growing

More than 57 million privately insured adults qualify for GLP-1 drugs, like Ozempic and Wegovy. Clinical eligibility is defined by a diagnosis of obesity, diabetes or overweight with other present risk factors. Adoption remained modest until recent years as GLP-1 drug claims rose from 6.9 percent in 2023 to 10.5 percent in 2025. These medications now account for more than 15 percent of annual claims for more than a quarter of employers.

Prices are rising

Prescription drug prices are climbing across the board with national drug spending growing 10 percent in 2024, outpacing other medical costs, while clinical drugs like infusions rose even faster at 14 percent. When it comes to GLP-1s, the prices Americans pay are sometimes 5 to 10 times higher than people pay in other countries.

Adherence is low

Despite growing demand, adherence remains a costly challenge. Nearly two thirds of patients discontinue treatment before reaching the 12-week mark needed for meaningful weight loss. More than 40 percent stop after just four weeks, according to research released by BCBSA and conducted by BHI. While perfect adherence leads to higher premium costs due to sustained drug use, even short-term GLP-1 use incurs high pharmacy spend.

Employers seek solutions

While these drugs represent a small fraction of prescriptions, their financial impact is outsized. A striking example: In one Minnesota school district, GLP-1s account for just 2 percent of prescriptions but a staggering 56 percent of total drug spending.

As employers grapple with how to pay for these medications, some are exploring strategies like:

• Limiting coverage to patients with the highest need
• Pairing GLP-1 coverage with a dietician to improve nutrition, support for physical exercise and intensive behavioral health therapy
• Alternative payment models that hold drug manufacturers accountable for producing results

GLP-1s deliver impressive clinical results but at a steep cost. Employers investing in these treatments expect meaningful outcomes, and success depends on more than prescriptions. Behavioral and care management support are important factors. That's because patients who receive specialist care and consistent follow-up are more likely to stay on track. As adoption and adherence grows, plan sponsors are keeping a close watch on clinical benefits and long-term financial impact.

As employers weigh the cost implications of GLP-1 coverage, efforts are underway to reshape the drug pricing landscape. One example is CivicaScript, a nonprofit generic drug manufacturer co-founded by BCBSA and 23 BCBS companies. The initiative aims to bring affordable, transparent pricing to high-impact medications. Its first generic, abiraterone acetate, launched at a 64 percent discount compared to other generics, saving patients nearly $1,000 annually. Additional launches are expected by the end of 2025, with the goal of reducing cost pressures on both employers and members.