GLP-1 weight-loss drugs may be worth the price — but insurers still say they can’t afford them
The drugs may deliver good value for each patient, but covering everyone who qualifies could overwhelm health-plan budgets.
The soaring cost of covering weight-loss medications is creating an unusual health insurance dilemma: The drugs may be worth what they cost, but insurers may still be unable—or unwilling—to pay for them on a broad scale.
Researchers at the University of Mississippi say that distinction helps explain why health plans continue to limit access to medications such as Wegovy and Zepbound even as evidence of their medical benefits grows.
“The ICER report shows that GLP-1s, at the cost that they are currently being sold, provide tremendous value to society,” said Sujith Ramachandran, an associate professor of pharmacy administration at the university. “But the impact they create on the budget is still massive.”
The researchers’ analysis, published in the Journal of Managed Care & Specialty Pharmacy, examined findings from the Institute for Clinical and Economic Review, or ICER, an independent nonprofit that evaluates the effectiveness and economic value of medical treatments.
ICER concluded that semaglutide—the active ingredient in Wegovy—and tirzepatide, sold for weight loss as Zepbound, produce meaningful health improvements and represent high long-term value at their estimated net prices. An independent ICER panel voted unanimously that the treatments provide a net health benefit when combined with lifestyle changes.
But “cost-effective” does not mean inexpensive, nor does it mean the drugs will immediately save an insurance company money.
James R. Hood
A good value multiplied by millions of patients
The problem is scale.
About 40% of American adults have obesity, according to federal estimates cited by the researchers. Even if only a portion of eligible patients sought medication, the resulting cost could reach billions of dollars annually.
ICER uses an annual budget-impact threshold to flag treatments whose widespread use could place significant strain on the health system. That threshold is currently about $821 million, Ramachandran said.
GLP-1 medications could exceed it even if relatively few eligible patients receive treatment.
“That is happening because the patient population eligible for this medication is so large,” Ramachandran said. “Even if the medications themselves represent good value for society, that does not mean we, as a society, can take the impact of how many individuals would use this.”
ICER estimated the annual net price of injectable semaglutide at $6,829 and tirzepatide at $7,973—far below their retail list prices but still substantial when multiplied across millions of patients. The organization calculated that the drugs’ health benefits could justify prices at or above those amounts.
That leaves insurers confronting two different questions:
Does the drug provide enough health benefit to justify its cost?
And can the health plan afford to provide it to everyone who qualifies?
The answers may be “yes” and “no.”
Future savings remain uncertain
Supporters of expanded coverage argue that treating obesity could eventually lower spending on diabetes, cardiovascular disease, kidney disease, sleep apnea and other health conditions.
The researchers said that outcome is plausible but has not yet been demonstrated clearly enough to show that the drugs will generate net savings for insurers.
“We expect that if we address the obesity issue in this country, then in theory, it should create savings down the road for cardiovascular conditions, liver conditions and kidney conditions,” Ramachandran said. “But does that mean it actually produces savings? Well, the existing data do not show that.”
One complication is that insurers pay the cost immediately, while many of the medical benefits may emerge years later. Patients also change jobs and insurance plans, meaning the company paying for treatment today may not be the one that benefits from lower medical costs later.
Many patients also stop using GLP-1 drugs within the first year because of cost, side effects, insurance restrictions or because they have reached a target weight. Weight regain is common after treatment ends.
That weakens the argument that a limited six- or 12-month course will reliably produce lasting savings.
The drug alone may not be enough
The researchers also cautioned that the medications did not produce their clinical-trial results in isolation.
Participants generally received lifestyle counseling or other weight-management support along with the drug. The relevant comparison, Ramachandran said, was not simply medication versus no treatment.
“It was not lifestyle management versus GLP-1,” he said. “It’s lifestyle management versus lifestyle management plus GLP-1.”
Insurance plans that cover the medication but fail to provide nutrition counseling, exercise assistance and continuing medical supervision may not achieve the same outcomes seen in clinical studies.
Ramachandran said effective programs may need to include access to registered dietitians, fitness services and other support designed to make behavioral changes sustainable.
ICER has similarly called for comprehensive obesity treatment rather than drug-only coverage. Its recommendations include less burdensome eligibility rules, lower patient cost-sharing, greater primary-care support and substantial manufacturer discounts in exchange for higher sales volume.
Coverage is likely to remain selective
Insurance coverage has gradually expanded for patients who have diabetes or certain obesity-related conditions, including cardiovascular disease and obstructive sleep apnea.
But patients seeking treatment solely for weight loss may continue to face exclusions, prior-authorization requirements, high body-mass-index thresholds or demands that they first complete diet and exercise programs.
“We are seeing that GLP-1 coverage is getting more accessible for specific conditions—sleep apnea, diabetes, extremely high BMI or a combination of these things,” Ramachandran said. “But for other conditions, coverage is probably going to get more restrictive.”
Some insurers and employers have already narrowed or eliminated weight-loss coverage because of rapidly increasing pharmacy spending. Drugmakers, meanwhile, have increasingly turned to direct-to-consumer programs and discounted cash prices to reach patients whose insurance will not pay.
Cheap compounded products can carry additional risks
Patients denied coverage may be tempted by websites advertising inexpensive compounded or supposedly generic versions of semaglutide and tirzepatide.
The Mississippi researchers urged consumers to proceed cautiously.
Compounded medications are not reviewed and approved by the Food and Drug Administration in the same way as branded prescription drugs. Although legitimate compounding pharmacies can legally prepare medications in limited circumstances, regulators have warned about sellers using unapproved ingredients, incorrect dosages or products of uncertain origin.
“The FDA has found websites selling unapproved ingredients or even the wrong ingredients, which is terrifying for patients,” said Liang-Yuan Lin, a University of Mississippi doctoral candidate who studies compounding pharmacies.
“Even if they’re listing the right ingredients, you don’t know where these ingredients are from or how they’ve been transported or handled, which could be really dangerous,” Lin said.
The researchers recommend that patients obtain GLP-1 medications through a licensed medical professional and verify that the product is FDA-approved.
What consumers can do
Patients considering a GLP-1 drug should ask their insurer for the complete written coverage criteria before starting treatment. Requirements may differ depending on whether the drug is being prescribed for diabetes, obesity, cardiovascular risk reduction or another approved condition.
Consumers should also:
- Ask whether prior authorization or step therapy is required.
- Determine whether coverage continues after reaching a lower weight.
- Check whether nutritional counseling or a weight-management program is included.
- Ask the prescriber to appeal a denial and document related medical conditions.
- Compare the insurer’s price with legitimate manufacturer self-pay programs.
- Avoid sellers offering prescription injections without a medical evaluation.
- Verify the pharmacy through the relevant state board of pharmacy.
Patients should not assume that a product described as “compounded,” “generic” or “research grade” is equivalent to an FDA-approved medication.
The larger problem remains unresolved: GLP-1 drugs can deliver major health benefits, but their success has created a potential patient population so large that the conventional insurance system may be unable to finance widespread treatment at current prices.
In other words, a medication can be worth its price—and still cost too much for everyone to receive it.
