GLP-1s are accelerating spending growth on traditional drugs, Evernorth research finds

Dive Brief:

Demand for GLP-1 drugs is causing spending on traditional drugs to grow at a faster clip than spending on specialty drugs, according to new research. That could put further stress on employers and health plans struggling to contain already sky-high spending on prescription drugs.
Spending growth for traditional drugs — simple-to-administer medications used to treat common health problems — outstripped spending growth for specialty drugs — pricey medications used to treat complex and chronic conditions — for the first time in 2023, according to a report released Tuesday by Evernorth, the health services division of national insurer Cigna.
The trend isn’t expected to revert, at least in the next few years, amid sustained demand for GLP-1s for weight loss and as the drugs become approved for more conditions, Evernorth said.

Dive Insight:

GLP-1s, short for glucagon-like peptide-1 receptor agonists, are a class of drugs that work by mimicking a hormone that regulates blood sugar levels. GLP-1s have been approved for diabetes for two decades, but more recent iterations of the drugs have shown strong efficacy in promoting weight loss and helping with related conditions, like heart disease and sleep apnea.

Demand soared for the drugs as a weight loss aid in the early 2020s, despite their high price tag placing access out of reach for many Americans. The number of people who could be helped by GLP-1s is immense: Roughly 70% of American adults are obese or overweight, according to government data.

Coverage of GLP-1s for weight loss has steadily increased, though it’s not universal. According to Evernorth, 59% of health plans and 22% of employers report they cover GLP-1s for weight loss.

But despite the drugs’ potential to ameliorate obesity and other chronic conditions, the cost of GLP-1s is adding more accelerant to rising prescription drug spending in the U.S., which is already growing rapidly thanks to rising rates of chronic conditions, persistent price inflation and other factors.

Costs for traditional drugs have remained stable for years, but increased dramatically after semaglutide, a type of GLP-1 drug, was approved for chronic weight management in 2021, the Evernorth report found.

GLP-1s can be quite costly: List prices for GLP-1s Wegovy and Ozempic hover around $1,000 for a month’s supply.

Last year, drugs targeting weight management made up almost half — 46.8% — of the total increase in drug spending, according to Evernorth’s research, which is based on data from more than 27 million consumers with commercial insurance coverage nationwide.

Among those, GLP-1s for weight loss were the “predominant driver,” the report said, with net trend jumping more than 200% in 2023.

But as adoption surges and coverage expands, employers and payers are worried about the return on their investment.

More than half of patients who use GLP-1s for weight loss stop treatment prematurely, according to Evernorth, with many citing uncomfortable side effects from the medications or concerns about medication safety.

Patients can lose as much as 15% to 25% of their body weight while on the drugs. However, people who stop taking GLP-1s generally regain about two-thirds of the weight they lost within one year, according to research.

Companies like Evernorth are looking to capitalize on the tension between controlling GLP-1 cost growth and consumer demand for the drugs by creating products aimed at long-term behavior change.

The pitch is that by pairing GLP-1 prescriptions with management programs, insurers and employers can help patients shed pounds and ensure they keep the weight off even after they stop using the drugs, ensuring that hefty investments in GLP-1s aren’t zeroed out down the line.

Through health services subsidiaries, Cigna, Elevance and UnitedHealth have launched weight management programs for their clients over the past two years.

A number of smaller chronic condition management companies, including Omada, Lark Health and DarioHealth, also offer behavior change platforms in conjunction with GLP-1s.

Despite ongoing cost concerns, utilization of GLP-1s is expected to continue growing as lower-cost alternatives enter the market, more providers become comfortable prescribing the drugs and plans expand their coverage policies, according to Evernorth.

Even Medicare, which is forbidden by law from covering medication for weight loss, is seeking to overturn that restriction — though, it’s not clear whether the Trump administration will support the proposed change.