Large employers expect healthcare costs will be 50% higher in 2025 than in 2017, and prescription drug spending — including for Glucagon-like peptide-1, or GLP-1, medications — is expected to be a significant driver of those increases, officials at the Business Group on Health said during a press conference Tuesday.
The organization’s survey of 125 large employers found that 56% said that GLP-1 drugs were impacting their healthcare costs either to a “very great” or “great” extent. At the same time, 70% said they were “very concerned” about the appropriate use and long-term cost implications of GLP-1 drugs and other, newer weight management medications.
GLP-1 drugs constitute a class of medications that has recently gained some regulatory approval for use in weight management and for reduction in the risk of heart attack, stroke or death in people with cardiovascular disease. But the drugs’ expense means that employers have been slow to provide coverage of them through their health plans.
The share of employers that did provide coverage varied depending on the conditions for which the drugs were prescribed. BGH found that nearly all respondents covered GLP-1 drugs for diabetes treatment, while 67% covered prescriptions intended for obesity treatment and only 34% did so for treatment of cardiovascular conditions
Most large employers cover GLP-1 drugs for diabetes, followed by obesity
Ellen Kelsay, BGH’s president and CEO, said Tuesday that employers have implemented requirements to manage use of GLP-1 drugs including 87% that used prior authorization. More than half of employers required plan members to participate in a weight management program or meet a specific body mass index threshold or have certain comorbidities.
Though it was not captured in the survey data, Kelsay also said that she has heard anecdotally that employers are concerned about employees receiving GLP-1 drugs from direct-to-consumer platforms and compounding pharmacies that do not have clinician oversight.
“They are getting questionable quality in terms of the medication and questionable guidance in terms of the support from the provider, who is often not a clinician, who is overseeing that care,” she said. “There’s just general concern that that is something that should be watched with a lot of trepidation. Employers are certainly not encouraging employees to go in that direction although they are cognizant that some employees are on their own.”
To that end, 24% of respondents said that they were requiring plan members to acquire GLP-1 drugs through specific physicians or programs, said Brenna Shebel, VP at BGH.
GLP-1 drugs are a “considerable factor” in driving up costs, but they are also one of many, Kelsay said. She noted that cancer — which BGH identified two years ago as a significant future concern for employer plans — topped the list of cost-driving conditions for the third consecutive year.
In all, 72% of respondents said they were already seeing a higher prevalence of cancers in their patient populations, and an additional 16% said they anticipated seeing an impact from this. Kelsay said that employers have also reported an increase in cancer diagnoses in younger patients.
That may explain why 87% of employers plan to cover at least one form of additional cancer screening beyond what is recommended by healthcare professionals, including 49% who said they currently cover colonoscopy alternatives.
BGH’s findings on cost increases generally track with those reported by other firms. Respondents projected a 7.8% hike in costs for 2025 before plan design changes. A survey published earlier this month from the International Foundation of Employee Benefit Plans similarly projected an 8% increase in costs.
“Healthcare cost is really the headline story of this year’s findings,” Kelsay said, adding that the trend of increasing costs “has remained a troubling issue, especially more so this year.”
