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The Cost of Weight Loss Drugs is Rising, but There are Methods to Control Spending

oswaldcompanies April 2, 2024

In the last year, Oswald clients spent more than $49 million on drugs that employees use to treat diabetes or, as has become the latest trend, induce weight loss.

Drugs such as Ozempic® and Wegovy® became trendy weight loss alternatives in 2023, going viral on social media and talked up by celebrities. This sparked widespread media coverage, and Wegovy® became so in-demand that there was a shortage of the drug.

This market frenzy is leading some companies to scramble when it comes to employee benefits. Many are evaluating whether their plans should cover these drugs.

In 2023, the average cost per claimant for Ozempic® was $5,550, an 18% increase from 2022, according to Oswald’s annual report for its book of business. Ozempic now ranks as the second highest-paid drug, behind Humira®, according to Oswald’s report. The number of claimants in the book of business taking Ozempic increased 135% year-over-year, contributing to the climb in overall spend.

Rising drug spend can impact an employer’s health plan renewal rates. Employees could also face higher costs if their carriers choose not to cover the cost of a drug based on how it is being used.

Ozempic® currently has FDA approval to treat diabetes. When doctors prescribe it for weight loss, however, it is considered off-label use and is not always covered by employer health plans. This means employees could be responsible for the full cost of the drug, which retails for roughly $1,100 to $1,300 per prescription depending on dosage, according to Good Rx.

Other diabetes drugs that are commonly prescribed for off-label use to treat weight loss include Mounjaro™, Trulicity, Rybelsus® and Victoza®. Another drug that could gain traction in 2024 is Zepbound, which achieved FDA-approval for weight loss in November.

What can employers do?

Employers on self-funded health care plans can implement strategies to better manage how much they spend on prescription drugs, while also providing for employee needs.

  • Work with the current Pharmacy Benefit Manager (PBM) to make formulary changes and find alternative medicines to control costs. Employers should also review the prior authorization process in place to ensure it aligns with the desired level of benefits they wish to offer the workforce.
  • Carve out drug coverage with a different PBM that offers more competitive pricing than the PBM included with the carrier. Through UnivationRx, Oswald helps find transparent PBMs for clients who implement strategies to focus on less expensive drugs, resulting in reduced costs for employers.
  • Oswald can offer a personal pharmacist who can help educate members on whether they are taking the right drug to manage their condition. They can also suggest cheaper alternatives or coupons to reduce costs for members.

Oswald partners can implement clinical reviews of high-cost claimants to verify appropriate usage, as well as develop a strategic plan that anticipates future regulations and drug development.

Oswald continues to monitor prescription cost and utilization trends for our clients to ensure the right solutions are in place for members and for their bottom line.

If you are not a current client and you are interested in how Oswald can improve your benefits, please fill out the form below. We will be in touch quickly.

Employee Benefits | Cleveland