Employers' GLP-1 Spend Challenges

Though popular culture has become increasingly preoccupied with GLP-1s, the reality is coverage of these medications isn't consistent. 42% of Americans have obesity and 32% are classified as overweight, yet only 67% of employers currently cover GLP-1s for weight management, per a Business Group on Health survey of employers.

Cost pressure explains the hesitation. Eight of ten employers report GLP-1s are driving an increase in company healthcare costs, and 10% of covering employers say they likely would not continue weight-management coverage into 2027. The cost alone makes this drug class one to watch.

Your PBM partner can make or break GLP-1 program success. Legacy PBMs can inflate the cost of an already expensive category through added “program” fees, steering members to their affiliate pharmacies, and waiting on back-end rebates instead of securing low costs up front. A modern, transparent PBM removes those incentives and works to get the lowest net cost on every claim.

Understanding Obesity as a Chronic Disease State

Obesity is a chronic, multifactorial disease with genetic, metabolic, and environmental drivers. It’s not a simple matter of willpower or lifestyle choice. Like other chronic conditions such as hypertension or diabetes, obesity requires ongoing medical management that may include medication, behavioral interventions, nutritional counseling, and in some cases, surgical options. Effective treatment of obesity addresses the underlying biological mechanisms that regulate appetite, metabolism, and fat storage. 

Yet the persistent misunderstanding of obesity as a lifestyle choice creates real consequences: weight stigma remains a barrier to sustained treatment, and only 32% of patients remain persistent with GLP-1s one year after starting, potentially driven by cost, coverage changes, and unmanaged side effects. When employers view GLP-1 coverage through a clinical lens, they're better positioned to select programs that support long-term member health.

The risks of not covering GLP-1s extend beyond member satisfaction. Untreated obesity is linked to Type 2 diabetes, cardiovascular disease, sleep apnea, certain cancers, and joint deterioration. All of these diseases drive long-term medical costs that can potentially dwarf the price of GLP-1s. Employers who drop GLP-1 coverage to contain short-term pharmacy spend may inadvertently shift costs downstream into higher medical claims, emergency interventions, and chronic disease management.

According to research by Milliman, patients who remained on GLP-1s for at least 6 months incurred 20–26% lower total medical costs per patient per year (PPPY) than nonadherent patients. In addition, the study found that in a cohort of nondiabetic patients with obesity, the longer the duration of GLP-1 adherence, the more profound the lowering of total medical costs.

The clinical case for coverage is clear when it comes to immediate weight loss, but there are possibly even more long-term benefits to covering these treatments: GLP-1s can reduce the risk of major adverse cardiovascular events(i.e, stroke, heart attack) by up to 20% in patients with obesity and existing heart disease, according to recent trials. When paired with clinical oversight and lifestyle support, these medications reduce the likelihood of costly, life-altering complications.

Benefits leaders who frame GLP-1 coverage as a long-term investment in population health, rather than a short-term cost problem, are better positioned to build sustainable programs that serve both members and budgets.

Key Strategies to Keep GLP-1 Coverage Sustainable

Through strategic benefit planning, employers can keep coverage without having their spend go through the roof. The through-line is simple: lower the drug cost, add clinical oversight, and pick a partner whose incentives match yours.

Unlock Direct-to-Employer Pricing

In 2026, Eli Lilly and Novo Nordisk launched direct-to-employer programs that change the math on GLP-1 spend. Instead of paying thousands up front, employers can access lower-cost, direct-purchasing  products through enrolled manufacturer partners. SmithRx is one of the first PBMs to partner with select vendors that unlock these manufacturer programs.

SmithRx Offering Highlights:

• Access lower, per-month fill pricing capped at roughly $449, depending on drug and formulation.

• Get upfront discounts built directly into benefit design so members pay less at the pharmacy and plans don't wait on rebate returns.

• Pair preferred pricing with clinical oversight from leading obesity vendors to bolster long-term treatment success.

Choose a Transparent, Fiduciary-Aligned PBM

For crucial categories like GLP-1s, the PBM you choose determines how much of your cost you actually control. Work with a fiduciary-aligned PBM that has no incentive to add fees or steer members to fee-adding pharmacies, and instead passes through savings and shows you true plan costs.

Add Guardrails and Leverage Lower-Cost Options

Ending coverage is not the only response to rising spend. Employers can hold coverage in place and make it sustainable with the right structure and alternative treatments on the market. Two new oral weight management GLP-1s came to market in 2026, in January and April, with cheaper starting prices, easier storage and logistics, and more discretion for members.

• Add clinical review and clinical vendor requirements rather than dropping coverage outright.

• Route eligible members to alternative obesity treatments that carry lower starting prices.

• Support the full clinical picture through nutrition therapy, physical activity, behavior modification, and medical intervention.

“I see these medications kind of as riding with training wheels on … But you're gonna still be steering, you're still gonna be pedaling … lifestyle modification is really the foundation for everything that we do." - Elena Sullivan, MMSc, PA-C, Obesity Medicine Association

Frequently Asked Questions

Q: What is the July 1 Medicare change, and why does it matter for employers?

A: As of July 1, 2026, Medicare covers weight-loss medications for the first time for a select population that meets BMI and comorbidity criteria. Because commercial plans often follow Medicare's lead, this signals likely expansion of coverage in the commercial space, so benefits leaders should plan for it now.

Q: Should patients switch from an injectable GLP-1 to the GLP-1 pill?

A: It depends on the patient. Lilly's "Attain Maintain" trial showed patients switching from top-dose semaglutide to top-dose oral Foundayo maintained weight well, with about a 2 lb average gain, while those switching from top-dose tirzepatide gained more, averaging 11 lb. Oral options help with injection fatigue, storage, and discretion, though individual response varies.

Q: Are there more cost-effective alternatives to GLP-1s?

A: Older non-GLP-1 weight loss medications, which have been used since the 1960s, are often generic and cheaper, and can deliver roughly 5 to 10% weight loss. Meaningful weight loss can also be achieved through physical therapy, dietitian services, mental health and behavioral support, and health coaching.

Sustainable GLP-1 coverage comes down to controlling cost and grounding treatment in clinical reality. Employers who combine direct-to-employer pricing, a fiduciary-aligned PBM partnership, and comprehensive clinical support can keep this benefit in place for the members who need it without blowing budgets out of the water.

Ready to go deeper? Download our GLP-1 cost-containment resource for benefits leaders here.

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