How Employers Can Optimize Benefits in the Era of GLP-1s

Macro trends (medical, economic, and cultural) can sway the world of employer-sponsored health benefits. One of the biggest trends reshaping the pharmacy benefits space today? It’s just one class of medication: GLP-1s.

Glucagon-like Peptide-1s, or GLP-1s, include high-profile brand names such as Ozempic, Wegovy, and Mounjaro. These drugs have transformed from primarily being used to manage diabetes to a widely sought-after tool for metabolic health and weight loss. While these medications can offer meaningful clinical benefits for members—and are an important component of workforce wellness—they are also creating unprecedented pressure on pharmacy benefit plans. 

Employers are seeing a massive rise in both utilization and cost. Data shows that 64% of large firms report that GLP-1 drug coverage for weight loss has moderately or significantly impacted their prescription drug spending. In a healthcare environment already defined by rising costs, the GLP-1 surge presents a critical challenge that requires a strategic, forward-thinking approach to plan design and cost containment.

The GLP-1 Surge: What Employers Need to Know

What Are GLP-1 Medications?

GLP-1 receptor agonists are a class of medications that mimic a natural hormone in the body, which helps regulate blood sugar, slows digestion, and signals feelings of fullness to the brain.

Last Reviewed: Q4 2025

Originally developed to treat Type 2 Diabetes, GLP-1s have since gained FDA approval for a variety of diseases, with new indications continually emerging. These medications offer significant clinical benefits, including weight loss and improved blood sugar control. With over 40% of US adults classified as obese and 11.3% living with diabetes, GLP-1 treatments offer a powerful tool to improve long-term health.

However, the cost and utilization of these powerful drugs require careful planning. Notably, the use of GLP-1 agonists was higher than expected for over half (59%) of employers with over 5,000 workers. To manage outcomes and costs, one in three (34%) firms now require employees to participate in lifestyle or clinical support programs before allowing clinical approval of GLP-1 agonists for weight loss.

Why Demand Is Skyrocketing

The demand for GLP-1s is being fueled by several key factors: 

• Broadening Eligibility: As the FDA approves new indications, the clinically eligible population of Americans—already vast—is expanding. The 2% of adults now taking GLP-1s specifically for an overweight or obesity diagnosis represents a 587% increase over the last five years.

• Cultural Awareness and Marketing: High-profile media attention, celebrity endorsement, and powerful direct-to-consumer (DTC) marketing have brought GLP-1s into the public consciousness.

• Market Players: The rise of new models like virtual-first care and organizations like Hims/Hers offering access to weight management programs—including compounded or prescription GLP-1s—further drives awareness and accessibility, increasing demand for employer coverage.

Crucially, employees want and need coverage for these medications or other weight management solutions. Over two-thirds (67%) of Americans say they would prefer to stay at a job they don't like rather than start a new job, just to keep insurance coverage for weight loss medications.

The Financial Impact of GLP-1s on Employer Plans

Higher Average Costs

The primary concern for employers is the sheer cost of the medication. The list price for a month's supply of a brand-name GLP-1, without insurance or rebates, is sitting between $1,000 to $1,600.

GLP-1s for weight management are now accounting for an average of 10.5% of total annual claims for employers in 2025, up from 8.9% in 2024 and 6.9% in 2023. Drugs targeting weight management accounted for 46.8% of the 2024 increase in total drug spend.

Because GLP-1s can require long-term use, if not indefinite in some cases, to maintain health benefits, this high cost dramatically increases the cumulative financial burden on employer plans.

Key Strategies for Employers to Optimize Benefits

While the financial pressure of GLP-1s is undeniable, employers are not powerless. By implementing strategic plan design and utilization management, organizations can balance financial stewardship with providing necessary, high-quality employee care. Your goal as an employer is to partner with a PBM who ensures that these powerful drugs are used appropriately and sustainably—and that requires the right pharmacy benefit and care partners.

Evaluate Clinical Appropriateness

The most immediate strategy for cost containment is rigorous clinical oversight to limit inappropriate use. Type 2 Diabetes and Obesity are complex medical conditions, and medication coverage should reflect a documented clinical and appropriate need. 

• Require Documented Diagnosis: Coverage should be strictly tied to FDA-approved indications. This typically means requiring a documented diagnosis of Type 2 Diabetes or meeting specific Body Mass Index (BMI) thresholds per the FDA label. That being said, BMI is just one part of the equation and often doesn’t reflect a patient’s entire medical story.

• Prior Authorization (PA) Criteria: Implementing strong, evidence-based prior authorization criteria is crucial to manage access responsibly. PA ensures that the drug is medically necessary and that patients have attempted other front-line therapies (like low-cost generics and lifestyle programs) if clinically appropriate.

• Benefit Design & Custom Copays: To encourage appropriate use and shared financial responsibility, consider partnering with a PBM that can customize member cost-sharing based on the client’s goals.

• Coverage of Low-Cost Anti-Obesity Treatments: Adding GLP-1s for weight loss is a massive step and cost-leader for most businesses. If your team isn’t ready yet to cover GLP-1s for weight loss, simply covering low-cost alternative oral weight loss medications is completely acceptable and still can provide successful clinical outcomes. You still give clinically appropriate options to members, while giving you more time to make an informed decision on your GLP-1 strategy for the weight management category. 

Lifestyle & Behavioral Programs as a Stepping Stone

For long term health, GLP-1s are best used with a comprehensive metabolic health strategy. By pairing medication with patient-first care, employers can improve long-term outcomes, adherence, and potentially reduce reliance on expensive drugs over time.

Integrate GLP-1 coverage with robust, wraparound support, such as condition management programs, nutrition counseling, and wellness coaching. This structure acknowledges that "there's more to weight loss than GLP-1s" and addresses the root cause. At SmithRx, we partner with care support experts like 9amHealth and Form Health to support members on their weight management and type 2 diabetes journeys.

Data shows the clinical value of this approach. For example, some programs have demonstrated that members who don’t take GLP-1s but do engage in intensive lifestyle modification still achieve significant weight loss (around 9% loss after one year, according to data from one of our partners). This integrated model ensures members get the best possible outcome, with or without GLP-1s.

The Role of PBMs in Managing GLP-1 Utilization and Costs

Success of your GLP-1 strategy hinges directly on your Pharmacy Benefit Manager’s (PBM) model and its alignment with your goals. It’s essential you partner with a PBM that can evolve from a simple processor to a true partner focused on net cost and clinical quality.

Transparent Pricing Models Matter

For high-cost medications like GLP-1s, the traditional PBM model—which often relies on spread pricing or retaining rebates—can obscure the true net cost.

• 100% Pass-Through PBMs: Working with a modern, 100% pass-through PBM (like SmithRx) ensures you can understand the actual cost of medications. This transparent model eliminates hidden markups, where costs might be artificially inflated before being passed to the plan sponsor, and removes the incentive for PBMs to prioritize higher-cost drugs.

• Focus on Net Cost: For high-value claims, transparency ensures that every discount, manufacturer copay card, and negotiated price is applied directly to the employer’s benefit, preventing spread pricing on GLP-1 claims.

SmithRx’s Approach to GLP-1 Management

At SmithRx, we recognize being sustainable with GLP-1s requires balancing clinical oversight and cost-effectiveness. Our approach is designed for achieving sustainable impact by integrating robust clinical oversight with a transparent financial model.

We help employers find the best solution based on their needs and goals where patient needs and financial reality align. This is achieved through a multi-faceted pathway:

• Robust Clinical Review: We’ve built a risk-based clinical criteria policy that evaluates  the entire member’s profile such as their other medical conditions and past medications to ensure the right patients get the most appropriate medication for their unique situation. Our team uses the most up to date clinical criteria and evidence to guide our decisioning for successful outcomes.

• Pathway to Lowest Net Cost Options: Our system is designed to identify the lowest net cost options for the plan sponsor. This means guiding members toward clinically effective drugs that may have lower prices or better net economics for the plan. Our program leverages partnerships with lower price avenues to achieve substantial savings. This model can achieve incredible plan savings compared to the average industry cost, by focusing on the net cost—not just “discounts”.

By combining the comprehensive care beyond medication of our partners, like Form Health and 9amHealth, with our commitment to transparent cost control, SmithRx helps employers provide this life-changing medication class responsibly.

Ready to take control of your GLP-1 spend and enhance member outcomes? Learn more about our Weight Management programs or get the recap of our recent webinar with 9amHealth all about balancing cost with care.