Companies that rushed to cover employees’ weight-loss drugs are facing rising costs and employee demand, leading to cuts in health care benefits or withdrawing funding altogether.
Since the advent of Ozempic, the ‘miracle’ weight loss drug has become increasingly popular over the past two years, leaving employers in a difficult situation.
One argument suggests that covering the drugs that can improve employee health will reduce long-term costs and even help with recruitment and retention.
However, drugs like Wegovy and Zepbound come with a high price tag, around $1000 a month, and can be used indefinitely rather than as a short-term solution to help lose weight permanently.
Some companies, such as the Mayo Clinic, are responding to the dilemma by implementing a $20,000 cap on spending per patient. employee.
Jason Krynicki, 41, had his Wegove prescription coverage reduced last month and is now using his retirement savings to pay for the drug
Drugs like Wegovy and Zepbound come with a high price tag, around $1000 a month
But others, including the RWJBarnabas Health system in New Jersey, are dropping their coverage all together.
The changes have left overweight employees frustrated with some says the Wall Street Journal they have been forced to dip into their retirement savings to cover their medical bills.
Jason Krynicki’s, a bariatric insurance coordinator in the RWJBarnabas Health system had his Wegovy prescription coverage cut last month.
Krynicki, 41, told the Journal he lost 47 pounds in less than a year by taking Wegovy, a subscription that cost him $25 a month while his health plan covered the drug.
But now his monthly losses exceed $1,000, leaving Krynicki using his retirement savings to cover the costs.
“It’s just not fair,” Krynicki, who is also a board member of the advocacy group Obesity Action Coalition, told the Journal.
RWJBarnabas Health stopped covering the drugs for weight loss, but not diabetes, because a significant percentage of employees discontinued use prematurely and gained back weight they had lost, a spokeswoman explained.
‘RWJBarnabas Health is not alone in making this decision.
Purdue University has limited its coverage of weight-loss drugs after use doubled between 2022 and 2023
‘Miracle’ weight loss drugs have become increasingly popular over the past two years, leaving employers in a difficult position
“Many employers have terminated coverage for weight loss medications,” the spokeswoman added.
Purdue University has limited its coverage of weight-loss drugs after use doubled between 2022 and 2023, and the weight-loss therapies accounted for about 2 percent of the university’s total health plan spending last year.
The university will now only provide coverage for the drugs to employees with a body mass index (BMI) of at least 30 or at least 27 with another health condition.
Workers must also lose about 5 percent of their body weight after three months to continue using.
The university is considering additional restrictions, including the possibility of requiring employees to obtain prescriptions from the employer’s clinic, which also offers nutrition, wellness coaching and mental health counseling.
The Mayo Clinic, a non-profit academic medical center, is also seeking to reign in rising costs, adding a $20,000 lifetime cap on weight-loss drugs per employee from 1 January.
North Carolina’s state employee health plan recently decided to eliminate reimbursement for GLP-1s for weight loss starting in April after seeing use of the drugs increase sevenfold over the plan since 2021.
“Just in a very short period of time, we’re going to spend more on this drug than we did on cancer treatments last year,” State Treasurer Dale Folwell told the Journal.
A spokeswoman for Novo Nordisk told the publication that North Carolina’s decision to end coverage was irresponsible, adding that obesity and related conditions increase health care costs in general.
Ozempic and Wegovy are basically the same drug, but each of the two brands contains a different amount of their active ingredient – semaglutide.
Originally developed to help treat diabetes, semaglutide proved to be an extremely effective appetite suppressant and is now widely used to aid in weight loss.