How to Maximize the Value of GLP-1 Drugs While Improving Health Equity

Julie Schulz, MD, MPH and Michael Dovidio, PharmD, Avalon Healthcare Solutions

One of the biggest news stories in the seemingly never-ending coverage of the blockbuster glucagon-like peptide-1 (GLP-1) drug came in early October 2024, when the US Food and Drug Administration (FDA) declared that the shortage of tirzepatide, sold under the brand names Mounjaro and Zepbound, was over.

The announcement was met with backlash from patients who had been obtaining lower-cost versions of the drug from compounding pharmacies. With the shortage resolved, compounding pharmacies can no longer make the drug, leaving the higher-priced name brands as the only option.

Due to the continued high cost, only patients with greater financial resources or those with generous employer-sponsored drug benefits will be able to afford the medications for obesity. This can exacerbate health inequities, likely driving significantly higher costs for public and commercial health plans, intensified by the new financial strain from weight loss medications.

Rather than denying coverage for GLP-1s for obesity, health plans could modify eligibility policies to require data from a standardized set of laboratory tests and other biometrics to identify patients in most need of GLP-1s and verify medical necessity. This approach would reduce inappropriate prescribing while ensuring that patients who are most likely to benefit from the drugs have access to them.

No End to Spending in Sight

Sales of GLP-1s and related drugs are projected to quadruple, reaching an estimated $142 billion by 2030, according to an August 2024 report from the data and analytics company GlobalData. Despite the anticipated arrival of dozens of new products in the coming years, these new entrants are expected to generate only $8.8 billion in sales, indicating continued dominance by the current high-cost brands and pharmaceutical companies.

Employers sponsoring employee drug benefits are also feeling the financial strain of GLP-1's growing popularity. A survey of large employers by the Business Group of Health, released just weeks before the FDA announcement, echoed these concerns. According to the survey, pharmaceutical costs rose by 6 percentage points between 2021 and 2023 among survey participants, who collectively employ over 17 million Americans. The survey also revealed that 76% of employers reported being “very concerned” with overall pharmacy costs.

The exponential growth of prescriptions led Blue Cross Blue Shield of Michigan to enact more stringent prior authorization requirements before covering the drugs for obesity, citing associated costs growing by $350 million between 2022 and 2023. Similarly, North Carolina’s State Health Plan announced it was dropping coverage of these drugs when prescribed for weight loss after spending $100 million on GLP-1s for weight loss in 2023. The nonprofit health plan estimated that continued weight-loss coverage could lead to a potential $1.5 billion loss by 2030.

Exacerbating Health Inequities

Eliminating all coverage of GLP-1s for weight loss is short-sighted given the numerous other long-term cardiometabolic benefits, as evidenced by recent studies demonstrating positive outcomes for patients with cardiovascular disease and chronic kidney disease. The drugs have also been shown to deliver neuropsychological benefits related to delaying cognitive impairment and managing substance use disorder.

Eliminating coverage potentially also increases health risks and inequities among vulnerable populations who are already underprescribed the drugs for their first FDA-approved indication: diabetes. For example, a study published in The Lancet Regional Health found that Asian patients across 6 US health systems were about 50% less likely to be prescribed a GLP-1 for their type 2 diabetes compared with White patients, while Black patients were 14% less likely, and Hispanic patients 31% less likely.

Conversely, expanding access to these drugs would likely improve health equity and, ultimately, save lives, according to a study published in the Proceedings of the National Academy of Sciences. Researchers estimated that more than 42 000 deaths in the US could be averted annually through broader access to GLP-1s, including more than 11 000 deaths among people with type 2 diabetes.

Curbing Overutilization

Health plans could expand prior authorization requirements in a verifiable, data-based method to ensure patients who require GLP-1s for diabetes or other FDA-approved indications would have coverage for the medication. Instead of relying on documentation from prescribers alone to verify medical necessity, which is often time-consuming, health plans could adopt a more data-driven approach, automatically incorporating lab-value data and other test results, such as HbA1C and lipid levels.

Seamless, electronic transfer of lab results would also allow for faster, more accurate determinations of patient eligibility while reducing the administrative burden on health care providers. This would curb overutilization and ensure that the right patients receive the right treatments.

Navigating Opportunities and Challenges

GLP-1s present enormous care quality improvement opportunities but also financial sustainability challenges for health plans and employers. The drugs undoubtedly offer life-changing benefits for patients struggling with obesity and cardiometabolic disorders. Yet their cost and potential overutilization financially threaten employers and health plans while exacerbating health inequities and yielding poorer outcomes for disadvantaged populations.

Innovative benefit eligibility strategies, such as expanding lab data criteria to manage utilization, will be critical in the coming years to address these challenges. By focusing on the right tests, treatments, and data-driven decisions, health plans can balance cost containment and patient care, ensuring that the benefits of GLP-1s are available to those who need them most.

About the Authors

Julie Schulz, MD, MPH, is vice president of product for Avalon Healthcare Solutions

Michael Dovidio, PharmD, is a product manager for Avalon Healthcare Solutions