Weight Loss Drugs Weigh Heavy on Employer Health Plans

Nomi Health analysis: GLP-1 drugs eat up nearly 10% of self-funded employers’ prescription costs

A meteoric rise in the popularity of glucagon-like peptide-1 (GLP-1) medications such as Ozempic, Wegovy and Mounjaro is creating financial challenges for employer-sponsored health plans. New data from Nomi Health, a company changing healthcare economics, reveals that spending on these diabetes and weight loss drugs went up 253% from 2020 to 2023, surpassing $1 billion last year and making up nearly 10% of total prescription costs for employers.

Nomi Health analyzed $33.9 billion in prescription drug claims from 17.2 million employees between Jan. 1, 2020, and Dec. 31, 2023, as part of its Trends in Spend series. This analysis, by Artemis, a Nomi Health company, and a leader in benefits data and analytics solutions, uses claims data to call attention to key shifts in healthcare spending.

The GLP-1 analysis builds on insights from last month’s Trends in Spend, which found prescription drugs constitute approximately 25% of employers’ overall spend on health benefits. While medical costs went up 5% from 2022 to 2023, spending on prescription drugs jumped 18% during that same period. GLP-1 medications are a major driver, with employers spending $1.14 billion on these drugs in 2023 as costs and utilization continue to rise.

According to the Trends in Spend tracker, the share of total drug expenditures attributed to GLP-1 medications climbed from 4% in 2020 to 5% in 2021, 7% in 2022, and 9% in 2023 of total drug spend. If this 2% annual growth continues, GLP-1 medications will be the costliest drug category within three years. Antidiabetic drugs as a group, including metformin and others, have already become the leading drivers of prescription costs, fueled by GLP-1 medications, which made up 56% of the $1.84 billion allocated to antidiabetic therapies last year.

Nomi Health's research also found:

• GLP-1 drug prices remained stable as prescribing rates exploded nearly 50% annually. The average cost per GLP-1 prescription held relatively steady at $1,100 from 2020 to 2023. However, employer spending soared due to heightened utilization, which rose by approximately 50% year over year during this period.
• Weight loss prescribing drives rapid GLP-1 growth. Nearly one in four GLP-1 prescriptions (24%) were written for weight loss in 2023, up sharply from just 10% in 2022, as new weight loss drugs like Wegovy hit the market.
• GLP-1 weight loss medications experience exponential growth. From 2022 to 2023, Mounjaro costs surged 976%, and the number of members with claims jumped 343%, while Wegovy costs rose 473%, and members with claims increased 444%. Prior to increased competition, Ozempic was the market leader, showing an 89% increase in costs in 2022 alone. Despite newer entries in the market, Ozempic was still among the top GLP-1 drugs from 2022 to 2023, experiencing the most significant increase in cost and utilization with costs up by 18%, and members with claims up 17%.
• Employers spent over $900 million on the top three leading GLP-1 drugs last year. In 2023, employers spent $372 million on Ozempic, $256 million on Mounjaro and $261 million on Wegovy prescriptions.

"Employers are getting clobbered by the runaway costs of these diabetes drugs," said Mark Newman, CEO of Nomi Health. "Though these drugs appear to deliver significant benefits, the financial burden on health plans is out of touch. Now more than ever, it’s crucial for employers to work closely with an analytics partner and a pharmacy benefit manager to develop a comprehensive drug management strategy. Getting ahead of this explosive trend must be a top priority for employers looking to balance cost containment and employee satisfaction.”

For more information about Nomi Health, visit nomihealth.com

Methodology

This is a retrospective cohort study based on an anonymized, aggregated set of 246.2 million prescription claims for 17.2 million insured members ages 0 – 102 from January 1, 2020, through December 31, 2023. Artemis, a Nomi Health company whose benefits analytics platform is recognized as one of the most robust in the industry, conducted this retrospective cohort analysis. The analysis is the latest in the Nomi Health Trends in Spend series, which investigates costs associated with different healthcare topics to turn healthcare spending insights into meaningful actions.

About Nomi Health

Nomi Health is powering a healthcare system that prioritizes those who matter most. The company simplifies the business of healthcare with payment rails and programs built specifically for self-funded employers, governments, and their partners, such as TPAs, brokers, and consultants.

At Nomi Health, our long-term mission is to rebuild U.S. healthcare to run at half the cost. Nomi delivers actionable analytics, direct access to medical and pharmacy services, and real-time payment rails to transform how providers deliver great healthcare to plans and programs.

Artemis by Nomi Health uses data-driven insights to elevate their benefits strategy offering companies actionable analytics to reduce spending, improve quality, and drive better outcomes for their members.

CerpassRx by Nomi Health combines industry-leading pharmacy tools and technology expertise with best-in-class PBM services and clinical offerings to create a boutique alternative to the traditional PBM model.

Founded in 2019, Nomi Health serves more than 3,200 customers nationwide, impacting 30 million lives and influencing over $150 billion in healthcare spend. Learn more at nomihealth.com.

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