Significant increase in demand for obesity care benefits

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Article published on May 26, 2023 on Fierce Healthcare

Employers are seeing surging demand from their workers for benefits that cover obesity treatment and this is opening up considerable market opportunities for virtual care players.

Increasingly, as part of this focus on metabolic health, there is excitement around new and emerging obesity medications like semaglutide (Wegovy) and tirzepatide (Mounjaro). But drugs like Ozempic and Wegovy come with a hefty price tag, at least $1,000 per month. Neither drug is covered for weight loss by most insurance plans.

Semaglutide, which is sold under the brand names Ozempic, Wegovy and Rybelsus, accounted for $10.7 billion in drug spending in 2021, up 90% over the year before, which ranked it fourth among drug expenditures, according to a study published last year in the American Journal of Health-System Pharmacy.

A recent survey found that 44% of people with obesity would change jobs to gain coverage for treatment. And more than half of workers would stay at a job they didn’t like to retain that coverage.

Obesity Action Coalition Survey

Last year, the American Gastroenterology Association recommended coverage of weight loss drugs for those with BMI (body mass index) over 30 or BMI over 27 with complications. Currently, about 42% of people in the U.S. are obese, or have a BMI of 30 or higher, according to CDC data.

Health plan sponsors are facing increasing pressure to cover these medications. If these drugs are used by a substantial portion of those with obesity, the increase in medical costs will be high, according to Jeff Levin-Scherz, M.D., managing director and population health leader at insurance services company Willis Towers Watson (WTW). 

And these advances in game-changing obesity drugs come as employers are already facing the highest medical inflation rate in decades.

Virtual care companies are now jumping into the market as they see big opportunities to combine prescriptions for GLP-1 drugs with online programs that focus on lifestyle and behavior change. The idea, digital health executives say, is to improve long-term clinical outcomes and ultimately reduce costs by helping people keep the weight off.

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