Employers balk at cost of Ozempic as pressure builds for weight-loss drug coverage

The next flashpoint in employer-sponsored health benefits is here: whether companies should foot the bill for blockbuster weight-loss drugs like Ozempic. As the Wall Street Journal reports, firms are split over the cost-benefit calculus of covering GLP-1 medications, with many limiting access or cutting coverage altogether.

The decision carries weight—both financial and cultural. While drugs like Ozempic and Wegovy can cost upwards of $500 per month, they’re touted as transformational in combating obesity and its related health risks. Yet employers worry the investment will not pay off shold workers leave before savings on long-term conditions materialize.

“Does a GLP-1 pay for itself? The answer is, no,” said Robert Andrews, CEO of the Health Transformation Alliance, which includes members like JPMorgan Chase and Coca-Cola. Andrews’s research shows reduced heart attacks and ER visits among users with diabetes—but not enough to offset the $650 monthly per capita cost after rebates.

Some companies are restricting GLP-1 coverage to diabetic employees or requiring participation in weight-loss programs. Meanwhile, states like Massachusetts are expanding Medicaid coverage for obesity treatment, signaling shifting public norms.

Advocates argue coverage is now a workplace equity issue. “That’s a lot of mighty good people who have a lot to offer,” said Millicent Gorham, CEO of the Alliance for Women’s Health and Prevention, warning that employers risk alienating a significant portion of the workforce.

Generic alternatives could lower costs by as much as 80 percent by 2027, according to health economist Rena Conti, potentially again reshaping the benefits landscape.