Rising Demand for GLP-1 Weight-Loss Drugs Driving Up Workplace Insurance Costs

The rising demand for expensive GLP-1 weight-loss drugs like Wegovy and Ozempic is causing a significant increase in the cost of workplace insurance, potentially leading to reduced benefits for employees next year. Experts are predicting that employers may have to make tough decisions in the face of ever-increasing healthcare costs.

According to the Business Group on Health, healthcare costs are projected to jump nearly 8% in 2025, compared to a 7.2% increase this year. This comes on the heels of a recent estimate by global benefits firm Aon, which predicts a 9% surge in employer health costs next year.

The skyrocketing costs of specialty drugs like GLP-1s and gene therapies, as well as the growing demand for outpatient care and medical services, are major factors contributing to the increase in healthcare spending. Drug spending now accounts for 27% of companies’ overall healthcare spend, up from 21% just two years ago.

Employers are feeling the pressure to control costs, with many already making changes to their pharmacy benefit managers and considering other cost-saving measures. Some are looking to crack down on the utilization of high-cost drugs like GLP-1s, while others are exploring changes to their health and well-being vendors and health plans.

As employers navigate these challenges, the big question remains: how much of the cost increases will be passed on to employees? While some changes to cost-sharing provisions may be inevitable, large companies are still looking to minimize the impact on their workers while offering robust benefits.

In the face of rising healthcare costs, employers are facing tough decisions about how to balance the need to control expenses with the desire to provide quality benefits to their employees. The coming year will be a critical time for employers to reassess their healthcare strategies and find innovative solutions to manage costs while maintaining employee satisfaction.