A drug class known as GLP-1 receptor agonists or simply “GLP-1s” (e.g., Novo Nordisk’s Ozempic) has been used for several years to help control type 2 diabetes. Weight loss associated with its use was considered nothing more than a positive side effect until 2021, when the U.S. FDA approved a modified version of Ozempic (marketed as Wegovy, also from Novo Nordisk) for weight loss. Utilization has skyrocketed as news coverage, celebrities, medical professionals, and social media influencers promoted the drug.

Overview

Obesity, defined by the World Health Organization as any Body Mass Index value equal to or greater than 30, is one of the world’s most common chronic medical conditions and a risk factor for several of the world’s most common causes of premature death: heart disease, stroke, diabetes, and certain cancers.

Historically, the most commonly prescribed methods to prevent and treat obesity were non-pharmaceutical interventions like diet and exercise, including structured programs offered by a weight loss industry valued at $192 billion.

Drugs indicated for weight loss have been launched before, but they were challenged by limited efficacy and adverse side effects. This poor experience, combined with a commonly held view of obesity as a “lifestyle choice”, led many public and private insurance plans around the world to categorically exclude weight loss drugs.

Wegovy’s approval by the U.S. FDA (June 2021), UK MHRA (September 2021), Health Canada (November 2021) and the European Medicines Agency (January 2022) has raised hopes for people living with obesity and made Novo Nordisk continental Europe’s second most-valuable public company (after LVMH).

However, the drug’s high cost has presented a conundrum for employers, insurance plans, and governments.

United States

In the U.S., where many firms in the professional services industry self-insure their employee health benefit plans and therefore have significant influence over their provisions, coverage for weight loss drugs is still limited by the aforementioned exclusions. For example, a pulse survey of our client law firms in August found only 35% of those firms offering coverage today. However, 45% said they are actively reevaluating their position.

Firms that already cover weight loss drugs are considering additional measures to protect their plans’ finances. Examples include prior authorization criteria to ensure appropriate use (i.e., checking BMI and presence of comorbidities) and non-traditional step therapy requirements, such as requiring the participant to attempt to achieve a healthy weight by participating in a mindful eating program before being approved for weight loss drugs.

Even if employers continue to exclude weight loss drugs from their prescription drug benefits, it is important for them to consider that there may still be “off-label” (when a doctor prescribes a medication for use other than its approved indication) use of GLP-1s like Ozempic that are also indicated for diabetes. Pharmacy benefit managers have been introducing prior authorization criteria to curtail this practice.

Canada

Canadian firms and their insurers, as well as provinces with publicly funded prescription drug coverage, are grappling with a similar pattern of off-label use of Ozempic to treat obesity. This is due to both limited coverage and limited supply.

Like their U.S. counterparts, professional service firms operating in Canada are likely to have a choice in covering weight loss drugs under their prescription benefits. According to Medavie Blue Cross, 50% of their employer groups already do, which will increase pressure from plan participants on those who do not. Weight loss drugs are typically not covered by individual market plans or provincial programs like Quebec’s RAMQ or British Columbia’s PharmaCare.

United Kingdom

Unlike in Canada, prescription drug coverage is a component of the UK’s national single-payer healthcare system. As of September, this coverage includes Wegovy, though it is subject to strict prior authorization criteria centered around having a BMI of 35 or higher and the presence of a weight-related comorbidity like hypertension or heart disease where a lower BMI threshold may apply in some circumstances. Consistent with regulatory guidance, the NHS will require Wegovy to be taken alongside a reduced-calorie diet and increased physical activity.

The UK’s largest private health insurers, including those who market their plans to employer groups, said they will not cover Wegovy, citing long-standing exclusions for weight loss drugs. Therefore, those who are prescribed the medication will either need to meet the NHS criteria or pay out-of-pocket.

Aon’s Perspective

At Aon, we view obesity as a chronic medical condition and we therefore greet innovations in the treatment of obesity with enthusiasm. Our practitioners are helping professional service firms, especially those operating in North America, (re)frame their position toward weight loss drugs with a long-term focus on the wellbeing of their populations and the economics of their benefit plans.

Future Outlook

The rollout of Wegovy in the above countries has been stunted by supply constraints that are also impacting its sibling medication Ozempic. The full financial impact of Wegovy and future GLP-1s marketed for weight loss will not be known until the supply chain stabilizes. It will only be several years after supply and demand reach equilibrium that we will be able to understand whether payers are receiving any return on investment associated with covering these medications (e.g., fewer hospitalizations and surgeries driven by weight-related conditions).

As for the medications themselves, trials are underway to determine whether GLP-1s should be used to treat other chronic conditions like heart disease. At the same time, Canadian and British regulators are investigating reports that Wegovy led to suicidal ideation among its patients.

Contact

For more information about long-term care and how Aon can help, please send an email to [email protected] or reach out directly to Mark Scarafone or Jake Delman.





Mark Scarafone
Senior Vice President and Health & Benefits Leader
Radnor, PA







Jake Delman
Senior Consultant
Washington, DC

The information contained herein and the statements expressed are of a general nature and are not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information and use sources we consider reliable, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.