Employers see higher costs and trim GLP-1 coverage
About 14% of employers in the United States have already or plan to drop GLP-1 drugs in 2027, as companies see rising healthcare costs, according to a survey released on Tuesday by the Business Group on Health.
Healthcare costs are set to increase 9.2% if employers do not make changes to manage costs in 2027, up from 8.5% in 2026, the group said. Two-thirds of employers surveyed said they saw rising utilization of the drugs.
Pharmacy spending and major cost drivers remain under pressure
The Business Group on Health is an organization advocating for employer health policy and benefits solutions. The group has seen consecutive increases in expected costs since 2022.
Kelsay said increased costs for hospitals, pharmacy costs and policy changes have all contributed to rising spending on healthcare by employers. The cost pressure has pushed more employers to encourage use of cheaper biosimilars, drop coverage for complex or specialty drugs, and explore alternative pharmacy arrangements.
Pharmacy costs made up 25% of employers' healthcare spending and are expected to rise by 12% in 2027, unchanged from the year prior.
The share of employers covering GLP-1 weight-loss drugs dropped from 72% in 2025 to 60% in 2026. Brenna Shebel, vice president for the Business Group on Health, said most companies offering the drugs for weight loss are not yet seeing them reduce costs of treating conditions associated with obesity, such as diabetes or sleep apnea.
Employers surveyed ranged from those employing fewer than 5,000 to over 100,000 people.
By condition, cancer was the most frequently cited condition driving healthcare spending, with 70% of firms naming it as their most acute cost driver, up from 58% in 2025.
Musculoskeletal and cardiovascular conditions followed as top drivers for companies. Business Group on Health said treatments for the conditions involve more complex therapies.
Weight-loss drug coverage declines as employers look for savings
GLP-1 weight-loss drugs, such as Novo Nordisk's Wegovy and Eli Lilly's Zepbound and Foundayo, help people lose weight by mimicking a hormone that keeps the stomach feeling full. Zepbound and Wegovy cost $499 and $1,349.02, respectively, per month according to list prices on manufacturer websites.
“\This represents an unfortunate new reality for employers, who now face growing difficulty in budgeting and forecasting," said Ellen Kelsay, president of the Business Group on Health. "It’s a call to take a more disruptive approach and rethink how to deliver value and improved health outcomes.”
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