Glucagon-like peptide-1 (GLP-1) medications have become a primary cost driverand coverage decision for employer pharmacy benefits, directly affecting plan budgets, premiums, and employee experience. The picture has changed since these drugs first dominated headlines: national supply has stabilized, while demand and cost continue to climb.

Plan sponsors and brokers who understand the science and economics behind GLP-1s can more confidently set coverage rules and better hold their pharmacy benefit manager (PBM) accountable to deliver cost and care-conscious coverage for these high-demand therapies.

What Is GLP-1?

GLP-1s (glucagon-like peptide-1 agonists) are a class of medications that help manage blood sugar and support weight and obesity management. They also have been shown to reduce the risk of cardiovascular events such as stroke and heart attack. The term GLP-1s commonly includes dual glucose-dependent insulinotropic polypeptide (GIP) and GLP-1 receptor agonists such as tirzepatide.

Brand-name GLP-1s such as Ozempic®, Trulicity®, and Victoza® have long treated type 2 diabetes. Weight loss, first observed as a side effect of diabetes treatment, brought the class mainstream attention. The U.S. Food and Drug Administration (FDA) has since approved products such as Wegovy® and Zepbound® for chronic weight management.

Media coverage and celebrity attention followed, alongside a rapid increase in patient interest and provider prescribing. A Healthcare Dive FAIR Health analysis of commercial claims found that the share of adults classified as overweight or obese that were prescribed a GLP-1 rose nearly 587% between 2019 and 2024.

As the rate of GLP-1prescriptions has risen, so has the cost to plans. The American Medical Association reports that national GLP-1 spending rose more than 500% from 2018 to 2023, underscoring the economic impact on payers and employers.

The national shortages that limited access in recent years have ended. FDA has resolved the national shortages of tirzepatide in October 2024 and semaglutide in February 2025. As of April 2026, neither drug appears on FDA's drug shortage list, although localized supply disruptions can still occur.

For employers, the central GLP-1 question has shifted from availability to cost and utilization management.

Why Plan Sponsors and Brokers Should Care About GLP-1s

The FDA has approved GLP-1s to reduce risk of cardiovascular events and to treat type 2 diabetes, obesity, and obstructive sleep apnea. The agency has also approved them to treat metabolic dysfunction-associated steatohepatitis (MASH), a form of liver disease.

Researchers continue to study the class for heart failure, kidney disease, and other chronic conditions. New formulations such as the oral Wegovy pill also widen the pool of members who may seek treatment. Each new indication and formulation expands the population potentially eligible for coverage under an employer plan.

Rising demand carries direct cost implications for employer plan sponsors. In the Business Group on Health's 2026 GLP-1 survey, nearly eight in 10 employers reported that GLP-1s are increasing their company's healthcare costs. At the same time, GLP-1s can deliver workforce benefits: members who achieve better control of diabetes and obesity may experience fewer complications that lead to hospitalization or extended sick leave.

It can feel like a lose-lose situation, but it doesn't have to be. With the right benefits partner, sustainable GLP-1 coverage that balances cost and member care is possible.

GLP-1 Cost Management, Coverage, and Demand

Rising costs are one challenge. Clinical fit is another, because GLP-1s do not produce the same results for every patient. About 14% of semaglutide participants in the STEP 1 clinical trial, published in 2021, did not reach the 5% weight-loss threshold used to measure clinical response, while some patients stopped treatment due to side effect intolerances.

Length of treatment and adherence also matter. Diabetes and obesity are chronic diseases with potential lifelong health consequences, and patients who stop GLP-1s early may not achieve lasting results. When members discontinue early, the plan may pay for therapy without realizing the intended clinical benefit.

All of these factors make GLP-1s a complex challenge for employers to tackle. The impact of drug coverage isn’t limited to price points and direct patient outcomes: a survey from 9amHealth revealed that 67% of Americans would prefer to stay at a job they don't like as opposed to starting a new job, just to keep insurance coverage for weight loss medications.

Managing Treatment Costs

Managing the costs associated with GLP-1 treatments involves strategic planning and transparent partnerships. It’s key that employers and brokers:

1. Decide if and how your plan will cover GLP-1s, and if so, whether for cardiometabolic diseases (including diabetes), obesity management, or both.

2. Use data to understand the current and forecasted demand for GLP-1s among your members to determine the potential benefits and costs for your plan.

3. Manage utilization through tools such as prior authorization and step therapy so members meet the plan's clinical criteria before starting GLP-1s. Pair these tools with care plans that support members in continuing treatment for lasting results. These standards typically tie coverage to a documented diagnosis and the FDA-approved indication, as outlined in these utilization management strategies for GLP-1s.

4. Ask your PBM about the available options for GLP-1s, and how each might affect your plan's costs, particularly rebates and copay cards. Some legacy PBM contracts retain a share of manufacturer rebates, which can favor higher-list-price drugs, so review your PBM's rebate arrangements and related agreement terms.

5. Compare net cost across channels, including direct-to-employer GLP-1 pricing where manufacturers offer it, and pair any lower-cost channel with the same clinical oversight.

GLP-1s are a clinically valuable treatment for diabetes and obesity. With supply now stable, the employer decision centers on cost, clinical criteria, and PBM alignment. By understanding these complexities and working with transparent partners like SmithRx, you can optimize healthcare benefits and manage costs effectively.

Through the SmithRx Weight Management Program, participating plans can access direct-to-employer GLP-1 pricing paired with robust clinical oversight by our care partners. When clinically appropriate, these partners prioritize lifestyle support and lower-cost therapies before GLP-1 medications.

To see how plan sponsors balance savings with member outcomes, watch our on-demand webinar with the Obesity Medicine Association.

Frequently Asked Questions

What percentage of employers cover GLP-1s for weight management?

In the Business Group on Health (BGH) 2026 GLP-1 survey, 67% of employers reported covering GLP-1s for weight management, and most reported diabetes coverage. BGH members are typically large employers, so coverage rates across the broader employer market may differ.

Why are some employers dropping GLP-1 coverage?

Rising cost is the central pressure: 10% of BGH survey respondents covering GLP-1s for weight management do not plan to continue that coverage in 2027. Employers that keep coverage often rely on strategies such as prior authorization and lifestyle program requirements to support appropriate use.

Are compounded GLP-1s still an option for employer plans?

Compounded semaglutide and tirzepatide now face tighter limits because FDA's temporary enforcement discretion for compounders ended between February and May 2025, after the shortages resolved. Plan sponsors should confirm with their PBM how the plan treats compounded products and which FDA-approved options it covers.

Do PBMs favor certain GLP-1 brands?

PBMs can prefer GLP-1 brands whose manufacturers pay rebates for formulary placement, and PBMs that keep a share may be incentivized to favor higher-priced drugs. Employers can ask their PBM to explain how drug rebates work under their contract and whether 100% of rebates pass through to the plan.

Does SmithRx cover GLP-1s like Zepbound and Wegovy?

We administer the pharmacy benefit each plan sponsor designs, so coverage of GLP-1s such as Zepbound® and Wegovy® for weight management depends on the employer's plan. SmithRx members can check plan information, prescription details, and prior authorization updates in the SmithRx Member Portal.