Pharmacy Benefits Uncut

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A few months ago, I shared four strategies to help employers manage their GLP-1 spend. Today I’m sharing an updated version of this newsletter which includes discussions on direct-to-employer programs for purchase of GLP-1’s and emerging information on side effects of these drugs.

Like most employers, your pharmacy benefits plan has probably been upended over the last few years by the introduction of GLP-1 drugs. These drugs (Ozempic, Wegovy, Mounjaro, and Zepbound) were originally developed for the treatment of Type 2 diabetes, but their effectiveness in helping people lose weight has led to their use as anti-obesity medications and vastly increased demand. It’s estimated that 42% of adults under the age of 65 (almost 50 million individuals) with employer-sponsored health insurance could be eligible for GLP-1 treatment. And with the cost of these drugs ranging from $1000 to $1300 per plan member per month, it’s easy to see how providing access to them could rapidly become financially unsustainable for most employers.

So today I’m sharing four important strategies that you can use to manage your GLP-1 spend while also ensuring fair access to these medications for your plan members.

Let’s dive in.

Strategy #1: Establish Evidence-Based Coverage Criteria

Although GLP-1’s are indicated for the treatment of Type 2 diabetes alongside other interventions, as well as the management of obesity based on body mass index (BMI), it’s important for you as an employer to establish your own criteria to determine which plan members will receive reimbursement for GLP-1 therapies.

To do this, you need to conduct an independent review of evidence on clinical effectiveness, cost-effectiveness, and safety of GLP-1’s. You can’t simply rely on the FDA-approved indications since they’ve rapidly expanded in recent years and in many cases include conditions that could be treated with cheaper, equally effective alternatives. For example, many individuals with Type 2 diabetes could have their condition controlled with the use of older, much cheaper drugs such as metformin even though they would be eligible for GLP-1 therapy based on FDA approvals.

An important aspect of establishing coverage criteria is developing step therapy protocols to ensure your plan members have tried effective, less expensive therapies prior starting on a GLP-1. Using the above example, a step therapy protocol could be implemented requiring plan members with Type 2 diabetes to have tried metformin and experienced an inadequate response before being eligible for GLP-1 coverage.

Strategy #2: Comprehensive Clinical Programs

GLP-1’s are not a silver bullet in management of Type 2 diabetes or obesity. Successfully managing these chronic conditions requires a targeted, comprehensive approach that goes beyond simply providing access to a medication.

As part of this approach, you need strategies to support adherence to medications as well as lifestyle changes aimed at weight loss and decreasing this risk of poor health outcomes associated with Type 2 diabetes and obesity (e.g. heart disease).

You may be surprised to learn that up to two-thirds of people who start GLP-1 drugs stop taking them within a year. Several reasons could contribute to plan members quitting these medications: high cost even with insurance because prescription co-pays are often prohibitively expensive; weight loss plateaus; bothersome side effects such as nausea, vomiting, diarrhea or constipation or more severe conditions such as pancreatitis or bowel obstruction. Providing your members with access to clinical pharmacy services to help them persist with these therapies or discontinue them where appropriate is imperative to ensure they reap their full benefits and avoid adverse effects.

Programs focused on healthy eating and incentivizing physical activity should be offered to plan members with the goal of achieving long-term behavioural changes promoting good health. These behavioural modifications are particularly important to maintaining weight loss in members who end up stopping their GLP-1 drugs.

Recently new evidence on GLP-1 side effects has come to light. I mentioned some of the well-known side effects of these medications above, but lately there have been concerns raised about other possible side effects including increased risk of psychiatric conditions (e.g. anxiety, depression, and suicidal thoughts); increased risk of new chronic cough; and a small increased risk of severe, potentially fatal pancreatitis. Although we need more data to definitively establish whether GLP-1’s are indeed associated with these side effects, it’s important for prescribers to be aware of them and weigh risks versus benefits when deciding whether to initiate a plan member on one of these drugs.

Perhaps most importantly you need to understand that GLP-1’s don’t address the underlying cause of obesity, which results from consuming excess calories. This is apparent as most people using GLP-1’s for weight loss who stop taking them quickly regain the weight they lost while on the drug. As mentioned above, you need to help your plan members tackle the root causes of obesity and not simply ignore this important aspect of care because GLP-1’s can be used to treat this condition.

Strategy #3: Don’t Rely on Your PBM

As I’ve said many times before, you can’t rely on your PBM to contain drug costs. PBMs, particularly ones that operate on the traditional model make more money as your drug spend increases. Needless to say, your members’ use of expensive GLP-1’s is a financial boon to your PBM and entrusting them to manage the costs of these drugs is the precise definition of asking the fox to guard the henhouse.

If feasible consider carving out your GLP-1 medications from your PBM contract. This will allow you to work with a separate vendor to manage GLP-1 therapies for your members. Alternatively, you could use a cash-pay strategy. The GLP-1 manufacturers Novo Nordisk (Ozempic) and Eli Lilly (Mounjaro and Zepbound) have direct-to-consumer platforms that provide home delivery of these medications for cash-paying patients, and you can then reimburse this cost to your members through an HRA. Both of these options are likely to be far less expensive for most employers than obtaining GLP-1’s though your PBM.

If carving out GLP-1’s is not an option for you, work with your PBM on a strategy to obtain the lowest net cost for GLP-1’s instead of relying on rebates to manage their cost.

Update: Offering access to GLP-1’s may now be cheaper than ever. Eli Lilly and Novo Nordisk, the manufacturers of Zepbound and Wegovy respectively, recently announced that employers can start purchasing these drugs directly from them through a partnership with Waltz Health, rather than through their PBM. They’ll offer these GLP-1’s at a fixed price, allowing you to bypass your PBMs and avoid the rebates and schemes that contribute to high drug prices. Although these manufacturers aren’t sharing the negotiated prices of their drugs, the direct-to-employer model likely represents considerable savings compared to purchasing these drugs through your PBM.

Strategy #4: Monitor Utilization and Iterate

Be sure you have access to ALL your data on GLP-1’s. Evaluate individual plan member-level data on utilization, cost, adherence, discontinuation rates, and participation in clinical programs. This information will give you valuable insights into whether your plan members are experiencing the intended benefits of GLP-1’s and what kind of return on investment they’re providing both to individual plan members and in terms of overall value to the plan.

This data will also help refine your GLP-1 strategy. For example, if you find that many plan members using GLP-1’s for weight lost are stopping them because of side effects, you may want to focus on developing clinical programs focused on lifestyle modifications for these members rather than prioritizing access to GLP-1’s.

The Bottom Line

GLP-1’s are expensive therapies with high plan member utilization rates and, like it or not, they’re here to stay. Here’s what you need to do to manage their costs and provide fair access to your plan members: implement evidence-based reimbursement criteria; provide clinical and lifestyle support to ensure plan members have the greatest chance of success with their therapy; focus on schemes to obtain these medications for the lowest net cost; and analyze your data to hone your approach to GLP-1 access. Using these strategies along with staying informed of emerging clinical evidence on these therapies and new mechanisms to purchase them at the lowest net cost will help your plan members achieve the best possible health outcomes with these drugs at the lowest possible cost.

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Pharmacy Benefits Uncut is produced by Healthcare Decision Making, a consultancy that helps small and medium sized employers optimize their pharmacy benefits plan. We offer a comprehensive range of services focused on three areas: PBM procurement, ongoing management of your pharmacy benefits plan, and self-policing and oversight of your pharmacy spend. To learn more about how Healthcare Decision Making can help you, email Nina Lathia at nina.lathia@healthcaredecisionmaking.com