GLP-1 medications like Ozempic, Wegovy, Mounjaro, and others are continuing to gain traction for use as weight loss drugs, but they can come at a price: Out-of-pocket costs can run between $900 and $1,400 monthly without insurance. The growing demand is driving up expenses for some  employers too — but that could change.

High up-front costs 

According to data from Mercer, prescription drugs represent the fastest growing facet of health benefit costs, with costs per employee rising 7.2% in 2024, due in part to GLP-1s.¹ About one in three (34%) corporate insurance policies cover GLP-1s for weight loss purposes, and companies that do could be paying about $650 a head each month.² In fact, in the last two years the rising costs of GLP-1s has outpaced even expensive drugs used for treating cancer and autoimmune conditions.³

But new research shows that initial spike in expenses could be short-lived and a potential return on investment for more than pharma companies — as the health of workers taking the meds improves, employers may see some corresponding economic returns in the long-run too.⁴

Read more: What does an HSA cover?

A healthier bottom line

In a study analyzing commercially insured Americans with similar health conditions, medical costs for people taking GLP-1s were reduced by 7% compared with workers not taking the medication. But there’s a catch: It takes about two years to see the drop.⁵

Obesity affects almost 40% of U.S. adults, contributing to more than 60 chronic conditions that cost up to $1.72 trillion annually to treat.⁶ Many GLP-1 users see higher than normal medical bills during the first 12-15 months of taking the drugs, with added expenses such as frequent doctor visits to monitor treatment and address related sleep, esophageal, and other issues.⁷

A shift occurs at about the two-year mark: Patients taking GLP-1s experience a 44% reduction in major cardiovascular issues, as well as substantially less osteoporosis and fewer incidents of several types of pneumonia.⁸ These improved outcomes seem to be cutting the medical cost trend for employers. Findings from The Journal of the American Medical Association show that losing just 5% of body weight might equate to an 8% savings in health care expenses, roughly $670 per year — and losing as much as 25% of body weight could mean $2,849 in annual savings per individual.⁹ 

Read more: GLP-1 medications: Transforming health and spending habits

Is savings sustainable? 

While the development is encouraging, the potential for long-term savings isn’t necessarily as straightforward as it seems. Costs can vary considerably based on the overall health of a worker taking the medication, and drop-off rates can throw off the cost-benefit equation too. More than half of patients never make it to the two-year mark, stopping use of GLP-1s within a year, with side effects, affordability, or a perceived lack of advantages reported as reasons.¹⁰

Still, the door is open for more economic gains in the future. In addition to being used for weight loss, some of these drugs are now being studied as treatments for a wide range of other conditions, including kidney disease, sleep apnea, and Alzheimer’s, which potentially could further influence the direction of medical costs.

Read more: Shifting American spending habits