Employers face a new GLP-1 question: Are the drugs worth it?

• Key Insight: See why major employers are struggling to negotiate prices with consolidated hospital systems.
• What's at Stake: Workers risk losing wage increases if employers cannot curb rising healthcare expenses.
• Forward Look: What's coming: Employer experimentation pairing GLP-1 coverage with lifestyle management support.
  Source: Bullets generated by AI with editorial review.Source: Bullets generated by AI with editorial review.

Employers have spent years arguing over how much GLP-1 coverage should cost. A harder question is starting to take over: Is it paying off? 

Bank of America's recent disclosure that it spends more than $250 million a year on the drugs — out of a roughly $2 billion healthcare budget — has sharpened that question across the industry, where 8 in 10 employers already say GLP-1s are driving up costs.

Ali Diab, CEO of Collective Health, said most employers still can't answer it. Pharmacy claims and medical claims typically live with separate vendors, so few companies can see whether a member's drug costs are being offset by better outcomes elsewhere. 

Diab recently spoke with Employee Benefit News about what's missing from most ROI conversations, why adherence matters as much as prescriptions, and what benefit leaders should do before touching eligibility rules this open enrollment season. This interview has been edited for length and clarity.

What are employers getting wrong about measuring the value of GLP-1 coverage today?
I'd actually reframe the question. Most employers are structurally set up to only see half the picture. Pharmacy claims live with one vendor, medical claims live with another, and those two systems were never built to talk to each other. So an employer sees a member's GLP-1 script get more expensive every quarter, and separately, if they're lucky, they might see that same member's ER visits or A1C numbers improve a year later. But almost nobody is connecting those two data points to the same person. You end up managing a total-cost-of-care drug as if it were a pharmacy-only line item, because that's the only view your vendor stack gives you.

How can employers tell whether GLP-1 use is reducing other healthcare costs, rather than simply adding another expensive benefit?
Follow the member, not the claim. Look at what happens to that person's ER visits, other utilization, and clinical markers like A1C over 12, 18, 24 months, not just this quarter's drug spend. This is exactly where self-insured employers have an advantage they often don't use. When you own your own data instead of renting a view of it from a fully insured carrier, you actually have the keys to connect pharmacy and medical claims for the same member. Most employers have access to this data but either don't know how to use it or don't have a partner helping them connect it.

What data are employers typically missing when they try to connect GLP-1 use with outcomes and overall healthcare spending?
Adherence is the big one. Are people staying on the drug long enough to see a benefit, or cycling on and off it? Beyond that, it's the context around the drug: do these members have access to nutrition support or coaching alongside the prescription. A GLP-1 prescribed in isolation and a GLP-1 prescribed alongside lifestyle modification are two different bets, financially, even though they show up identically on a pharmacy invoice.

How big of a problem is discontinuation or weight regain when employers are trying to calculate the ROI of these drugs?
It's one of the biggest variables in any honest ROI model. If your savings assumptions are built on sustained treatment, you have to also build in what happens when people stop or regain weight after stopping, or your numbers will drift further from reality every quarter. GLP-1s can absolutely deliver value. The employers who get burned are the ones who modeled a single, uniform treatment path across their whole population instead of the real, messier one.

Is there a point where the savings from preventing diabetes, cardiovascular disease or other conditions could outweigh the cost of the drugs?
Potentially, especially for higher-risk populations. But employers need to be honest about the timing mismatch: the drug cost hits this year's budget, and some of the payoff might not show up for years, sometimes after that employee has already moved to another company and another health plan is the one who benefits. That mismatch is exactly why waiting for the big lagging outcome (a heart attack avoided, a diagnosis delayed) is the wrong way to measure this. Employers need leading indicators they can see now, not a bet they can only settle in year five.

Are you seeing employers change coverage or eligibility rules because they don't have enough visibility into outcomes, and what would you tell a benefits leader heading into open enrollment facing that same pressure?
Yes, and it makes sense why. When you can't see whether a drug is working across your population, tightening eligibility is the only lever that feels like it's in your hands. But restricting access doesn't fix the actual problem, which is that you never had the visibility to make a targeted decision in the first place.

So if you're heading into open enrollment staring down a GLP-1 line item that's climbing fast: Don't make the decision under pressure that you can't defend later. Go find out who's using it, who's staying on it, and what's happening to their broader utilization and costs first. You may find the picture is more favorable than the pharmacy number alone suggests, or more nuanced. Either way, look first. Then make the change you can explain to your CFO and your employees with a straight face.