Companies across the nation are preparing to eliminate insurance coverage for popular weight loss medications next year, even as pharmaceutical manufacturers reduce prices for these treatments.
Research from the Business Group on Health reveals that approximately 10% of companies currently providing coverage for GLP-1 weight loss drugs intend to discontinue this benefit in 2027. A separate study conducted by benefits consultancy Mercer found that 5% of large companies – those with workforces exceeding 500 people – are making similar plans.
Current coverage rates vary between studies, with Mercer reporting that 44% of large companies provide obesity drug benefits, while the Business Group on Health indicates 67% of major employers offer GLP-1 coverage in 2026.
Health insurer Cigna recently stopped providing weight-loss medication coverage for its own workforce beginning in July, directing employees to purchase these medicines through alternative sources.
Pharmaceutical companies now offer both newer pill forms and traditional injections through their direct-to-consumer websites at reduced rates, facilitated by arrangements with the Trump administration’s TrumpRx.gov platform.
Novo introduced its Wegovy pill option in January, followed by Lilly’s launch of Foundayo pills in April. Both oral medications begin at approximately $149 monthly.
Lauren Remspecher, who serves as a director at Purchaser Business Group on Health, explained that many companies remain frustrated by their inability to secure the same cost reductions through pharmacy benefit managers that individual cash-paying customers receive.
“One advantage of having the direct-to-consumer and some of the government-negotiated pricing more transparent is that now employers can see how much more they’re paying and where there is an opportunity for improvement,” Remspecher stated.
The introduction of oral alternatives has significantly boosted medication demand this year, attracting individuals who previously avoided GLP-1 treatments, which continues to drive up employer expenses according to five industry specialists.
Multiple experts noted that companies are observing longer treatment durations and expanded patient populations compared to other medical interventions.
Clinical trials demonstrate that Foundayo and Wegovy pills achieve weight reductions of 11% and 14% respectively, showing less effectiveness than injectable versions but appealing to patients who prefer avoiding needles.
“Even though we have seen the unit cost come down, the patient population keeps growing,” explained Louis Zollo, a pharmacy practice leader at healthcare consultancy Segal.
Benefits consultancy Aon has documented both existing injectable users switching to oral formulations and new patients selecting pill options. Aon also anticipates reduced GLP-1 coverage in the coming year.
Dan Mendelson, CEO of Morgan Health, a healthcare division of JPMorgan, predicted that pill options will drive down individual treatment costs this year.
“But every year there’s going to be market growth,” he noted. “There’s going to be more people taking these drugs, so on aggregate this still represents a major cost driver for employers.”
