An analysis of U.S. health claims reveals that while GLP-1 drugs like Wegovy may aid weight loss, they significantly increase medical costs—rising to $18,507 annually—without reducing obesity-related health events, raising concerns for insurers and employers.

An analysis of U.S. health insurance claims shared with Reuters indicates that while medications like Wegovy may help reduce weight, they do not lower medical expenses.

After two years of treatment with Novo Nordisk’s Wegovy or other GLP-1 drugs, the average annual cost of care for patients with obesity rose to $18,507- a 46% increase from the prior average of $12,695. This data, provided by pharmacy benefits manager Prime Therapeutics, highlights the financial implications of obesity treatment.

In a control group of patients not taking GLP-1 drugs, costs increased by 14% over the same period. For those on GLP-1 medications, the rise in expenses was mainly due to higher prescription drug costs, though medical costs also grew. The analysis found no decrease in obesity-related medical events - such as heart attacks, strokes, or type 2 diabetes diagnoses -compared to the control group.

Novo Nordisk and Eli Lilly, makers of the GLP-1 weight-loss drug Zepbound, have earned billions since their U.S. launches. While they claim that their medications could reduce healthcare costs linked to obesity, many U.S. employers and officials hesitate to cover these effective but costly treatments due to high upfront expenses and uncertain future savings.

"The budget hit here is frightening for a lot of governments and private entities," said Ben Ippolito, an economist at the American Enterprise Institute. He noted that the potential demand for these drugs is immense. Analysts predict the weight-loss drug market could reach $150 billion annually in the next decade. 

Novo Nordisk emphasized that treating obesity is associated with improved medical outcomes, even though officials have not yet determined how to quantify these savings. Eli Lilly did not respond to a request for comment.

A study by Prime Therapeutics found that only one-in-four patients prescribed GLP-1 drugs like Wegovy or Ozempic for weight loss continued taking them after two years, leading to concerns about the cost-effectiveness of these medications.

With an estimated additional expense of $11,200 per patient in the first two years, Prime cautioned that without sustained use and positive health outcomes, insurers may need to reconsider their coverage of these weight-loss drugs.

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