Rebate and adherence concerns drive payer reluctance on GLP-1 obesity coverage

Roughly half of payers who are currently not covering GLP-1 receptor agonists for obesity say they would not provide coverage at them regardless of price, according to Pharmaceutical Strategies Group’s (PSG) latest Trends in Drug Benefit Design Report.

Payers continue to express concern about the high cost and affordability of GLP-1 drugs for obesity. But now payers are also questioning patients’ lack of adherence and the impact of that on overall spend. Nearly two-thirds of patients without Type 2 diabetes who take GLP-1s discontinue treatment within one year.

“It was very interesting to note that discontinuation rates and weight regain are having a real role in their conversations," Morgan Lee, vice president of research and marketing at PSG, said in an interview.

The American Medical Association recognized obesity as a disease in 2013. Obesity can lead to other conditions, such as diabetes, heart disease, stroke, metabolic syndrome, liver disease, sleep apnea and osteoarthritis. Just yesterday, AMA officials announced that the organization was adopting new policies to improve patient access to obesity treatments, including GLP-1 therapies. The AMA supports pilot and demonstration programs to evaluate coverage models for obesity treatments. They called for long-term coverage policies that promote consistent pricing and formulary inclusion.

Research continues to show that treating obesity can lead to better outcomes for patients and cost savings overall. Earlier this year, Aon released results of analysis of a representative sample of 192,000 GLP-1 users from commercial medical and pharmacy claims. Among people using GLP-1s for 18 months for weight loss, there was a pattern of reduced medical cost growth, reductions in hospitalizations due to major adverse cardiovascular events (MACE), and lower claims incidence for a range of conditions.

The GLP-1 therapies were first approved to treat patients with diabetes, including, for example, semaglutide (Ozempic for diabetes and Wegovy for weight loss) and tirzepatide (Mounjaro for diabetes and Zepbound for weight loss). Since then, they have been studied and approved to treat sleep apnea, heart disease and a serious liver disease called metabolic dysfunction-associated steatohepatitis.

Conversations around the use of GLP-1s for weight loss, however, have shifted somewhat, Lee said, with payers now looking at GLP-1 therapies as being lifestyle drugs. “We’re having a lot of conversation about obesity as a medical condition, but payers are seeing it a little bit differently,” she said.

In the PSG survey, 72% of respondents indicated that discontinuation rates and weight regain were at least moderately influential in their coverage decisions. Health plans in particular are starting to lean toward viewing obesity as a lifestyle condition that should not be covered.

Rebates impact coverage decisions

The parameters of the rebate contracts on these obesity medications can be strict and can penalize plans that try to manage the spend on GLP-1 drugs, such as requiring lifestyle modification or narrowing eligibility for those with higher BMI, Tara Higgins, Pharm.D., senior clinical consultant at PSG, said in an interview.

“Being able to make plan adjustments and limit who has access to the drug, or how the drug is used, or who’s prescribing the drug, or putting in requirements for lifestyle modification programs can impact the rebate,” she said. "What we're seeing is a bit of frustration in that these are costly medications, and they can't manage them the way we want to, so they are not going to cover them.”

Higgins said that based on the labeling of the products, the pool of potential people who could be eligible for therapy could be large, creating a situation where plans are facing high utilization and high costs with few options to manage that cost. About 40% of the U.S. population qualifies as being obese, according to the CDC.

Although the direct-to-consumer pricing of the GLP-1 therapies points to a potential lower cost, Higgens points out the lowest prices are for starting doses. “As you get up to the maintenance dose, it becomes similar to what payers are seeing from a net cost perspective when they’re able to maximize the rebates,” she said. “But the consumer models are priced based on the FDA labeling, and that negates any guardrails to tailoring a program.”

Higgins said the focus on rebates for GLP-1 drugs could change. “We're seeing a shift from a rebate perspective that’s being pushed from the Medicare fair pricing and regulations or programs that are going into effect that are influencing and affecting the actual retail pricing of drugs,” she said. “We anticipate that those things will be coming into play in 2027, and there could be some potential shift, particularly for the semaglutide portfolio.”

The semaglutide products (Ozempic and Rybelsus for diabetes and Wegovy for weight loss) were part of the second set of drugs for Medicare Part D through the Inflation Reduction Act. CMS has negotiated a 71% discount off the list price, or $274 for a 30-day supply, with new prices going into effect Jan. 1, 2027.

Related: PSG survey signals payer shift on rebates

A separate survey done by PSG on specialty drug benefits indicates that payers increasingly favor lower net costs and price transparency over traditional rebate programs.

“About 40% to 50% of those products that are on the lists for Medicare and the government-funded programs are also seeing a reduction in price from a commercial standpoint,” Higgins said. “The rebates then are significantly less or may go away altogether when you have a shift in the commercial pricing space.”

Additionally, the pipeline for obesity products continues to grow, and IQVIA estimates that there are about 190 products in various stages of development. New products continued to become available, including the April 2026 approval of the oral GLP-1 Foundayo (orforglipron). In the near future, even more options with different mechanisms for weight loss could be available. Competition from these newer products could lower prices.

“It’s similar to what we saw in the insulin space,” Higgins said. “If you look back, we had escalation in pricing for insulin, and then we saw the bottom drop out of the insulin pricing. In the obesity space, we’ll see competition influencing what is going to happen from a formulary placement standpoint, and then obviously from a net cost perspective.”