Employers Scale Back Coverage of GLP-1 Drugs as Usage Rises

Employers in the U.S. are increasingly considering dropping coverage for GLP-1 weight loss medications, such as Novo Nordisk’s Ozempic and Eli Lilly’s Zepbound, as their widespread use drives up costs, according to a report by the Business Group on Health. About 10% of large employers planning to drop the drugs in 2027, while 5% of companies with over 500 employees are also considering similar changes, per a Mercer survey.

Why Are Employers Reducing Coverage?

The decision follows a surge in GLP-1 drug prescriptions, which have become a cornerstone of obesity treatment. While lower drug prices for Zepbound and Foundayo have slightly reduced costs, the rising number of users has offset savings, according to the Business Group on Health. Employers face financial pressure as more employees seek coverage, with 67% of large firms currently offering the medications, down from 75% in 2025.

Impact on Consumer Spending in the U.K.

In the U.K., the rapid adoption of GLP-1 drugs has led to a notable shift in consumer behavior. A study by Worldpanel, part of Numerator, found that households using the medications purchased 299 million fewer food items in the year after starting treatment. Users reported reduced cravings for snacks and processed foods, with 6.3% of U.K. households now including at least one GLP-1 user, up from 2.3% in 2024. This trend has contributed to a $1 billion decline in annual grocery spending, Bloomberg News reported.

What Does This Mean for Healthcare Costs?

The dual pressure on employers and consumers highlights the growing economic implications of GLP-1 drugs. While these medications have shown efficacy in weight management, their long-term financial sustainability remains a concern. Employers cite rising utilization as a key factor in coverage decisions, with some opting to limit access to high-cost treatments.

How Are Companies Responding?

Mercer’s survey revealed that 44% of large U.S. companies currently cover GLP-1 drugs, but this could decrease as more employees qualify for coverage. Some employers are implementing stricter eligibility criteria, such as requiring documentation of obesity-related health risks before approving the medications.

What’s Next for GLP-1 Drugs?

The trend reflects broader debates over the balance between medical innovation and cost control. As more patients adopt GLP-1 therapies, insurers and employers may face difficult choices about coverage. The U.K.’s experience with reduced grocery spending underscores the far-reaching effects of these medications, which extend beyond healthcare into consumer economics.

For the latest updates on GLP-1 drug policies and health trends, consult official reports from the Business Group on Health and Mercer.