The long-term value of GLP-1 therapies is under scrutiny, as health insurers balance rising pharmacy expenditures with the potential for lower future overall medical costs. “Coverage and benefits strategies will likely continue to evolve,” say authors of a new report from AM Best, entitled GLP-1 Therapies: Evaluating the Balance Between Pharmacy Costs and Long-Term Value.
“As pharmacy cost trends continue to rise and clinical evidence evolves, health insurers face a fundamental question on whether improvements in long-term morbidity and the potential for improved mortality outcomes ultimately justify significant investments in GLP-1 therapies,” they add.
Glucagon-Like Peptide-1 (GLP-1) receptor agonists were initially created to treat type-2 diabetes before being widely used for obesity management. The drugs are also the subject of ongoing trials for other conditions, including cardiovascular disease, mental health disorders, liver and kidney disorders, neurodegenerative disorders, sleep apnea, addiction disorders and a range of cancers.
Affordability pressures
In a statement about the report, AM Best’s director and author of the commentary, Joseph Zazzera says the drugs are one of the most significant drivers of pharmacy spending across the health care industry. “Growing evidence supports improved morbidity outcomes and more effective disease management, which may reduce future medical costs. However, affordability pressures continue to shape health insurance coverage decisions, as GLP-1s remain a significant driver of pharmacy spending and long-term cost offsets remain uncertain.”
In response to an Insurance Portal inquiry about the research, Zazzera says Canada’s health care financing structures differ from those in the United States, but adds that the underlying challenge is similar. “Payers are weighing the near-term cost of GLP-1 therapies against their potential to improve chronic disease outcomes and reduce longer-term health care utilization. The emergence of generic semaglutide in Canada adds another dimension, as greater competition and lower pricing could begin to shift that value equation,” he writes.
In the report itself, he goes further, noting that the companies paying for the drugs today may not be the same companies realizing future medical savings benefits, as members frequently change employers and health plans.
“Whether improvements in morbidity ultimately translate into measurable reductions in mortality remains an important question,” they write. Similarly, they add that the anticipated benefits, that is fewer diabetes complications, reduced hospitalizations and improved management of chronic diseases, may not be realized for years.
“While coverage for diabetes has generally remained intact, many employer-sponsored health plans offered by commercial insurers have reassessed, narrowed or eliminated coverage for obesity indications as they seek to balance affordability with growing demands,” the report states.
“AM Best believes the discussion surrounding GLP-1 therapies is becoming less about the medications themselves and more about how healthcare financing should adapt to innovations that have the potential to reshape overall population health. While the clinical evidence continues to expand, the financial implications remain an area of active evaluation.”
