Top five developments in GLP-1s and weight-loss drugs 

The conversation around GLP-1 drugs continues to dominate employer health benefit discussions — and for good reason. These medications already have transformed care for millions living with type 2 diabetes and obesity, delivering meaningful health improvements, and their use is expanding. Not only are GLP-1 therapies gaining approval for treating a growing number of conditions linked to diabetes and obesity, but ongoing trials are exploring their potential in osteoarthritis, diabetes complications, Alzheimer’s, and even treatment of addiction.

For health plan sponsors, new products and formulations, new manufacturers, growing competition, and direct-to-consumer marketing have added to the usual complexities of managing prescription drugs benefits. Making decisions about coverage or even trying to estimate the impact on future costs is challenging to say the least. While no one has a crystal ball when it comes to GLP-1s, in this post we’ll break down the latest developments and — where we can — provide our best guess on the impact on employer programs.

#1. Now in pill form: New oral GLP-1 products expand options

One of the most anticipated developments in the weight-loss drug market is the introduction of oral GLP-1 therapies. Oral semaglutide, which contains the same active ingredient as the well-known injectables Ozempic and Wegovy and the oral Rybelsus for type 2 diabetes, is expected to gain approval soon for both obesity treatment and secondary cardiovascular risk reduction in people with obesity. This approval could come before the end of the year, marking a significant milestone as the first oral GLP-1 option for weight management.

Lilly’s orforglipron, another oral GLP-1 candidate, is projected to be approved in 2026. Clinical trial data show that orforglipron delivers clinically meaningful weight loss over 72 weeks, with patients losing an average of 7.8% to 12.4% of their body weight depending on the dose, only slighly less than the weight loss typically seen with injectable GLP-1 therapies.

Possible employer impacts. The option to take a daily pill rather than a weekly injection is expected to broaden the market, both by expanding treatment uptake and improving adherence, which means employers should expect higher utilization. What about cost? While oral GLP-1 products are expected to be less expensive to manufacture than their injectable counterparts, it’s not likely that oral products will be priced significantly lower than existing injectables given that the same manufacturers producing the leading injectable drugs are behind these oral therapies. In fact, employers should anticipate the potential that oral GLP-1s may even come at a premium, reflecting their clinical value and market positioning.

#2. Generics and other pricing pressures

Generic versions of some GLP-1 drugs are beginning to emerge, offering potential cost relief. Victoza’s generic is already widely available for diabetes, and Saxenda’s generic for weight loss was very recently approved. Only one generic version is currently available; multiple generic competitors are expected to hit the market by March of 2026 and the competition is expected to drive down price. Unfortunately, generic versions of the most popular weekly injectables like Ozempic won’t arrive until at least 2031, meaning branded products will likely dominate for years to come.

That said, some GLP-1 brands will soon face a different source of pricing pressure. Semaglutide products including Ozempic, Wegovy, and Rybelsus are on Medicare’s negotiation list for 2027, with new Maximum Fair Prices expected to be announced by the end of November. While there’s certainly no guarantee that manufacturers that lower their prices for Medicare will make similar cuts for commerial buyers, some price reductions are at least a possibility.

Possible employer impacts. While generics are not likely to make a big dent in your GLP-1 claims expense in the near-term, government interventions in the form of Medicare price negotiations may affect the commercial market. However, the magnitude and direction of the price negotiation on employer markets is difficult to predict. Employers that don’t currently cover the weight loss category could consider the option of offering a generic-only benefit once multiple generic versions of Saxenda become available in the market at a low price point.

#3. Direct-to-consumer marketing heats up

The GLP-1 weight loss drug market is experiencing a notable shift with the rise of Direct-to-Consumer channels, which are offering these medications at significant discounts compared to traditional retail prices. Both Eli Lilly and Novo Nordisk have established DTC models — Lilly Direct for Zepbound and NovoCare for Wegovy — that simplify patient access and provide substantial cost savings compared to list price. Both manufacturers also offer DTC coupon programs and Novo recently announced that Wegovy would be available at Costco pharmacies at the DTC price. This emerging channel is reshaping pricing expectations across the market. Employers increasingly anticipate that their net prices, after rebates and negotiations with Pharmacy Benefit Managers, will be competitive with or better than these DTC offerings.

Possible employer impacts. The presence of DTC channels is putting additional pressure on manufacturers and PBMs to deliver more favorable pricing and value to employer-sponsored health plans. At the same time, employers that don’t cover GLP-1s for weight-loss are exploring ways to leverage DTC options to help employees access desired medications.

#4. The next wonder drug? High hopes for new uses of GLP-1s

The market is evolving rapidly. GLP-1 therapies are expanding beyond their original uses, with new indications on the horizon. For example, Wegovy recently gained approval for treating metabolic associated steatohepatitis (MASH), a serious liver condition linked to obesity and diabetes that affects an estimated 5% of the US adult population and Zepbound received approval for treatment of obstructive sleep apnea in people with obesity. Ozempic is expected to soon address peripheral artery disease in people with type 2 diabetes, and ongoing trials are exploring GLP-1’s potential in osteoarthritis, diabetic complications, Alzheimer’s, and even addiction treatment.

Possible employer impacts. In the near term, employers that currently cover GLP-1s for the weight loss indication will not likely experience significant uptake in utilization as a result of these new indications. This is because the population affected by the new indications overlaps almost completely with the population that already qualifies for treatment under the weight loss indication. Employers that do not currently cover weight loss will need to carefully consider coverage of the new indications and to explore the cost and rebate implications of any coverage decisions.

It is important to note that some PBMs may allow employers to selectively choose which indications to cover, while others may require employers to elect coverage for all new indications or none at all. In some cases, the weight loss drugs may be added to the PBM’s standard formulary for the new indications – whether or not the employer covers the weight loss category. It’s important to recognize that the cost dynamics of GLP-1 treatments can vary depending on the indication. For example, in cases such as MASH, GLP-1 therapies may represent a lower-cost treatment option compared to other approved drug therapies. Conversely, for conditions like sleep apnea, the cost of GLP-1s may be higher than that of established non-drug treatments.

Employers should also be aware that rebates are typically not available unless coverage includes all FDA-approved indications. This factor can significantly influence the overall cost-effectiveness of coverage decisions.

#5. Weight-loss innovation goes into high gear

Beyond GLP-1s, the weight loss drug pipeline is bursting with over 170 candidates from 82 manufacturers. While many are GLP-1 based, others target different biological pathways, some of which might offer similar weight loss with a lower incidence of gastrointestinal side effects like nausea. One notable potential entrant is Amgen’s MariTide, a monthly injectable that has demonstrated impressive results, with an average of 20% weight loss after one year in clinical trials. It’s monthly dosing schedule may offer a convenient alternative to weekly injections, appealing to patients seeking less frequent administration.

Further out in the pipeline, manufacturers are researching different mechanisms to treat obesity, including:

• Blocking cannabinoid receptors with the goal of regulating energy balance and reducing food intake
• Gut targeted polymer therapies that would create a temporary barrier in the small intestine and mimic the effect of bariatric surgery
• Using RNA to silence specific genes, such as those that are associated with harmful abdominal fat, which scientists believe provided humans with an evolutionary advantage by discouraging them from expending unnecessary energy.

Possible employer impacts. Near-term, MariTide, if approved, would represent an important third manufacturer entering the competitive GLP-1 space, potentially increasing market competition and putting downward pressure on net prices. Looking further ahead, employers should recognize that while the weight loss category is expected to continue to drive spend and utilization for the forseeable future, there will be additional opportunities for management and product selection as the category matures and new technologies become available.

Keeping on top of a shifting market

Given the state of flux we’ve described, the decisions you make today about coverage, formularies, and budget allocations will need ongoing review and adjustment in the coming years. Staying informed by monitoring pipeline developments, pricing changes, and utilization trends will be key to developing proactive strategies that balance employee health needs with sustainable cost management.

• Know your current utilization and trends. Understand how GLP-1 and weight loss drugs are being used within your population and monitor changes over time to anticipate budget impacts.
• Ensure your formulary and utilization management align with your overall strategy. Review coverage policies, prior authorization criteria, and preferred drug lists to make sure they support your health and financial goals.
• Prepare for continued budget and member pressure around new indications — even if you don’t currently cover GLP-1s for weight loss. New FDA approvals and expanding uses will drive demand and cost pressures, so proactive planning is essential.

GLP-1 therapies and the broader weight loss drug pipeline offer exciting opportunities to improve health outcomes. But they also bring complexity and uncertainty. Employers who recognize the evolving landscape and commit to regular re-evaluation of their strategies will be best positioned to navigate these changes successfully.