Prime Highlights
- More than half of large U.S. employers intend to cut health coverage or raise employee cost-sharing by 2026.
- The explosive increase in the cost of GLP‑1 weight-loss medications is fueling a radical shift in employer healthcare strategies.
Key Fact
- 77% of employers consider the expense of GLP‑1 medications such as Wegovy and Zepbound a significant financial issue.
- Prescription drug spending increased 8% in the last year; healthcare costs of benefits will rise 5.8% in 2025.
Key Background
More American employers are rethinking their health benefit programs in light of growing healthcare spending, led by skyrocketing drug prices such as GLP‑1 weight-loss medications like Wegovy and Zepbound. In a national employer survey conducted recently, 51% of large employers said they will accelerate healthcare cost shifting to employees in 2026, compared to 45% in 2025. These rising drug prices are compelling entities to rethink whether it is possible to offer comprehensive benefits.
GLP‑1 medications, originally developed to treat diabetes and now being prescribed across far and wide to control weight, cost up to $1,000 monthly per patient. Although they have been successful in reducing obesity comorbidities, their short-term cost to employer-sponsored health insurance has been a cause of concern on a large scale. Nearly 77% of employers consider these drugs to be an important cost point of leverage, although they contain long-term health potential.
Prices for prescription drugs rose 8% last year alone, outpacing inflation and raising concerns about further price hikes. Overall employer health care benefit costs will rise 5.8% in 2025. Employers are reacting and taking steps from modifying cost-sharing designs to reconsidering which pharmacy benefit managers (PBMs) they contract with. Some even are considering outcome-based pricing arrangements, where payment ties to the drug’s performance.
Public employers are also acting. State benefit plans, for example, are restructuring formularies to restrict GLP-1 drug usage only to patients with established clinical criteria. Meanwhile, approximately one-third of employers are considering more transparent PBM arrangements as criticism grows of current rebate-loaded price structures. The shift to value-based drug pricing, utilization control, and high-deductible plans is also likely to continue.
As demand for weight-loss medications rises, affordability vs. access is a strategic priority at the high level. Employers today are compelled to weigh the cost of coverage against employee health and productivity, introducing an intricate new era of U.S. healthcare planning.
