How benefits plan sponsors, insurers are managing newer — and effective — GLP-1 medications

GLP-1s have shown to be effective in treating diabetes and obesity and hold promise for many other health conditions. “Not surprisingly, those who battle their weight wanted access to this innovative treatment; however, Canadians could only purchase Ozempic to treat diabetes because a different version of semaglutide — Wegovy, specifically formulated to treat obesity — wasn’t launched in Canada until May 2024,” says Suzanne Lepage, a private health plan strategist. “In the absence of an approved obesity treatment, people not living with diabetes turned to Ozempic instead.”

Read: How plan sponsors, insurers are considering coverage of weight-loss drugs amid rising use of Ozempic

Express Scripts Canada’s analysis of semaglutide claims found 46 per cent of patients claimed semaglutide as their only diabetes treatment. However, treatment guidelines for diabetes recommend semaglutide as an add-on treatment to other diabetes medications. In order to stem potential off-label use, many benefits plan sponsors have implemented prior authorization to ensure the medication is used appropriately.

Prior authorization

The Corporation of the County of Grey introduced its prior authorization program for GLP-1s in early 2024 after its insurer flagged the lack of prior authorization for off-label use of Ozempic for weight-loss within the benefits plan.

“As an employer, with this new spectrum of drugs, we need to make sure there’s no unintended consequence of off-label prescriptions,” says Jennifer Moreau, the County’s director of human resources. “We’re very supportive of offering everything that’s available, just with increased rigour to ensure those who deserve and need the drug, qualify for it and have it.”

At the City of Mississauga, the use of prior authorization ensures the right treatment for the plan member alongside cost sustainability for the City, says Elena Shiganova, its senior manager of total rewards, who notes the organization is seeing a lot of interest in weight-loss medications. “We’re trying to educate [our employees] to explain Health Canada rules and regulations and why we have prior authorization in place and how it protects employees and the corporation.”

In April 2024, the City moved from a six-month lifetime maximum for weight-loss/management drugs to an annual maximum. “We’re recognizing that, for some conditions, employees need to be able to maintain that and sustain that throughout the years,” she says.

Read: Q&A with the City of Mississauga’s Elena Shiganova

Alongside the hype of Ozempic for weight loss, Mosey & Mosey Insurance Ltd. has received “inquiry after inquiry” from plan sponsor clients about coverage, says Abbi O’Neill, the firm’s vice-president of strategic initiatives. “We started to be very proactive to educate our plan sponsors that Ozempic is approved [by Health Canada] as a diabetes drug, not a weight loss drug.

“Most insurers have implemented prior authorization for Ozempic as a way to ensure it is used for treating diabetes and not for cosmetic weight loss,” she adds.

Classified as chronic

Even though Wegovy is now available in Canada, it may not be accessible through health benefits plans, says Lepage, noting many plans still exclude obesity treatments because it’s classified as a lifestyle choice, rather than a chronic disease.

In other words, a plan member with obesity was traditionally encouraged to make lifestyle changes, such as exercise and diet, instead of taking medication. But in March 2024, the World Health Organization officially recognized obesity as a chronic disease, following in the footsteps of the Canadian Medical Association, which did so in 2015.

“Obesity is a complex chronic disease and losing weight is not just a question of eating less and moving more,” said a spokesperson from Novo Nordisk, the pharmaceutical company that markets Ozempic and Wegovy.

“In fact, obesity can be influenced by genetics, physiology, environment, job and education and what is going on in the brain. Understanding these factors is critical because obesity is associated with other diseases, including type 2 diabetes, heart disease and certain types of cancer, in addition to the stigma and bias millions suffer every day.”

Read: Applying chronic disease principles to supporting plan members with obesity

The Corporation of the County of Grey’s Moreau believes obesity shouldn’t be treated any differently than any other health condition. “If we can control obesity, wouldn’t that naturally help our employees with diabetes, our employees with cardiac issues, our employees that are on antidepressants because they don’t like the way they look? There are all sorts of other conditions that go along with obesity that could be solved.”

In the past, 75 per cent of Arthur J. Gallagher and Co.’s plan sponsor clients’ drug formularies excluded weight-loss medications, says Sandra Ventin, the consultancy’s associate vice-president of benefits. “But as our education on this topic advances, we have more employers taking the approach . . . and revisiting their prescription drug formularies.”

In a 2023 survey, Gallagher found 50 per cent of plan sponsors excluded weight-loss medications, but 19 per cent said they’re considering coverage in the future, with controls such as a weight-related comorbidity and a declaration of obesity (i.e., a body mass index of more than 30).

‘Miracle drug’

While there are other medications for diabetes, they don’t all come along with a side-effect of weight loss.

“Ozempic for unstable people with type 2 diabetes who are obese is like a miracle drug,” says Ventin. “There have been patients asking for it, even to the extent of demanding off-label scripts from their medical professionals. Popularity among the medical community and patients has led to global shortages, despite the increased cost for managing diabetes.”

Read: What plan sponsors should know ahead of rollout of new obesity drugs in Canada

Canada has experienced this shortage as well. From August 2023 to March 2024, the City of Mississauga saw a higher use of other GLP-1s because Ozempic wasn’t available, according to Shiganova.

“A lot of our [plan sponsor] clients have people suffering from type 2 diabetes and they can’t get a 90-day supply easily,” says Ventin. “They’re being limited or getting a partial dose instead of a full one.”

One of the reasons for the shortage in Canada between 2023 and early 2024 was a supply of the drugs heading to U.S. residents. According to a story by the Canadian Broadcasting Corp., up to 15 per cent of Ozempic prescriptions in British Columbia in January and February 2024 went to Americans.

“We only know for sure that it happened in B.C. because that province tracks the prescriber and where it’s going,” says Joan Weir, vice-president of group benefits at the Canadian Life and Health Association.

Novo Nordisk is actively working with public funding agencies and private insurers to ensure its medications are available through both public and private drug formularies, according to the spokesperson. “This is the best way to ensure every Canadian has access to the medicine they need. Novo Nordisk supports programs that makes prescription drugs more affordable and more accessible to all Canadians, regardless of income, age or geographic location.”

Costs to employers

With the prevalence of type 2 diabetes, the use of GLP-1s could be prolific, says Ventin.

“Never before did we have the volume of people being in a certain category. This is a disease state that affects a huge percentage of the population that you just don’t see with other disease states such as rheumatoid arthritis or irritable bowel syndrome.”

Read: 34% of U.S. employers covering GLP-1s for both diabetes, weight loss: survey

And while Weir notes GLP-1s aren’t as expensive as drugs for oncology, for example, they’re lifetime medications. “It’s a commitment for as long as that employer has that person working for them. It’s an ongoing expense.”

In the categories of type 2 diabetes and obesity, that expense can add up. “We have to ensure adjudication levers are in place —prior authorization, making sure people have tried a lower-cost drug solution first, for example,” says Ventin.

In addition to costs, O’Neill suggests employers consider the impact on reputation if their benefits plan isn’t inclusive. “Having an exclusion for a chronic disease that doesn’t apply to any other chronic disease is hugely glaring.”

Though Wegovy is now available in Canada, many insurers are in a holding pattern in terms of allowing it on their formularies.“We’re trying to gather information [as it] becomes available to make an informed decision where, when we do decide what’s going to happen with Wegovy, we appropriately ensure [the drug] is listed for the right plan member, at the right time, at the right coverage,” says Pavithra Ravinatarajan, head of pharmacy strategy at Manulife Canada.

GreenShield has added weight-loss drugs to its standard plans but has several safeguards in place. “We have strong prior authorization with clinical criteria, which ensures the safety of the patient and some fiscal responsibility for the employer,” says JP Girard, the company’s executive vice-president and head of health insurance.

Read: Claims for obesity drugs increased 42% in 2023, 92% since 2020: report

Although these GLP-1s have been on the market for several years, GreenShield has seen “the most significant growth occur in the past two to three years, with a 46 per cent increase in costs attributed to this category of drugs from 2022 to 2023 alone.”

Efficacy and safety are among the reasons for increased usage. GLP-1s “have strong glycemic control and cardiovascular risk protection,” says Girard. “And they’re effective in aiding in weight loss, which is important to improving long-term health outcomes.”

In addition, physicians have moved to prescribing GLP-1s for both diabetes and weight management, he says, and plan members are increasingly interested in taking control of their health. “We’re seeing a trend from plan sponsors and plan members taking charge of their own health through nutrition and weight management.”

Brooke Smith is a freelance writer.