GLP-1 considerations for 2026: Your questions answered! 

As employers prepare for their 2026 benefit decisions, one topic is on nearly everyone's radar: GLP-1 medications, especially those for weight loss. Some employers are contemplating adding coverage for GLP-1s approved for weight loss, while others are considering reducing or eliminating it due to rising utilization and expense.

In 2024, 44% of all employers with 500 or more employees — and 64% of those with 20,000 or more — covered weight loss medications, up from previous years. However, given the cost pressures, this upward trend may slow or even reverse. Strong demand for effective obesity treatments has made the GLP-1s approved for weight-loss, priced over $1,000 per month before rebates, two of the fastest-growing contributors to pharmacy spend.

Meanwhile, utilization of GLP-1 drugs used for diabetes is also rising as more patients with type 2 diabetes seek medications that help with both blood sugar control and weight management. In Mercer’s Survey on Health & Benefits Strategies for 2026, 77% of large employers (500 or more employees) say managing their overall GLP-1 costs is extremely or very important.

While GLP-1 medications for treating diabetes and obesity are not new, utilization has exploded over the last couple of years, and the market is rapidly evolving. In this post, we answer the questions from employers that we are hearing most often.

Do GLP-1s work for weight loss – and will they reduce medical spending?

GLP-1s can be an effective treatment, but patient response varies. Not everyone is a candidate or responder, and many discontinue therapy early – data from Prime Therapeutics shows only 1 in 12 members remain on treatment after three years. That said, persistence is improving as access expands, and providers better manage side effects. For those who respond, tolerate side effects, and make lifestyle changes, GLP-1s outperform other pharmaceutical options and are a less invasive alternative to bariatric surgery. However, more research is needed on how or if patients can successfully discontinue GLP-1 treatment and maintain a healthy weight through long-term lifestyle changes.

Beyond weight loss, GLP-1s are currently approved for additional uses for people who have obesity, including Wegovy for cardiovascular risk reduction, Zepbound for sleep apnea, and Ozempic for slowing chronic kidney disease in people with Type 2 diabetes. Future approvals may include treatments for heart failure, fatty liver disease, and even potential uses in Alzheimer’s and addiction disorders. Employers should be talking with their PBMs about how or if new uses will be covered and what flexibility might be available – especially if the employer isn’t currently covering weight loss.

Long-term medical savings are possible if sustained weight loss reduces obesity-related health issues. However, due to slow disease progression and employee turnover, immediate ROI remains uncertain. Some recent studies suggest GLP-1s are not cost-effective at their current prices, and increasing coverage could significantly raise overall spending, highlighting the challenge of balancing costs and benefits.

When will prices improve?

Generics for leading GLP-1 products are still more than five years away, so weight loss and GLP-1 treatments are likely to remain costly in the near-term.

Two oral GLP-1 options from Novo Nordisk and Eli Lilly are expected to be approved within the next 12-18 months. These could be a good fit for those unable or unwilling to do injections. Increased demand may add to employers’ costs.

How are PBMs addressing GLP-1 cost challenges?

As the GLP-1 supply constraints experienced in 2023 and 2024 have resolved, PBMs are adjusting their strategies related to GLP-1s, in some cases offering savings opportunities for their clients and in other cases attempting to strengthen access through their pharmacy networks. Notable PBM strategies include:

• Channel strategies. Some PBMs are moving toward a "cost-plus" contracting strategy for their network pharmacies, which offers a consistent margin per prescription. While this represents a broad shift rather than a specific GLP-1 strategy, it’s something that employers should be aware of as they review updated contract terms for 2026. In contrast, Express Scripts is offering a GLP-1-specific network strategy, Evernorth EnReachRx, to employers. While it may generate savings for some employers through additional management and oversight, employers should carefully evaluate the program to ensure it is the best fit for their plan.
• Formulary strategies. With the market stabilizing, PBMs are now implementing formulary decisions. For example, CVS announced it will exclude Zepbound starting July 1st, while other major PBMs continue to offer access to both Zepbound and Wegovy. Some employers may explore a "generics-first" approach, favoring Saxenda (liraglutide), as the generic becomes available in 2027. However, the requirement for daily injections may limit widespread adoption of Saxenda.
• Utilization management and lifestyle programs. Beyond traditional controls like prior authorization and quantity limits, PBMs are increasingly pairing GLP-1 authorizations with lifestyle management programs. Most PBMs have announced partnerships with one or more vendors, recognizing that combining medication with behavioral support can improve outcomes. These programs vary widely: some focus on providing members with tools and coaching to succeed on their weight loss journey, regardless of medication use; others pair short-term GLP-1 therapy with deprescribing components once patients are deemed ready; some take over prescribing entirely, while others offer wraparound support services, leaving the prescribing function to primary care providers. Given the variety of options — and that many vendors are new to the market — employers should carefully vet each vendor’s experience and operational model as well as the potential cost savings.

Can employers leverage direct-to-consumer pricing?

Obesity treatment is a unique drug category in that it’s one of the few with an active direct-to-consumer segment. The two manufacturers of GLP-1s for weight loss, Novo and Lilly, operate their direct-to-consumer pricing models differently, but in both cases, the prices are significantly lower than the standard list prices. Novo offers Wegovy pens directly to consumers through their NovoCare pharmacy or via a savings card that can be used at retail pharmacies. Patients simply need a prescription from any doctor, and their medication can be filled through NovoCare — making access easier and potentially more affordable.

Lilly’s approach, Lilly Direct, allows members to send prescriptions from their own doctors or use Lilly’s telemedicine network. Zepbound, however, is supplied in vial form rather than pens, which adds a layer of complexity for patients self-administering the medication. Plus, Lilly’s pricing depends on refill frequency – refills made within 45 days of the prior delivery will be available at a reduced price.

Many employers are asking their PBMs how they can tap into these direct-to-consumer prices. It’s worth noting that what employers pay is usually far below the list price, thanks to negotiated rebates that PBMs pass back to them, but employers should definitely ask their PBMs how the direct-to-consumer options compare – they may be surprised to find out that their net of rebate price is comparable to, or even better than, the direct-to-consumer price.

Some employers that want to support their employees in purchasing GLP-1s but face budget constraints that prevent offering full coverage have explored contributing to lifestyle accounts or incentive HRAs that employees can use to buy GLP-1s directly from the manufacturer. However, these options come with their own set of complexities and compliance considerations that should be carefully evaluated.

Are lower cost compounded products an option?

As discussed in a prior blog post, these products – marketed directly to consumers by telehealth companies – pose safety risks according to the FDA, which is why most employers exclude them from coverage.

With shortages for Wegovy and Zepbound now resolved, the FDA’s notice period to large-scale compounding facilities ended in May 2025. Moving forward, the FDA can take action against companies selling copycat versions. Some telehealth vendors have shifted away from offering compounded products. However, some compounders working with other telehealth vendors are now creating slight variations of existing products to avoid classification as copycats. It’s unclear how or if the FDA will regulate these new versions.

How are employers approaching 2026 in terms of coverage?

Many employers that are not currently covering the weight loss category are maintaining status quo while they wait for improved pricing or more competition in the market. Others are pairing coverage with mandatory lifestyle programs to boost success rates. Some are exploring carve-outs that limit prescribing or dispensing to specific vendors. While cost pressures are prompting some to consider removing coverage or requiring members to share more of the cost, targeting one particular category of drug for changes raises compliance and equity considerations that complicate such decisions. The impact on rebates would also need to be considered.

It's important to recognize that the obesity treatment market is still in the early stages. Nearly 150 drugs are in development, and researchers are exploring different pathways for obesity treatment beyond GLP-1. Not all will reach FDA approval, but the landscape is expected to look very different in ten years, with a broader array of options and potentially more affordable solutions.