Can Outcomes-Based Agreements Work for Weight Loss Drugs?

As more data become available about how glucagon-like peptide 1 (GLP-1) receptor agonists impact the metabolic system, demand for and use of GLP-1 drugs are expected to grow. GLP-1 drugs have gained a lot of attention for their ability to help people lose weight but also for their ability to reduce the risk factors associated with obesity.

Although some insurers — such as Blue Cross Blue Shield of Michigan — have said they plan to stop coverage of GLP-1 drugs for obesity, others are considering adding such coverage. In Mercer’s Survey of Health and Benefits Strategies for 2025, released in June 2024, 42% of responding employers currently cover obesity medications and 27% of them are considering it. Just 3% of respondents said they plan to provide overage of weight loss drugs.

Employers who are considering offering coverage for the GLP-1 therapies are still struggling to find a way to provide access to the newer weight loss products and still manage costs. The GLP-1 drugs have higher costs than older weight loss drugs. Zepbound (tirzepatide) is available for a list price of $1,059.87, which is about 20% lower than the newer Wegovy (semaglutide).

Ellen Licking

“Employer health plans are managing access to the GLP-1s purely for weight loss very tightly because of the budget impact, and they can't see a way for the math to work,” Ellen Licking, vice president of consulting services and communications at the consulting company Real Endpoints, said in an interview.

But Licking said there is another way to provide access to GLP-1 weight loss drugs: outcomes-based agreements with the manufacturers.

“These outcomes-based agreements would take away clinical uncertainties, so payers have a guarantee that they’re not spending money on something that’s not going to work. That is the critical issue here,” she said.

There is a precedent for such contracts, which have been used for drugs to treat patients with diabetes, congestive heart failure and multiple sclerosis. One of the earliest examples of this type of agreement was Merck’s contract with Cigna for the diabetes medications Januvia (sitagliptin) and Janumet (sitagliptin and metformin) in 2009. In this agreement, rebates were given if a specified hemoglobin A1c blood sugar level was not met in the patient population.

Since then, outcomes-based agreements have been used for drugs to treat patients with congestive heart failure, high cholesterol, multiple sclerosis and hepatitis C.

Another example of a value-based agreement cited by Licking is Gilead Sciences’ programs for Solvadi (sofosbuvir) and Harvoni (sofosbuvir/ledipasvir), both of which cure patients with hepatitis C. Solvadi launched in 2013 with a price of $84,000 for a treatment course, and Harvoni launched in 2014 with a price of $94,500 for a treatment course. A agreement with Cigna for Harvoni used viral load a measurement for outcomes.

“If a manufacturer has a really good drug, the idea is to consider how to enable access [to it],” Licking said. “This is when a manufacturer should be figuring how to use an innovative contract. If these are the best things medically, we have to figure out how to get them to people.”

But because of the upfront costs, Wegovy and Zepbound are being reserved for patients with more severe cases until additional supplies become available from competitors. 

IPD Analytics estimates a per-member-per month cost increase of about $15 for a 1-million-member health plan if 10% of eligible adults take GLP-1 therapies for weight loss. If uptake increased to one-third of eligible adults, the cost could increase to $50.

“We still have distorted views of obesity not as a medical condition but a lifestyle choice, and that affects the treatment protocols and guidelines,” Linking said.

There is recognition of the benefits achieved from weight loss. Semaglutide, the active ingredient in Ozempic and Wegovy, reduced the risk of serious cardiovascular events by 20% in overweight and obese people with established cardiovascular disease. In March 2024, the FDA approved Wegovy for an additional indication: to reduce the risk of cardiovascular death, heart attack and stroke in adults with cardiovascular disease and who are obese or overweight.

Additionally, Novo Nordisk USA, the manufacturer of Wegovy, released in March 2024 the results of a study that showed semaglutide reduced kidney disease progression, major cardiovascular side effects and death by 24%.

Eli Lilly and Company, the manufacturer of Zepbound, announced data in April 2024 from a phase 3 trial showing that tirzepatide reduced sleep apnea severity by up to almost two-thirds in those with obstructive sleep apnea and obesity.

Novo Nordisk declined to comment about whether it would consider an outcomes-based agreement for the obesity medication. Lilly did not respond to requests for additional information.

Employers surveyed by Mercer are implementing utilization management strategies such as prior authorization and reauthorization requirements when they do provide coverage for the weight-loss products. Additionally, 60% of those surveyed said they are interested in implementing a program that combines a therapy for weight loss with counseling and nutrition support. Of those surveyed, 11% already have such a program or plan to add one in 2025.

Support programs could help patients with persistency, suggests an analysis from real-world integrated pharmacy and medical claims data by Prime Therapeutics/Magellan Rx Management. This analysis showed that just 27% of members were adherent to their GLP-1 therapy for weight loss at one year.

Although persistency may be challenging, some expect that because of the added health benefits from GLP-1 therapies, some people may be taking these drugs long-term.

Going forward, spending on the GLP-1 class of therapeutics is expected to grow by 378% to $8.1 billion by 2027, according to data from the IQVIA Institute for Human Data Science. IQVIA expects two to five additional launches of GLP-1 therapies by 2027.