Photo Illustration of the new Wegovy semaglutide tablets with injectable prescription weight loss medicines, Ozempic, Victoza and Wegovy. Its a prescription medicine used with a reduced calorie diet and physical activity. (Photo by: Michael Siluk/UCG/Universal Images Group via Getty Images)
UCG/Universal Images Group via Getty Images
The latest report on rising employer healthcare costs shows GLP-1 weight loss drugs like Ozempic, Zepbound and Wegovy are the biggest contributors to rising prescription spending.
And that’s not good for employee out-of-pocket costs.
Take last week’s 2026 Milliman Medical Index report showing the annual cost of insuring a family of four eclipsed $35,000, rising 7.2% between 2025 and 2026. Of that, Milliman estimates the family’s “expected employee contribution plus out-of-pocket costs” is 58% of the total, or about $15,000.
“Pharmacy is the fastest-growing cost component of the MMI in 2026, rising 14.8% year-over-year for the average person,” the Milliman analysis, which estimated prescription drug costs at 13% of total 2026 family health spending, or $4,700. “There are many factors at play when it comes to increasing healthcare costs for employers and employees. GLP-1 drugs for diabetes and weight-loss management have become a meaningful and growing component of pharmacy spend, and will continue to impact employer pharmacy costs in 2026.”
When employer healthcare costs rise, companies almost always shift more costs onto their workers in the form of premiums that employees pay out of their paychecks or various cost-sharing whether it be co-payments or deductibles.
Even before this year, employers were contemplating whether to cover GLP-1 drugs at all or whether to stop covering them altogether. “The percent of employers covering GLP-1s for conditions other than diabetes will stagnate as employers try to stabilize their health care costs, while more of those that cover these medications for weight loss will require utilization management, prescriptions from specific providers, participation in a weight management program and higher expectations from vendor partners to deliver sustainable, cost-effective financial models for this class of medications,” The Business Group on Health said in a report last August.
And a separate Business Group on Health analysis out earlier this year showed only 72% of employers covering GLP-1 drugs for weight management said “they were likely to continue that coverage in 2027, while 10% said they likely would not,” the employer organization said in a statement.
Meanwhile, a report last month showed specialty drug costs, including GLP-1 drugs, are even more of a challenge for health plans and employers to manage than the total cost of care. Two in five health plans, or 43%, ranked management of specialty drug costs as their top goal ahead of managing the total cost of care at 41%, according to a report released at Asembia ASX26 in Las Vegas by Pharmaceutical Strategies Group (PSG). The analysis was based on responses from 228 health benefits executives from health plans, employers and unions.
“Payers continue to prioritize managing specialty drug trend and total cost of care,” said Morgan Lee, vice president of research and marketing at PSG. “At the same time, they are working to develop effective coverage strategies for new drugs and expanded indications, take a more integrated approach across pharmacy and medical benefits, and reassess traditional arrangements, including their reliance on rebates.”