Vancouver Benefits Summit 2024: What do plan sponsors need to know about covering obesity medications?

Vancouver Benefits Summit 2024: What do plan sponsors need to know about covering obesity medications?

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

“Not many employers have the resources and the money to cover everything. It becomes a question of value and assessing the decisions that we make for our employees and our program. When an employer decides to add something to their plan, there are going to be a lot of considerations because there is an opportunity cost to invest the money there and not somewhere else.”

Obesity is recognized as a complex and chronic disease by the World Health Organization and other public health agencies and is characterized by excessive fat accumulation that can affect a person’s health and well-being and increase the risk of developing other chronic diseases. A 13 percent weight loss for an obese person can reduce the risk of type 2 diabetes, sleep apnea, hypertension, asthma and dyslipidemia.

However, new weight-loss drugs come with a hefty price tag of about $4,500 per molecule, plus associated pharmacy costs, insurance taxes and overhead, Laplante said. “We really want to make sure that the money we’re putting into it is being used for health reasons.”

Canada’s four largest insurers have taken different approaches to ensuring that they cover only medically necessary uses of these drugs. All four insurers currently cover anti-obesity drugs on their general drug lists, leaving it up to plan sponsors to decide whether to offer coverage through their plans. Some have chosen to cover the drug to the full extent the plan allows, while others have introduced prior authorization procedures, such as approving plan members with a slightly lower BMI but a comorbidity or a higher BMI without comorbidities.

Read: What plan sponsors need to know before Canada rolls out new obesity drugs

Employers who want to discourage the cosmetic use of these drugs could set annual or lifetime caps, Laplante said. Eckler typically sees annual caps between $1,500 and $10,000 and lifetime caps between $10,000 and $25,000.

Plan sponsors can work with consultants to get a rough idea of ​​the percentage of their employees who would benefit from the drugs, based on incidence rates in the general population. This will give them an idea of ​​the financial impact of covering the drugs.

However, not all eligible plan members will actually use the drug. Eckler recently worked with a plan sponsor with 200 employees, and their modeling suggested that about 57 employees would qualify. After setting an annual cap of $1,800, only three employees claimed the drug in the first year, which amounts to one percent of health insurance premiums.

Laplante said coverage for dietitians and nutritionists, exercise and health professionals such as kinesiologists, and mental health support such as psychologists and internet-based cognitive behavioral therapy could also support plan members with obesity.

Learn more about the 2024 Vancouver Benefits Summit.