Why Some Employers Are Scaling Back GLP-1 Coverage in 2027

A new survey from Business Group on Health confirms what benefits managers have been anticipating for months: nearly eight in 10 employers report that GLP-1s are driving an increase in their company's overall health care costs, and the financial pressure is now translating directly into coverage pullbacks heading into 2027.¹

What Do the Survey Results Demonstrate?

While 67% of surveyed employers currently cover GLP-1s for weight management, only 72% of that group said they were likely to continue such coverage in 2027, with 10% saying they likely would not.¹ A separate survey from benefits consultancy Mercer found that 5% of large employers — defined as those with more than 500 employees — are actively planning to drop GLP-1 coverage next year.² Mercer also reported that just 44% of companies in that size band currently cover the drugs for obesity, compared with the 67% that Business Group on Health found among its employer membership — a gap that reflects how coverage rates vary by employer size.

The rollback is already visible at the plan-sponsor level. Health insurer Cigna ceased coverage of GLP-1 weight-loss treatments for its own employees effective July, with the company noting employees could purchase the medications elsewhere.²

According to Ellen Kelsay, president and CEO of Business Group on Health, the report shows “the tremendous concern employers have regarding these medications from a cost and financial viability perspective."¹

"Against the backdrop of anticipated double-digit health care cost increases, fueled to a large degree by GLP-1s and overall prescription drug costs, companies cannot ignore the reality that GLP-1s have significant implications for health care budgets — and overall affordability," Kelsay said in a press release.¹

The survey, completed in February and March 2026 by 105 employer members of Business Group on Health, captures what is increasingly being described as a structural inflection point for GLP-1 market access. Fully 87% of employers anticipate that the availability of an oral GLP-1 medication will result in higher demand overall, and only 9% expect any decrease in price.¹ The implication for plan sponsors: expanded formulation options are a utilization accelerant, not a budget solution, and the cost problem is not expected to self-correct.

Why Are Employers Cutting GLP-1 Benefits?

In a conversation with Pharmaceutical Commerce, Jay Bregman, founder and CEO of direct-to-employer platform Andel, shares that he had been tracking this dynamic in direct conversations with benefits leaders across the country. Bregman described the employer perspective in blunt terms: "It's just completely unaffordable. And no matter how many step therapies, utilization management, whatever we put in, the employees become more upset. We don't really save any money. The utilization keeps going up. It's just impossible to manage.”

That frustration spans employers from organizations with a few hundred covered lives to those with tens of thousands, pointing to a pricing transparency gap that the emergence of direct-to-consumer channels has made difficult for plan sponsors to ignore.

Bregman also notes that the gap is structural — a function of PBM intermediation that inflates employer costs relative to cash-pay benchmarks and is unlikely to self-correct within the existing system.

The Business Group on Health survey documents how employers are managing costs within the current framework in the interim. Common strategies include validating clinical eligibility via objective biometric data, requiring participation in a weight management program as a condition of coverage, limiting prescribing to specific providers, and excluding certain medications from the formulary. Despite these controls, more than half of employers covering GLP-1s for weight management expect the medications to yield significant clinical benefits, though few have yet seen evidence within their aggregated claims data — such as reductions in obesity rates or decreased bariatric surgery utilization.¹

Additionally, nearly eight in 10 employers have elevated GLP-1 coverage decisions to executive leadership, a measure of how far up the organizational chain the financial exposure has migrated, and for most, cost-sharing remains unchanged: 83% of employers apply the same cost-share arrangement to GLP-1s as they do for other medications.¹

What Does the GLP-1 Coverage Pullback Mean for Pharma?

GLP-1s were originally developed to regulate blood sugar in type 2 diabetes and have since demonstrated substantial weight loss outcomes, with emerging clinical evidence across cardiovascular disease, obstructive sleep apnea, and substance use disorder. That expanding clinical profile makes coverage restriction a more complicated decision than simple cost avoidance: curtailing access carries its own downstream risk assumptions about long-term workforce health costs, a tradeoff that benefits teams and executive leadership are now actively weighing together.

What the survey data make clear is that the default posture among large employers has shifted from cautious expansion to cautious contraction, and that absent a structural change in how employers access and price these drugs, that trajectory is likely to continue into 2027 enrollment cycles, with direct implications for GLP-1 utilization rates and manufacturers' commercial access planning.

References

1. Business Group on Health. "GLP-1 Costs Loom Large for Employers, Forcing Challenging Coverage Decisions, Business Group on Health Survey Finds." June 10, 2026. https://www.businessgrouphealth.org/newsroom/news-and-press-releases/press-releases/2026-glp-1-survey
2. Niasse, Amina. "Some US employers to drop coverage of GLP-1 obesity drugs in 2027 as use increases." Reuters. June 11, 2026. https://www.reuters.com/legal/litigation/some-us-employers-drop-coverage-glp-1-obesity-drugs-2027-use-increases-2026-06-11/