Cost of popular new weight-loss drugs could bankrupt some companies, Blackstone chief warns

• At a health care conference, executives debated whether employers should pay for workers’ weight-loss drugs.
• A Blackstone executive warned that expensive GLP-1 drugs could put some employers out of business.
• Panelists agreed that companies covering drugs should do so as part of a broader support program.

As more people seek out expensive drugs that help with weight loss, their companies face tough decisions about whether to pay for them.

For some companies, it just doesn’t make financial sense, an executive at private equity giant Blackstone said Tuesday during a panel discussion at the HLTH conference in Las Vegas.

Andreas Mang, CEO of Equity Healthcare, a division of Blackstone, said spending on these diabetes and weight loss drugs, known as GLP-1 agonists, has increased by 600% in Blackstone’s portfolio over the past four years. Taking on these huge costs is not practical for companies in industries like hospitality, where employees don’t stay long.

“The cost side of the equation is real. It’s going to put pressure on businesses. And if this continues, businesses are going to go out of business, because they literally won’t be able to do anything but pay for GLP-1,” he said.

GLP-1s, such as Ozempic, Wegovy and Mounjaro, have gained popularity. The drugs are effective: They can help people lose 15 to 20 percent of their weight, which is more than previous generations of prescription drugs.

But they are also expensive. A month of these injections can cost around $1,000 or more. And with more than 40 percent of Americans considered obese, the costs for those who typically pay for health care, like employers and state governments, could be crushing. Employee benefits company Aon recently forecast that employer health insurance costs will rise 8.5% next year, fueled in part by weight-loss drugs. This dynamic has given rise to a heated debate over who should use these drugs and who should foot the bill.

Dr. Melynda Barnes, chief medical officer of digital health startup Ro, which prescribes weight-loss drugs, argued on the panel that the conversation around these drugs should focus less on the bottom line for employers and health plans. Whether or not someone receives a GLP-1 drug should be a conversation between the patient and their doctor, she said.

“What’s really scary is that we’re using the cost of a drug that won’t be as high for the duration of our lives as a reason to influence the type of drugs people have access to,” he said. she declared.

She continued: “There is a negative stigma attached to obesity and now they feel like they have a chance in life, whether it’s having children, playing with their children, go on vacation, take a flight to Europe without having to buy a second seat.”

Panelists generally agreed, however, that if employers decide to cover medications, they should do so as part of a broader program that helps these workers adopt better eating and activity habits or provides support for side effects. .

“When applied in a system that provides ongoing support to an employee, they make perfect sense, but just releasing them, releasing them without any form of support, I think it’s a recipe for disaster. And I also believe it’s a waste of money,” said Lucia Guillory, chief human resources officer of Virta Health, which helps people reverse type 2 diabetes through nutrition and to coaching.

Wei-Li Shao, president of Omada Health, said employers should cover the medications alongside a support program that ensures patients who take them get the best results.

Omada, a diabetes management company, launched a program earlier this year to help companies manage their employees’ use of weight-loss medications and provide them with additional lifestyle support, both when ‘they take medication and when they stop. Shao said some companies working with Omada have chosen to cover drugs for a limited period, such as one or two years.

“We need to build solutions that can accompany GLP-1s,” Shao said. “They’re not going to go away. Pharmaceutical companies will spend billions, if not tens of billions of dollars, to ensure their commercial success. So how can we create complementary programs and support programs that not only amplify the effectiveness of these products, but also make them affordable ? in the long term?”