How Employers Can Build an Effective GLP-1 Strategy

1. Optimize PBM performance

Employers need to proactively engage with Pharmacy Benefit Managers (PBMs). The first step is to shift the way PBMs are compensated, moving from models that reward higher drug spending to flat per member per month (PMPM) fees, and insist that PBMs act as full partners in executing your strategy – you are their customer.

Employers should have full visibility into drug pricing, manufacturer rebates, and the methods used for utilization management, particularly regarding GLP-1s and other specialty drugs. Prior authorization protocols must be implemented to control inappropriate utilization, including clear criteria tied to dosage limits, patient demographics, and step therapy requirements. Additionally, employers should request data on prior authorization approval rates, targeting a threshold below 75% to ensure that only clinically appropriate prescriptions are approved. 

Finally, during PBM procurement and contract discussions, employers should ask pointed questions like, “What about my drug mix?”, with the goal of controlling costs, sharing financial risk, and aligning with the plan sponsor’s long-term financial objectives.

2. Control spending with clinical and weight management programs

A successful GLP-1 strategy goes beyond medication access. Employers and health plans should use aggregated data to proactively identify high-risk members and deploy targeted interventions, such as personalized weight management or lifestyle coaching programs. This allows plans to address root causes before they escalate into more expensive or acute care needs.

GLP-1s must be integrated into a broader, value-based care strategy rather than treating them as a single, one-off solution. Encouraging patients to participate in targeted lifestyle or weight-loss programs supports the appropriate usage of medications while also creating long-term behavior change.

The key to success is to cultivate a sense of shared responsibility among employees. Promoting healthier behaviors – like appropriate nutrition, regular physical activity, and adherence to prescribed medications – ensures that employees are active participants in their health outcomes.

3. Improve price transparency

Empowering employees to make informed, cost-conscious healthcare decisions begins with transparency. When patients understand the costs of care before filling a prescription, they are better equipped to navigate their healthcare costs. Transparent plan design should also steer members toward high-value care options, which includes identifying providers and services that deliver quality care at a fair cost.

4. Require value-based purchasing from drug manufacturers

Drug pricing must be directly tied to the health outcomes the medication delivers. Employers should require value-based agreements for these drugs as pharmaceutical companies can charge whatever they want for the drug. For example, if purchasing the drug results in fewer heart attacks and leads to cost savings, employers should share those savings with the drugmaker but also hold them accountable if the drug fails and doesn’t produce that benefit. 

In tandem, a more sustainable model would be to compensate PBMs based on actual performance, measured by their ability to both improve health outcomes and manage pharmacy spending. Tying PBM earnings to results realigns incentives and ensures that PBMs are working towards a shared goal: delivering better health outcomes to patients at a price that reflects the true value of those outcomes. 

5. Collaborate with other employers to disperse and diversify costs

Working together, employers can mitigate the short-term cost increases of GLP-1 usage while identifying and capitalizing on broader opportunities for value-based care, cost savings and better outcomes across a large, diverse patient population. Bringing large employers together with the collective goal of improving people’s lives and making healthcare more affordable can result in significant cost savings and better outcomes for employees and their families. Aligning benefit plans with provider incentives has a powerful impact on improving access, making high-quality care more affordable, and moving us closer to fixing our broken healthcare system.