GLP-1s Now ‘Predominant Driver’ of Drug Spend Growth

GLP-1s are driving a historic rise in traditional drug spending, helping it outpace specialty drug spend for the first time.

The annual growth rate of spending for traditional drugs — medications used to treat common health problems such as infections, high cholesterol, and diabetes — soared from 2.1% in 2021 to 12.8% in 2024, according to new data from Evernorth, the health services division of insurer Cigna. By contrast, the annual growth rate for spending on specialty drugs — high-cost, complex medications typically used to treat chronic conditions — slowed over the past few years, going from 9.2% in 2020 to 5% in 2021 and 4.9% in 2024. Traditional drug spending surpassed specialty drug spending in 2023 after a dramatic rise between 2022 and 2023, according to Evernorth’s report — driven by the demand for and usage of GLP-1s, or glucagon-like peptide-1 receptor agonists.

In 2024, drugs targeting weight management accounted for about half (46.8%) of the total increase in drug spend and were equivalent to 6.7% of total drug costs, according to Evernorth’s figures, which are based on data from roughly 28 million people with commercial insurance coverage. Among those weight loss drugs, GLP-1s were the “predominant driver,” the report said, with net trend jumping more than 200% in 2023.

“Since the approval of semaglutide for chronic weight management in 2021, traditional drug spending has increased dramatically,” according to Evernorth’s report. “The annual growth rate of spending changed from 2.1% in 2021 to 12.8% in 2024, marking a historic shift in pharmaceutical spending.” The report added that higher demand for therapies to treat chronic conditions and higher-cost drugs are other contributors to this shift. 

In 2025, Evernorth projects that the annual growth rate for specialty drug spending will be 4.1%, while traditional drug spend will grow by 12%.

The finding comes as GLP-1s become increasingly popular and in demand from employees. Nearly one-third of commercially insured households report that someone in the household has used GLP-1s, Evernorth found.

As a result of the increased attention — as well as the promise for health improvements — employers are increasingly covering the drugs for weight loss. The majority of organizations (76%) provide GLP-1 drug coverage for type 2 diabetes, according to a 2023 survey from the International Foundation of Employee Benefit Plans, while 27% of employers provide coverage for weight loss. Another 13% said they were considering providing coverage for weight loss.  A separate survey from consulting firm Mercer last fall pointed to even greater interest, with more than a quarter of employers saying they are considering adding coverage for GLP-1 drugs for weight loss in 2025 or 2026.

“Generally, most employers understand the need for weight loss medications to prevent diseases and comorbid conditions, and know obesity can lead to heart disease, diabetes, and other complications,” said Nelly Rose, vice president of clinical pharmacy, Rx Solutions, at NFP, a global benefits consultant and property and casualty insurance broker.

Obstacles 

Despite promise for the drugs — numerous studies have pointed to potential health benefits — there are some downsides. In addition to the rapid uptake of GLP-1s, which may result in supply issues and presents a challenge for employers in terms of managing the tremendous price tag, Evernorth analysts said there are high discontinuation rates, noting that more than 50% of patients using GLP-1s for weight loss stopped treatment within 12 months. Discontinuation is due to reasons including side effects, safety concerns, users saying they no longer thought using the medication was necessary, and financial concerns.

That may be part of why some experts say employers shouldn’t solely rely on GLP-1 drugs for weight loss management.

“Many well-being and weight management platform providers have quickly pivoted to integrate GLP-1 solutions into their offerings. While this can be innovative, employers should proceed carefully,” said Deb Smolensky, SVP and global practice leader, vitality and well-being solutions, at NFP. “It’s critical to ensure these solutions go beyond simply dispensing medications and include access to clinical oversight, coaching, education, and ideally, partnerships with obesity medicine specialists, which most solutions don’t offer. A holistic, responsible approach is essential to achieving long-term employee well-being and sustainable outcomes.”