Can GLP-1 therapies like Ozempic reshape healthcare economics?

As well as helping Hollywood stars lose weight, GLP-1 therapies like Ozempic are a very effective treatment for type 2 diabetes and, perhaps more importantly, show promise for the treatment of many other serious conditions.

They have the potential to significantly alter cost structures, improve patient quality of life, and reduce long-term healthcare expenses.

GLP-1 therapies could, therefore, reshape the economics of health plans, patient care strategies, and the long-term outlook of health outcomes.

Given this, healthcare payors, providers, and regulators need to determine what their strategy is for GLP-1 therapies.

Here are six questions they need to be asking now:

1. Can the higher costs of GLP-1 therapies be managed through formulary redesign and prior authorization requirements?
2. Will the cost reductions tied to treating and avoiding certain chronic conditions outweigh the increased drug costs?
3. With GLP-1 therapies potentially reducing emergency room visits and hospitalizations, how will health system utilization patterns change?
4. How might patient adherence and disease management evolve with changing utilization patterns?
5. Will outcome-based contracts with certain manufacturers and providers evolve based on the clinical outcomes of GLP-1 therapies?
6. Should integrated care models be offered for certain populations?

At Pepper Foster Consulting, we have been speaking with our clients about the potential of GLP-1 therapies and have worked with many clients on driving cost-benefit analyses, conducting focused assessments, and understanding the voice of the customer.

We’re happy to share the insights that we’ve been hearing and would love to learn more about how you are thinking about the impact of GLP-1 therapies.