GLP-1 drugs like Ozempic, Wegovy, Mounjaro, and Zepbound have gained widespread attention for their effectiveness in aiding weight loss and managing Type 2 diabetes. About 1 in 8 US adults have taken a GLP-1 medication, and demand continues to grow with up to 35% of Americans expressing interest in using them. However, this popularity comes with a hefty price tag. Sequoia data finds that GLP-1 medications average around $1,000 per prescription, posing financial challenges for employers who provide health benefits.

According to Sequoia’s 2025 Wellbeing Trends report, 26% of employers cover GLP-1 medications, with an additional 20% planning to add coverage in the next year. The likelihood of coverage increases as company size grows, with 40% of companies with more than 500 employees currently covering GLP-1 medications.

The high cost of GLP-1 drugs is a significant concern for employers, especially those in the tech industry, where competitive benefits packages are key tools for attracting and retaining top talent. Covering these medications can lead to significant healthcare costs, making it imperative for employers to find innovative ways to manage these expenses.

Here are a few examples of cost-saving strategies for companies who cover GLP-1 drugs.

Innovative Cost Containment Strategies

Intensive lifestyle change programs: Lifestyle and behavior change programs that focus on nutrition, physical activity, and mental health can significantly reduce reliance on GLP-1 drugs to sustain weight loss. These programs help employees adopt healthier lifestyles, which can lead to weight loss and improved health outcomes without the need for expensive medications. Our wellbeing trends report found that 11% of companies are currently offering lifestyle change programs, with 9% planning to explore a solution this year.

Step therapy: Step therapy is a cost containment strategy that requires patients to try less expensive treatments before progressing to more costly options like GLP-1 drugs. This approach ensures that GLP-1 medications are used only when necessary, potentially reducing overall healthcare expenditures.

Prior authorization for expanded uses: Requiring prior authorization for GLP-1 drugs prescribed for uses beyond diabetes treatment can help employers control costs and ensure the medications are used appropriately. This process verifies medical necessity, prevents misuse, and promotes cost-effective care, ultimately reducing unnecessary spending on expensive medications.

Balancing Cost Containment and Employee Access

As employers seek ways to manage the high cost of GLP-1 drugs, they must also ensure that employees have access to the treatments they need to maintain their health and productivity. Here are some ways employers can strike that balance.

  • Negotiate pricing: Work with pharmaceutical companies and pharmacy benefit managers to secure better pricing for GLP-1 drugs.
  • Limit quantities dispensed: Limiting the quantity of GLP-1 drugs dispensed can also help control costs. By restricting the supply to a one-month quantity, employers can prevent overuse.
  • Require documentation: Requiring documentation of body mass index (BMI) or weight-related comorbidities is a common strategy. Sequoia’s report shows 19% of companies are currently implementing this requirement, with an additional 5% adopting it for the first time this year.

GLP-1s are just one wellbeing benefit that employers are covering in 2025. To learn more about how companies are building their wellbeing programs, download the 2025 Wellbeing Trends Report.

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How Sequoia Can Help

“GLP-1s are here to stay. They have revolutionized the way clinicians treat obesity as a chronic condition while simultaneously highlighting the inequity and opaqueness around pharmacy drug pricing practices,” said Nelsie Nelson, Sequoia’s director of pharmacy. “We advise our clients, mostly employers in the technology space, on how to balance plan needs like cost reduction while retaining and attracting employees with accessibility and affordability through a multitude of innovative management strategies to meet our clients’ needs. Our Sequoia pharmacy advisory team is here to help you navigate the evolving market.”

If you’re interesting in exploring how Sequoia can help design a plan that manages pharmaceutical and healthcare costs, reach out to a Sequoia advisor.

Shannon Arens — Shannon is a Senior Wellbeing Strategist at Sequoia, specializing in market insights, industry trends, and strategic initiatives to enhance employee wellbeing for clients. With a keen eye on the ever-changing wellbeing landscape, Shannon is focused on helping employers prioritize what will best address the needs of their people. Outside of work, Shannon enjoys spending quality time with family, staying active through exercise, and connecting with friends.