Approximately 14% of U.S. employers have already dropped or plan to cease coverage for GLP-1 weight-loss drugs by 2027, according to a survey released Tuesday by the Business Group on Health. The organization, which advocates for employer health policy, reported that rising healthcare costs are driving companies to reconsider benefits for these medications. The survey included employers ranging in size from fewer than 5,000 to more than 100,000 employees.
The survey found that the percentage of employers covering GLP-1 drugs for weight loss has already declined from 72% in 2025 to 60% in 2026. GLP-1 drugs, including Wegovy produced by Novo Nordisk and Zepbound by Eli Lilly, function by mimicking a hormone that maintains a feeling of fullness. Without cost-management changes, the Business Group on Health projected that employer healthcare costs will rise 9.2% in 2027, an increase from the 8.5% growth seen in 2026.
Pharmacy costs currently account for 25% of total employer healthcare spending and are expected to grow by 12% in 2027. Two-thirds of surveyed employers reported increased utilization of GLP-1 medications. While these drugs are a factor, cancer remains the primary driver of healthcare spending, cited by 70% of firms as their most acute cost source, followed by musculoskeletal and cardiovascular conditions. Manufacturers' monthly list prices for these medications are $499 for Zepbound and $1,349.02 for Wegovy.
The scale of this shift is reflected in the 12-percentage-point drop in coverage observed between 2025 and 2026, with an additional 14% of employers expected to exit the market by 2027. Ellen Kelsay, president of the Business Group on Health, stated that these rising costs are creating significant budgeting difficulties for employers. To manage these expenses, companies are increasingly moving toward cheaper biosimilars—which are near-identical copies of biologic drugs—and exploring alternative pharmacy arrangements or dropping coverage for other specialty medications.
The broader impact involves a re-evaluation of how employers deliver health benefits as they face consecutive annual cost increases dating back to 2022. While the current focus is on weight-loss medications, the Business Group on Health noted that costs are also being pushed upward by complex therapies for cancer and heart disease. Employers who maintain coverage may still implement more restrictive policy changes to manage the 12% projected rise in pharmacy spending. The next phase of this trend will be determined as companies finalize their 2027 benefit packages and open enrollment periods.