Delaware insurance official questions GLP-1s as major cost driver

GLP-1 costs have stayed nearly flat in recent years when accounting for rebates, according to an analysis from the Delaware Department of Insurance’s Office of Value-Based Health Care Delivery.

Based on this finding, Trinidad Navarro, the state’s insurance commissioner, questioned whether the drugs’ high nominal prices are behind the state’s rising health insurance costs.

GLP-1 use and spending almost doubled for fully insured commercial members in the state from 2020 to 2023. On average, members paid 22% of the overall cost per GLP-1 prescription, net of rebates. Insurers received roughly 90% of rebates, while members got less than 1% at the point of sale.

“It’s long been suggested that the cost of GLP-1s have been a primary contributor to rising health insurance costs, but this data shows that simply is not the case. Considering the rebates from drug manufacturers and other entities, even with increased utilization, they are not a substantive cost driver,” Mr. Navarro said. “While we can’t necessarily quantify the other savings they produce — for example, by managing chronic conditions, preventing emergency care and reductions in other medications — GLP-1 medications are proving to be an important cost-effective tool in managing obesity and diabetes.”

The office plans to analyze all medications with hopes of illuminating more context around GLP-1 costs.

Here’s what else to know about the role GLP-1s play in health insurance:

1. A handful of states — Idaho being the most recent — are cutting back on coverage of GLP-1s prescribed for weight loss for state employees, citing cost pressures to employee premiums.
2. Delaware still covers GLP-1 drugs for weight loss for state employees, despite some reported budget strain. The report from the insurance commissioner excludes data on Delaware’s public employees, as they are not inclusive of rebates.
3. Some insurers, such Cigna, Molina Healthcare, and BCBS plans, have been citing GLP-1s as a source of cost pressures in recent years.

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