University of Texas dropping weight loss drug coverage for employees

The University of Texas System is planning to drop coverage for weight loss drugs such as Wegovy under its employee and retiree health plans, citing high costs and low adherence rates.

Austin-based UT System is one of the largest employers in Texas, with more than 116,000 employees across the state.

In an online update to its employee benefits guide, the organization said its employee health plan (UT Select) and its Medicare plan for retirees (UT Care) will no longer cover weight loss medications, effective Sept. 1.

"Cost analysis on these medications indicates they are currently the costliest prescription drugs paid for by the plan on an annual basis, even more costly than medications for complex conditions like cancer," the update said. 

The UT System wrote that the cost to cover weight loss drugs has increased from $1.5 million per month to $5 million per month over a period of 18 months ending in May. Currently, 3,100 members are using weight loss medications.

At the same time, the organization recorded a 46 percent adherence rate for members who were prescribed a weight loss medication. A Prime Therapeutics study released in July found that about two-thirds of patients who take popular weight loss drugs end their regimen within a year.

The UT System said it would reconsider the new policy if costs and adherence rates improve, but the current coverage policy would result in $73 million in extra spending on prescription plans annually, or an increase of up to 3 percent for member premiums.

The UT System's decision comes after Ascension, a St. Louis-based health system with 139,000 employees, made the same decision to no longer cover weight loss drugs under its employee health plan.

GLP-1 drugs come with a steep price tag, costing upward of $10,000 per year without insurance. As demand continues to surge, the nation's largest payers told investors in the first quarter that coverage of GLP-1s has been almost entirely constrained to diabetes care. In a June survey from the Pharmaceutical Strategies Group, 49 percent of plans surveyed said they currently cover medications for weight loss, compared to 41 percent of employers.

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