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GLP-1 Drugs Reduce Health Costs for Employers over Long Term
While employers mull whether to cover GLP-1 drugs, new research gives a potential reason to: big cost savings for employers over time and better health outcomes for employees.
Sustained use of GLP‑1 therapies can significantly reduce medical cost growth over the long term for employers and improve workforce health outcomes, according to new analysis from consulting firm Aon.
Aon analyzed U.S. commercial health claims data from more than 192,000 GLP-1 users across 50 million commercially insured lives, examining workforce health outcomes tied to sustained GLP-1 use and long-term employer cost trends.
For instance, diabetes patients adhering to GLP-1s saw medical costs drop 6%–9% after 30 months, compared to diabetes patients who didn’t use GLP-1 drugs. Similarly, those using the drug for weight loss had 3%–7% lower costs within 18 months, according to the analysis.
Meanwhile, Aon found, GLP-1 use reduces cancer risk for women: Female GLP-1 users experienced a 47% reduction in hospitalizations for major cardiovascular events, approximately 50% lower incidence of ovarian cancer, and a 14% lower incidence of breast cancer, compared to female non-users, according to the analysis.
The research, said Lisa Stevens, chief administrative officer of Aon, “demonstrates the power of GLP-1 therapies to transform health outcomes, with especially promising results for women — including substantial reductions in cancer and heart risks. This progress offers real hope for advancing population health and helping millions of people lead healthier, fuller lives.”
GLP-1 drugs have been a big decision point for employers in the past several years. The costs of the drugs — the brand-name injectable drugs typically cost between $1,000 and $1,500 a month for consumers, and employers may foot 70% to 100% of that bill — have been significant and have given many employers pause about covering them.
While most employers cover GLP-1s for diabetes management, many — often self-insured employers that generally have more control over which drugs to cover — are debating the merits of weight loss coverage.
Roughly a quarter of employers (23%) offer GLP-1 drug coverage for type 2 diabetes and/or weight management, according to the 2025 SHRM Employee Benefits Survey.
Though many have expected that number to grow, other industry experts have said that some employers might back off from coverage due to the hefty financial toll of offering the drugs for weight loss.
“While the trend over the past couple of years has been to add coverage for GLP-1s approved for weight loss, some employers facing large cost increases in 2026 may feel this coverage is out of reach,” Alysha Fluno, national pharmacy practice leader at Mercer in Vernon Hills, Ill., said last fall.
Rising Health Care Costs
Aon’s data comes amid other reports that GLP-1 costs are weighing heavily on employer health costs.
Health costs are projected to jump another 6.7% in 2026, rising to $18,500 per worker on average, even after accounting for planned cost-reduction measures, according to consulting firm Mercer. If employers do not make any changes to their current plans, the overall average increase would reach nearly 9% on average.
And Aon similarly found that health care costs will increase by 9.5% for employers in the U.S. this year, with prescription drugs making up around 30% of total health care costs. Prescription drug costs are increasing around 13%-15% annually — and GLP-1 costs are fueling much of this growth as they currently comprise roughly 20% of total prescription drug costs. Total GLP-1 spend increased around 50% in 2025 due to heightened utilization, according to Aon data.
“Rising health care and pharmacy costs — especially the affordability of high-demand drugs like GLP-1s — will dominate employer and plan sponsor concerns in 2026,” said Megan Yost, senior vice president of thought leadership and insights at Segal, a New York City-based HR and benefits consulting firm.
Despite higher short term cost increases, employers should think carefully about how offering such medications can help longer term, Aon analysts said. Cancer is one of employers’ top health cost drivers, while obesity contributes to more than 60 chronic conditions and results in 66% higher annual health care costs for affected individuals, costing the U.S. economy up to $1.72 trillion each year.
“Conditions like obesity, diabetes and cancer are among the most pressing health challenges facing employees, their families, and the organizations that support them,” Stevens said.
This article is courtesy of Society for Human Resource Management (SHRM)
