Formulary

• A formulary is a list of medications and supplies chosen for plan coverage based on efficacy, safety, and cost-effectiveness. These products may be placed in different coverage tiers with utilization management (UM) criteria applied to control costs and ensure appropriate utilization.

• Each PBM has its own standard formularies available for use by commercial employer clients.

• Employers may have the option to create custom formularies with their PBM.

Cost Share

Member cost share is defined by the plan and varies by formulary coverage tier. Traditional cost sharing arrangements include the following provisions:

• Deductible: Set amount each member pays out-of-pocket for covered services before insurance coverage begins.

• Copay: Fixed amount a member pays out-of-pocket for medication coverage after the deductible is met.

• Coinsurance: Percentage of a covered health cost that a member is responsible for paying after meeting the deductible.

• Out-of-Pocket Maximums: This is the most a member must pay for covered services in a plan year. After a member spends this amount on deductibles, copayments, and coinsurance, the plan pays for 100% of the costs of covered benefits.

• Plan defined benefit is the maximum amount a plan sponsor pays for the covered benefit per member per month or per year. This option is less prevalent; however, it is a viable model for future considerations.

Rebate

• A form of price concession paid by a pharmaceutical manufacturer to the health plan sponsor or the PBM working on the plan's behalf. Rebated discounts given after the purchase of specific medications reduce the net cost of the medication for the payer. Manufacturers offer these rebates in return for coverage preferred position on the PBM formulary.

Participating Pharmacy

• List of retail and home delivery pharmacies that are in-network to dispense covered medications.

• Because of supply chain dynamics which often result in brand drug reimbursement below product cost, retail pharmacies have experienced financial challenges when dispensing GLP-1s. This has resulted in many retail pharmacies deciding to discontinue dispensing these drugs. PBM mail order pharmacies have also restricted distribution of these products due to their negative impact on the PBM’s ability to meet payer financial guarantees.

• Pharmacy Fill Location - benefit provisions may vary depending on whether members fill prescriptions at a participating mail order pharmacy or participating retail pharmacy. Payers may restrict certain medications, such as GLP-1s to specific preferred pharmacies or pharmacy types to limit the amount dispensed (e.g. maximum one-month supplies) and minimize potential waste, particularly during initial dose escalation. GLP-1 medications dispensed as compounded formulations should be excluded from the benefit. Compounded GLP-1 products are not approved by the FDA, and the FDA as well as leading obesity organizations have issued warnings based on safety concerns.

Types of Coverage Available

Traditional: A medication is covered on the formulary, meaning employees have access to the medication pending any utilization management requirement.

Addendum: An addendum provides supplemental coverage to a base health plan policy. This supplemental change can also be applied to a formulary to extend coverage to additional medication. An addendum can be incorporated at any time.

Third Party Carve Out: Plans may opt to carve out AOM benefits from their current PBM and outsource access to AOM’s to a third-party or point-solution vendor for an additional fee. Many third-party vendors offer specialized clinical expertise and comprehensive management in addition to providing access to medications. Components of carve-out services can include:

• Population health management member stratification

• Clinical, nutritional, behavioral, and lifestyle coaching in conjunction with prescribing medication

• Detailed analytics and outcomes reporting for the payer.

• Specialized expertise in disease states such as obesity, diabetes etc.

• Defined benefits paid by the plan sponsor

Pros

• Specialized AOM services provided to members

• May facilitate appropriate medication prescribing, comprehensive care, and control of medication spend

• May be viewed by employees as a valuable enhancement to the benefits package

• Ability to aggregate and analyze data on cost and health outcomes

Cons

• Additional vendor administrative burden

• Additional outreach may be necessary to coordinate care

• PBM may charge additional fees and/or adjust contractual guarantees

Benefit Design

Traditional value-based benefit

• Create optional comprehensive weight management program for members. Offer generic copay on medication if members enroll and participate in program. Charge brand copay if not enrolled or participating.

Defined benefit contribution

• Pay flat fee for one month supply of medication (e.g. $200). Member is responsible for remaining cost.

• Exclude AOMs from standard prescription benefit and provide a funded prescription savings card with a set monthly amount. Member utilizes manufacturer cash pay programs and/or shops for lowest cash price available for medication and pays the difference in price.

• Offer additional flexible spending account (FSA) funding when the member enrolls in and completes the behavioral and/or lifestyle programs associated with weight management over a specified timeframe. This may incentivize behavioral change, limit plan liability, and help the member with medication affordability by providing additional funding that can be utilized for prescription copays.

Offer additional health savings account (HSA) funding for all employees to help cover the cost of prescribed behavioral and/o lifestyle programs and weight loss medications that may be covered or excluded from the benefit.

Questions to Ask Your Health Plan and/or PBM:

Does the benefit design currently provide AOM coverage?

If AOMs are not covered:

• When was the last time AOM benefits were reviewed and discussed for coverage?

• Is there a business reason why the plan has chosen to exclude this benefit?

• Are there other anti-obesity therapies or treatments available to members?

• What type of utilization management programs are in place to address off-label use of GLP-1s for obesity? For example, new to therapy prescriptions may require Prior Authorization with a documented diagnosis of Type 2 diabetes and the use of metformin, with at least 14 days between prescription fills.

If AOMs are covered:

• What criteria do you incorporate to ensure that AOMs are appropriate and affordable for members who need them? Determine appropriateness of criteria for both new therapy initiation and renewals.

• Is there a comprehensive care management plan for members taking anti-obesity medications? How does the plan ensure that members have equitable access to treatment?

• Are lifestyle benefits, such as diet, physical activity and behavioral counseling also covered with these medications?

• What methodology or evidence do you use to manage access?

• How often is the utilization management criteria reassessed?

• Are the most cost-effective medications covered?

• What is the impact of formulary rebates?

• Does your PBM allow you to carve out benefit management and/or fulfillment of AOMs without penalties or contract adjustments?

Other considerations

• Does the medical carrier cover obesity treatment and does it reimburse for nutritional, exercise, and psychosocial benefits to address environmental influences impacting weight?

• Does the third-party administrator provide clinical engagement for obesity services reimbursed as a complex chronic disease along with the nutritional, exercise, and psychosocial benefit access?

• How does coverage for this class integrate or align with the organization’s broader obesity and weight management benefits strategy, such as bariatric surgery?

• Can a coverage rider buy-up be added (adjustment or add-on to basic policy) for this class? Is there more than one rider option available?

• What are the cost implications if the organization decides to cover these medications?

• Should the plan require members to be enrolled in a behavioral/lifestyle program as part of coverage or should the plan offer a value-based benefit design where member copay is reduced (e.g. generic copay apply) for patients who are enrolled versus standard cost share for those who are not enrolled?

• If coverage of AOMs is added mid-year, are rebate guarantees adjusted to account for the potential additional rebate revenue?

Clinical Guidance

There are publicly available clinical guidelines that provide guidance on defining and diagnosing obesity, how to approach obesity as a disease, and what parameters may be useful in classifying severity.

• The Lancet Diabetes & Endocrinology, Definition and diagnostic criteria of clinical obesity

• ACE / AACE Treatment Guidelines

• AMA Guidance on Use of BMI in Treatment

• AHA / ACC / TOS Treatment Guidelines

• Guidelines for definition of ASCVD

The definition of obesity and diagnostic criteria for obesity were updated by The Lancet (link above) in January of 2025. They recommend using BMI only as a population-level screening tool, with excess adiposity confirmed through direct body fat measurement or additional measurement criteria. It also distinguishes between "clinical obesity," where organ function is impaired, and "preclinical obesity," where function is preserved but risk remains.

Guidelines often suggest differing levels of treatment that intensify with the severity of the obesity classification or additional disease conditions.

Discuss any coverage and utilization management criteria with your PBM to determine alignment with current manufacturer contract requirements for rebate eligibility and resulting financial impacts.

Patient Identification Algorithms and Predictive Modeling

Clinical guidelines illustrate there is no one-size-fits-all approach for identifying the most suitable candidates for AOM access. Factors such as body mass index (BMI) and comorbidities may inform whether an individual would benefit from treatment.

Predictive modeling and data analytics are tools your health plan may utilize to target the most appropriate members for intervention. When choosing more narrow targeting of members, you will need to work with your PBM to verify that they can administer the targeting criteria and that it does not conflict with the PBM’s current programs and requirements. There are a number of point solution vendors in the market today that offer these targeting solutions as part of their program.

Questions to ask your Organization and Health Plan

What percentage of my members will end up utilizing AOMs? Typically, a plan may experience utilization of GLP-1s for weight loss ranging from 2% to 10% of the eligible population, depending on coverage criteria.

• It is important when stratifying eligible populations that members are not counted multiple times based on multiple covered disease states (obesity, diabetes, ASCVD with obesity etc).

What are the benefits and risks of covering AOMs more broadly (e.g. follow the manufacturer label requirements)? Alternatively, what are the pros and cons of covering more narrowly (e.g. limit access to patients with specific health complications)?

• Broad coverage that aligns with the full product label allows more members access to medications but may lead to a larger eligible population and increased medication costs.

• Narrower or more restrictive coverage allows the most at-risk members (e.g. those with type 2 diabetes or cardiovascular disease) to receive the medication and may result in a smaller eligible population. Narrower coverage may also result in the reduction or loss of manufacturer rebates and should be coordinated with your PBM.

• Requiring lifestyle management programs prior to or with therapy may also limit the treatment population.

• Restricting medication prescribing to a limited network of prescribers or a center of excellence may allow more control over patient eligibility, potentially without having to implement additional prior authorization criteria.

• Different levels of rebates may be available based on the level of coverage you provide and the restrictions or requirements that the plan sponsor chooses to put in place. Some PBMs and manufacturers have negotiated these “tiered” levels of rebates to allow more flexibility in coverage.

• When discussing coverage with your health plan, financial benefits and risks of a broad vs. narrow coverage strategy should be understood.

We cannot perform our own predictive modeling; what should we do?

• Your PBM may already perform some of these functions for you, and many third-party carve out vendors will include predictive modeling as part of their standard benefit offering.

• Some consulting firms can perform these analytics.

Medication therapy is one component of the solution, and an effective coverage strategy must include a comprehensive lifestyle and engagement program. Published studies demonstrate up to 26% waste in drug spend due to lack of engagement.

Coordinate with the health plan/PBM to determine what programs or support they offer to provide the services listed below. If there are gaps in these services, you may want to evaluate current or new vendors, such as point solution providers, to help fill these gaps to provide more comprehensive care. At a minimum, clinicians should educate members on risks, benefits and alternatives to AOM therapies, and members should regularly follow up to monitor weight, blood glucose, and kidney function among other health outcomes. Any prerequisite program participation requirements that are associated with AOM therapy approval should be discussed with the health plan/PBM to ensure that they align with any rebate requirement.

Lifestyle Support Programs with Holistic Member Support:

• Implement community/provider-based programs that promote a healthy lifestyle.

• Encourage holistic management of obesity, which includes mental and emotional support, in addition to physical health and lifestyle changes.

• Ask current vendors if they have an existing weight management program and what the specific capabilities are.

Personalized Nutrition Therapy/Counseling:

Provide personalized nutrition therapy and counseling to help members understand and manage their dietary habits.

Integration across Stakeholders:

• Facilitate communication among members, providers, employers, plan specialists, and primary care providers.

• Ensure regular and consistent engagement with all stakeholders.

• Optimize vendor effectiveness and impact by ensuring that they can access and utilize electronic health record data and medical claims data.

Telehealth Support:

• Leverage telehealth to facilitate regular provider contact for medication adjustments based on weight goals, safety, tolerability, and health outcomes.

• Use telehealth as a lower-cost, convenient option for regular engagement.

• Several organizations offer comprehensive obesity care models with obesity medicine specialists as part of their care teams.

Stability Prior to Prescription Therapy:

• Ensure that lifestyle modifications are implemented and showing stability when prescription therapies are being considered.

• Tie these modifications with key performance indicators (KPIs) to track progress. More detail on possible KPIs is described later in this framework.

Member Engagement Medication Therapy Support:

• Set realistic health goals and timeframes with members before starting medication therapy.

• Communicate potential side effects of medications to members and strategies for managing these side effects.

• Discuss dose escalation and the need for a gradual increase in dosage based on effectiveness and tolerability of the medication.

Monitoring and Evaluation:

• Regularly monitor and evaluate the effectiveness and safety of the holistic management approach.

• Use data-driven approaches to identify areas for improvement and implement necessary changes

Covered utilization: If your organization chooses to provide access to AOMs, there are multiple levers in place to manage utilization and costs.

Utilization management

The PBMs have standard utilization management (UM) programs to limit fraud, waste and abuse, and to ensure AOMs are prescribed to the appropriate patient population.

PBMs also offer programs that are more comprehensive in nature, such as EncircleRxSM from Evernorth (Express Scripts), Optum Rx Weight Engage, and CVS Weight Management Program. The range of services offered by PBMs should be evaluated and carefully compared with other third-party providers or point solution vendor program services to ensure they offer the best cost/benefit option for the payer and their members. Plan sponsors should also ensure that third party providers and point solution vendors can successfully integrate with the plan’s benefits and UM.

• EncircleRx from Evernorth (Express Scripts) offers financial guarantees for a flat per member per month (PMPM) fee. Participation in this program may impact rebates received for these medications.

• Optum Rx Weight Engage allows payers to configure different elements of the program. It helps members with behavior modification support such as diet and exercise planning through a live coach or digital platform.

• CVS Weight Management Program provides one-on-one support from a dedicated registered dietitian in a virtual setting, including personalized nutrition planning based on health needs, social determinants of health, and cultural and individual preferences, empowering members to develop sustainable habits for achieving long-term weight loss. The program may include return-on-investment (ROI) guarantees and other guarantees, depending on eligibility.

New start limitations

• Limit access to medications for initial prescriptions to a one-month supply to avoid waste if dosage is adjusted before the medication supply is used.

Indication limitations

• Limiting coverage to expanded indications only, such as reducing the risk of major adverse cardiovascular events in adults with established cardiovascular disease and either obesity or overweight, and for moderate-to-severe obstructive sleep apnea in adults with obesity.

Member cost sharing

• Consider what your members will pay out-of-pocket for access to AOMs.

• Balancing the economics of access for your overall population while ensuring equitable access for your membership is an important consideration in determining cost sharing.

Provider networks

• Work closely with your provider networks to educate and enforce coverage requirements and UM practices for AOMs.

• Consider implementing additional requirements for continued access to medication (i.e. monthly visit with member’s care team to monitor progress, adjust dose, discuss potential side effects).

• Evaluate open provider network vs. limiting prescribing of GLP-1 AOMs to a center of excellence network. Different levels of rebates may be available based on the provider restrictions that the plan sponsor chooses to put in place. Some PBMs and manufacturers have negotiated these “tiered” levels of rebates to allow more flexibility in this area.

Rebates and discounts

• Manufacturers typically provide rebates for preferred formulary placement of their products, particularly for a competitive medication class like AOMs.

• Optimize rebate opportunity for AOMs by aligning contracting with formulary and utilization management strategy.

• Ask for value-based manufacturer contracts and measure your population performance against those contracts to reduce waste and costs.

• Consider driving utilization to specific channels (retail vs mail) or pharmacies where there are preferred contracts in place.

• Request that anti-obesity medications be carved out from other rebate guarantee calculations and provided as a separate pass-thru amount.

• Understand any separate pharmacy discount rates the PBM may have that are specific to GLP-1s and the potential impact to current pharmacy discount rate agreements.

Non-covered utilization: For employers that decide not to provide AOM coverage, establish a process to guide members to alternative access options.

• Manufacturers may offer copay cards or direct-to-consumer programs which can be used to lower out-of-pocket costs.

• It is important to note that incurred costs for non-covered medications will not accrue toward the member’s deductible or OOP maximums under their insurance program.

• Your PBM may also establish cash discount programs with retail pharmacies to enable member access.

• Copay cards and cash discount programs do not apply to non-approved pharmacies.

• Payers should discourage the use of compounded GLP-1 medications as these are not FDA approved and there are significant safety concerns. The FDA indicates that previous shortages of the GLP-1 drugs are now resolved, requiring compounding pharmacies to discontinue making and distributing compounded GLP-1s.

Plan sponsors who implement behavioral modification and patient engagement programs have realized increase compliance and return on investment. Several point solution case studies are pending publication.

All plans should aim to establish key performance indicators (KPIs) to monitor success and/or identify potential shortcomings. However, this can be challenging due to multiple data sources and vendors involved with different benefits.

Payers should consider the following as they develop a KPI-monitoring program:

Catalog weight management benefits

• What do you currently offer to manage obesity and identify the vendor who can/should be able to track outcomes.

Identify data requirements and availability

• Discuss with each vendor to determine what information/data can be provided and measured.

• Identify if there are extra fees or development needed to obtain data.

Determine who will compile and measure

• Evaluate who can compile and provide comprehensive measurements from the different vendors and data sources (PBM, health plan, point solutions vendor, or consultant).

KPIs may be segmented into the following measurement groupings (with examples of what to track). Depending on the outcome being evaluated, it may not be possible to provide measurements in all areas listed below, but these are suggestions to make outcome measurements more robust and facilitate a more comprehensive view of program impact and success.

Members:

Percentage of total body weight loss (both from highest weight and weight at the start of the program)

Medication adherence

• Adherence to treatment is a relatively easy measure to track and has a high correlation with improved outcomes and reduced medication waste.

Attrition and rationale

• Tracking and understanding how many members discontinue AOMs and the rationale may provide opportunities to improve the care model.

Holistic health outcome measures

• Evaluating health outcomes (e.g., blood pressure, blood sugar, cholesterol, etc.) is critical to understand the health benefits associated with weight management.

• Measuring other indicators of physical and mental health (e.g., standardized survey tools such as PROMIS-10) is an important way to track the impact of the program beyond weight and health metrics.

Population:

What percentage of the population is utilizing the medication? Does this align with original expectations?

What percentage of utilizers have weight-related comorbidities?

• Assess population that qualifies for additional indications (e.g., diabetics with obesity, sleep apnea, cardiovascular risk).

Analytics by cohort (e.g. diabetes diagnosis, race, gender, etc.)

• Identifying differences among AOM user cohorts may identify disparities in care and provide areas to focus efforts.

• Long term benefits include reduction in blood sugar and cardiovascular risk among other health outcomes. What changes are observed in the population?

Cost:

Net cost per member (prescription cost and total health care cost)

• Tracking the net cost will assess plan liability to cover AOMs. It is important to include the impact of rebates and other factors offsetting cost.

• PBM and/or vendor contract performance

Return on Investment (ROI):

Longitudinal medical outcomes and associated plan costs

• Implement processes to track medical claims for members utilizing AOMs to study long-term savings as a result of treatment. Obesity treatment is long-term, and it may take years to achieve medical savings.

• Payers can estimate medical cost offsets using the studies below:

Low Cost Offset Scenario

High Cost Offset Scenario High Cost Offset Scenario

Additional Cost Offset Data:

Effects of Semaglutide 2.4 mg on Healthcare Costs in Patients with Obesity and Atherosclerotic Cardiovascular Disease (SHINE-ASCVD)

Non-medical offsets

• Consider other metrics to quantify benefits for members utilizing AOMs as well as the organization (e.g. lower absenteeism, lower presenteeism, etc.)

As KPIs are developed, it might be helpful to stratify measurements into the following:

Baseline metrics – prior to implementation or beginning therapy

Short term metrics – outcomes during the initial year of therapy or program implementation

Long term metrics – outcome beyond the first year of therapy or program implementation

Finally, an implementation team should be established to provide program oversight, ongoing evaluation, and reporting of outcomes to leadership. Ideally, an implementation team should be comprised of all stakeholders including benefits, analytics, finance, clinical, and operations. The implementation team may need to be comprised of both internal and external subject matter experts to ensure all areas of expertise are represented.