Advisor, ZLC Employee Benefits Solutions
In May 2023 I wrote an article about the brand name drug, Ozempic, titled “What’s Up With Ozempic”. That article, and my subsequent podcast, were unbelievably popular and it could be said that they “went viral” in the context of employee benefits. Since then, many things have changed around this groundbreaking drug, so I wanted to provide an update, and I also wanted to suggest a call to action for all the various stakeholders involved.
Let’s start with some updates:
Interest in Ozempic continues – This attention is supported by strong advertising campaigns and ongoing media, and social media, coverage. While the broader class of Semaglutide drugs is expanding (stay tuned for Rybelsus and Mounjaro) and there have been other weight loss drugs (i.e., Saxenda), the reference to “Ozempic” as the preferred weight loss drug seems to be universal right now. Public interest in using prescription drugs to help with weight loss continues to grow, even though these drugs may have been developed primarily for the treatment of Diabetes.
Obesity and related health risks are the issues many are struggling with – Healthcare practitioners and the general public can agree that there is a direct link between obesity and other health risks, including but not limited to Diabetes, heart disease (blood pressure and high cholesterol), stroke, chronic pain, some cancers, and even anxiety and depression. Obesity rates in Canada are high and have continued to increase. According to Statistics Canada, in 2018, 26.8% of Canadians aged 18 and over were classified as obese and another 36.3% as overweight, bringing the total population with increased health risks due to excess weight to 63.1%. The broader risk to society related to obesity is significant and therefore the opportunities related to weight loss drugs are also significant.
The cost is high, but not as high as in the U.S. – Unfortunately, the overwhelming amount of media coverage around Ozempic is often biased to the U.S., which references annual drug costs of approximately $7,000 to $15,000 for this class of drugs. However, the estimated cost in Canada is much less. It’s closer to $2,500 to $3,000 per year. While this is still significant, any comparison to the potential health benefits available is easier to understand and compare to this level of cost.
Supply of Ozempic doesn’t appear to be a problem for Canadians, at least not yet – Much of the Canadian media coverage has been referencing supply chain issues for Ozempic and the broader class of drugs. However, this has been up until recently a more significant issue in the U.S. Canada has managed this more effectively, but there have been some recent challenges with increasing awareness and subsequent demand. As well, as this class of drugs is expected to become available in pill form, these pressures may subside given the less complicated process of manufacturing pill-based drugs versus injectable drugs.
References to a related drug, Wegovy, have been confusing for many Canadians – For clarification, Ozempic was developed to treat Diabetes and not weight loss. However, in treating Diabetes they saw the benefits of weight loss and subsequently developed Wegovy specifically for weight loss. Healthcare professionals have confirmed that these drugs are essentially the same. However, in Canada, Ozempic has been approved for Diabetes but Wegovy has not been approved for distribution, at least not yet.
Many people have been taking Ozempic even though they are not Diabetic – In order to try and take advantage of the weight loss effects, many Canadians who are not diabetics have been taking Ozempic. Some insurers in Canada originally were approving these types of prescriptions, often referred to as “white label use” of the drug. Given the significant increase in the use of Ozempic, most insurers are now developing stricter guidelines around approving Ozempic prescriptions, which might include requiring Diabetics to start with lower cost therapies before being approved for Ozempic. These protocols will likely roll out more broadly this Fall and will likely help reduce the utilization of Ozempic within employee benefits plans and help mitigate supply chain issues.
So some things have changed and the landscape for this class of drugs is likely to get more complicated. At the same time, outcomes have not changed, and the potential benefits of a proven weight loss drug are quite significant. As noted above, in addition to providing an update since my initial Ozempic article, I also wanted to provide a call to action for all the various stakeholders involved, as follows:
Employee benefits plan members – For individuals who are members of an employee benefits plan, particularly those that are obese and/or face health issues requiring weight loss, they should speak up and let their employers know that they would like this category of drugs covered along with other existing weight loss drugs. This could be important when viewed through the very topical lens of “Diversity, Equity and Inclusion”, as covering weight loss drugs should help employees meet their individual personal needs.
Employee benefits plan sponsors – Even if benefits plan sponsors do not hear from their employees around weight loss drugs, they should be evaluating the long-term savings that might be available from a healthier employee population. Intuitively there should be a positive return on investment from weight loss drugs in terms of higher employee productivity and lower utilization of other drugs (i.e., blood pressure, cholesterol, anti-depressants, etc.) and health services (i.e., paramedical services and medical supplies).
Canadian insurers – We need insurers to start treating obesity as a chronic disease and include this category of prescriptions drugs in their standard drug formularies (list of drugs covered). They should also start evaluating their own return on investment from this category of drugs. Intuitively it makes sense but there has been limited research, and, where there is a long-term positive ROI, plan sponsors need to know. Lastly, to alleviate concerns around the proper use of this category of drugs, insurers should be developing clinical criteria, pre-authorization protocols, and step therapy guidelines for their safe and effective use. This work would ideally be done by coordinating with doctors and monitoring plan member progress and health outcomes. We know that similar guidelines and pre-authorization protocols have been effectively used for many other drugs.
Governments – At both the provincial and federal level, governments should be looking at the long-term cost savings related to direct medical treatment costs in the broader health care system. Surely there would be a reduction in utilization of doctor and hospital services if obese Canadians achieved weight loss goals and more positive health outcomes. As well, there would be further benefits related to reductions in the strain on families and the involvement of caregivers. Perhaps weight loss drugs could be used instead of other expensive interventions, such as bariatric surgery. While I am not a medical expert, I am suggesting this as another consideration worth investigating.
Canadians are less healthy than they have ever been with an increasing proportion being overweight, obese, or morbidly obese. This situation is not likely to change any time soon, so there are significant opportunities available with Ozempic (or Wegovy) and the broader category of similar drugs that can help Canadians achieve weight loss. Change needs to happen now, and everyone needs to understand the role that they can play in making positive changes.
We would be pleased to discuss your specific situation with you to identify the best strategy for your employee benefits plans. Should you have any questions on the above, please do not hesitate to contact any member of our team.
ZLC Employee Benefits Solutions is one of the fastest growing advisors for employee benefits and group retirement programs in Vancouver and we are fortunate to have the best people, resources, and clients. We provide value by leveraging one of the most skilled benefits teams – collectively over 400 years of experience within our team of 20 employee benefits specialists. We have been working with businesses ranging from 3 to over 75,000 plan members for over 35 years.