Growing GLP‑1 drug costs squeeze Minnesota employers and health plans
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Allie Carl/Axios
Surging demand for Ozempic and other GLP-1 drugs is adding up for some Minnesota employers.
Why it matters: The popular medications are changing lives and health outcomes for the better.
- But the high price tag is also driving up health care costs for employers and their workers, prompting some workplaces to scale back coverage.
Driving the news: The Metropolitan Airports Commission recently decided to end coverage of Ozempic and other GLP-1 drugs for weight loss for its roughly 800 employees next year.
- Spokesperson Jeff Lea said "skyrocketing demand for these very high-cost drugs and the impact of those high costs on the premiums for all employees" prompted the change.
By the numbers: About 2,400 people — including airport employees, family members and retirees — are covered by MAC's health plan.
- Lea didn't share MAC's total price tag of GLP-1s used for weight loss, but said such prescriptions cost about $6,000 a year per person.
- MAC will continue to cover the medications when they're prescribed for diabetes, he noted.
The big picture: It's not just the airport feeling the strain. Close to 80% of employers that responded to one recent Business Group on Health survey reported an increase in employees using the medications.
- A separate study, backed by the Blue Cross Blue Shield Association, projected that the spike in demand will drive up premiums at employer-sponsored plans by as much as 14%.
Zoom in: Minnesota's state employee health plan spending on the drugs for weight management jumped from $13 million in 2023, when about 1,600 state workers or dependents filled a prescription for the medication, to $43 million last year.
- Between January and July of this year, close to 7,000 people covered by the plan filled a GLP-1 prescription, costing the state $45 million before rebates.
For context: The 2025 stat represents about 9% of the health plan's overall spending.
- In 2022, when the state spent $3 million on the drugs, the share was just 1%.
An MMB spokesperson told Axios that the state plan's experience with GLP-1 medications for weight loss is "similar to other large employers, and said the "cost of the medications is a concern."
Between the lines: Many employers are putting new requirements in place for workers seeking the medication to curb costs, the Business Group on Health survey found.
- Minnesota already requires that employees meet certain BMI thresholds or health conditions and spend at least six months actively participating in a weight management program before coverage kicks in.
Friction point: Similar trends have prompted state officials in Connecticut, New Hampshire and North Carolina to roll back coverage or add new eligibility requirements for state employees.
The other side: Supporters of covering the drugs more broadly counter that long-term savings and quality of life benefits are worth the spend.
What we're watching: Drugmakers recently agreed to cut prices under pressure from the public and policymakers.
- Costs for seniors and low-income Americans should drop under a deal the Trump administration struck to expand coverage for Medicare enrollees.
What's next: The White House says GLP-1s will be available for purchase without insurance on the forthcoming TrumpRx website next year, starting at an average price of $350 per month.