Many large U.S. employers are preparing to reduce health benefits in 2026 as spending on weight-loss drugs grows rapidly. A recent survey shows 51% of companies with 500 or more workers plan to raise cost-sharing, including higher deductibles and out-of-pocket maximums. This is up from 45% who said the same for 2025.
Rising concern centers on the price of GLP-1 weight-loss drugs like Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound. About 77% of employers named these medicines as a key cost issue, reflecting the growing financial strain on company health plans.
A pharmacy expert, Alysha Fluno from Mercer, explained that many employers are unsure how long they can keep covering these expensive medications. While some initially hoped that covering these drugs would save money long term by improving worker health, rising prices are forcing a change in approach.
“Employers facing large cost hikes in 2026 may find this coverage too expensive to maintain,” Fluno said. She also noted that increased competition in the weight-loss drug market may give pharmacy benefit managers (PBMs) more leverage to negotiate better prices in the future, potentially lowering costs.
Wegovy and Zepbound are priced at over $1,000 per month. However, many patients pay less depending on their health plans. Last year, prescription drug costs rose by 8%, and overall health benefits costs are expected to increase by 5.8% in 2025.
Employers are also reconsidering their relationships with pharmacy benefit managers. These firms, such as CVS Caremark, Cigna’s Express Scripts, and UnitedHealthcare’s Optum Rx, act as middlemen. They negotiate discounts with drugmakers, decide which drugs insurance covers, and reimburse pharmacies.
Critics say these PBMs keep some of the discounts for themselves instead of passing savings to patients and employers. This has led to calls for more transparency and regulatory scrutiny. As a result, 34% of employers are thinking about switching to newer or different PBMs.
The survey also found that 40% of employers are exploring alternative drug pricing models. One option is pricing drugs based on the wholesale price paid by retail pharmacies, which might reduce costs.
Regulators have accused the biggest PBMs of pushing patients toward costly drugs and inflating prices to boost their profits. PBMs deny these claims but face growing pressure to prove their value.
In a recent move reflecting these concerns, California’s large public pension fund, CalPERS, announced it will replace UnitedHealth’s Optum Rx with CVS Caremark as its PBM in 2026. The five-year contract with Caremark includes new rules to increase transparency and oversight.
As drug costs climb, especially for weight-loss medications, many employers are reevaluating their health benefit strategies. They face the challenge of balancing employee access to new treatments with managing rising expenses.
