Why Cigna is capping cost increases for pricey GLP-1 weight loss drugs

Cigna is moving to limit how much health insurance providers and employers have to pay for pricey and in-demand obesity medications.

The insurer plans to cap annual price increases for the drugs, called GLP-1 receptor agonists, at 15% for employers and plans participating in a weight loss management program offered by its pharmacy benefit manager.

It’s the first financial guarantee available in the market for the drugs, according to the payer. Cigna’s health services division Evernorth, which includes PBM Express Scripts, announced the news on Thursday before the insurer’s investor day in New York City.

The cap could insulate employers from surging costs for GLP-1s while increasing patients’ access to the popular therapies, experts say. GLP-1s have been out of reach for all but a select few, given their high price tags and ongoing shortages of the medication.

The cap is possible through agreements that Express Scripts made with drugmakers Novo Nordisk and Eli Lilly. Cigna is not sharing specifics of the contracts.

As a result, employers and plans participating in Evernorth’s weight management program EncircleRx won’t see more than a 15% annual increase in spending on Novo’s Wegovy and Lilly’s Zepbound, according to Cigna.

In comparison, health plans are seeing the annual cost trend for weight loss drugs hit 40% to 50%, a spokesperson for the insurer said.

“It’s a completely unsustainable number and our clients continue to look to us for help,” Adam Kautzner, president of care management at Evernorth and of Express Scripts, said during the Thursday investor day.

The cap has potential to expand employer coverage of GLP-1s, experts say.

However, a 15% annual price increase being presented as a major step forward on affordability shows both the incredible demand for GLP-1s and the country’s out-of-control spending on drugs, said Arielle Trzcinski, a principal analyst at Forrester.

“It’s a step forward. Is it enough? Maybe not, but in comparison to that 40% to 50% it feels like a much more palatable number,” Trzcinski said.

Cigna’s move illustrates how large insurers are looking for new strategies to prove the value of their pharmacy benefit offerings as they face federal scrutiny into their business practices and competition from drug pricing disruptors.

It’s also a snapshot of the evolving market for GLP-1s, as health services and pharmacy companies look to capitalize on not only providing access to the drugs, but creating services around them.

Increasing GLP-1 coverage

GLP-1s have long been approved to manage diabetes, but the medications — which control blood sugar levels and reduce hunger and food intake — have real potential to move the needle on obesity and the downstream health conditions caused by excess weight, according to physicians and researchers.

Yet payers have been leery about covering the drugs due to their cost. Wegovy and Zepbound — two of three GLP-1 medications currently approved for weight loss in the U.S. — have monthly list prices of $1,349 and $1,060, respectively.

And, the medication needs to be used in perpetuity to be effective. That sustained drain on resources could bankrupt some companies, according to experts.

As a result, only 25% of employers cover GLP-1s for weight management today, according to a recent survey by care delivery company Accolade. More than a third of employers cited cost as a barrier.

Moreover, the drugs remain in limited availability, according to the FDA. The shortages, paired with low coverage rates, are creating a bottleneck for the drugs despite sky-high demand.

More than 40% of Americans are obese, according to government data, creating a total addressable market for GLP-1s of almost 140 million individuals in the U.S.


“Once the supply chain is figured out, it’s going to be amazing how many people will be on these drugs.”

Jennifer O’Brien

Partner, West Monroe


Cigna’s new program is meant to make future GLP-1 cost trend increases predictable for employers, to give them more financial certainty in covering the medication, Kautzner told investors Thursday.

Evernorth is guaranteeing a maximum 15% annual increase in spend. But a company’s specific guarantee differs based on “client type, depending on current benefit offerings and size of patient population, among other factors including specific client preferences and financial strategy,” a Cigna spokesperson told Healthcare Dive.