New Weight Loss Drugs Expensive For Insurers to Cover, But May Help Address Costs of Obesity

DBRS Morningstar published a commentary discussing the impact of the rapid growth in the usage of GLP-1 drugs on insurers in North America and Europe.

Key highlights include:

-- The global obesity epidemic is a significant factor in rising life and health insurance claims.

-- Insurers must manage the high cost and fast adoption of new weight-loss drugs in the short term.

-- It remains to be seen if these new drugs will have positive long-term health effects at the population level but, as their usage becomes better understood, insurers are likely to benefit from the addition of GLP-1 drugs to their healthcare benefit offering.

“Obesity can be costly to the insurance industry, and ultimately to its customers, through various insurance benefits including for death, disability, healthcare, or drugs coverage,” said Patrick Douville, Vice President, North American Insurance Credit Ratings. “Managing the cost and access to GLP-1 drugs will be an ongoing challenge for insurers. Still, as the pricing and proper medical use of the drugs gets integrated into benefit plans, it should provide an overall enhancement to the healthcare coverage solutions provided by insurers and be supportive of their business model.”