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GIC report: GLP‑1 weight‑loss drugs a major driver of rising plan costs; PBM switch and procurement changes produced mixed savings
Summary
A retooled GIC out‑of‑pocket report found member out‑of‑pocket costs largely stable while GIC‑paid spending rose across many categories; GLP‑1 weight‑loss drugs accounted for a substantial share of recent drug‑cost increases, while procurement and a PBM change to CVS reduced costs in some generic and specialty categories.
At its May 12 meeting the Group Insurance Commission (GIC) reviewed a reworked out‑of‑pocket report showing relatively stable member out‑of‑pocket costs but rising GIC‑paid spending driven in part by increased utilization and unit prices across multiple medical service categories and a sharp rise in GLP‑1 prescriptions for weight loss.
Lauren Makashima, the GIC's data analytics manager, said the report adds GIC‑paid trends alongside member out‑of‑pocket metrics to clarify the drivers of premiums and affordability. She reported that non‑Medicare members spent about $59.65 per member per month out of pocket in fiscal 2024 and that Medicare members averaged about $51.51 PMPM. At the same time, GIC‑paid medical and drug PMPM increased (medical up about $35 PMPM and prescription drugs up roughly $12 PMPM for FY24), gross of rebates.
Lauren attributed much of the prescription drug increase to GLP‑1 drugs. "As of February, there were about 11,000 non‑Medicare utilizers of weight‑loss indicated GLP‑1s corresponding to a monthly GIC paid amount of $15,000,000 pre rebates," she said, and the GIC has launched a workstream to explore market solutions that reduce spending while maintaining access.
The report also highlighted savings from procurement changes and a PBM transition. Switching some members from WellPoint Basic to Harvard Pilgrim Access America produced about $12,000,000 in GIC‑paid savings for members who switched, exceeding original projections; the PBM transition from Express Scripts to CVS Caremark contributed to lower allowed amounts for many generics (as one example, the allowed amount for levothyroxine fell from about $24 per script under Express Scripts to about $4 under CVS for the GIC population), which reduced member out‑of‑pocket spending for common maintenance drugs.
On formulary changes, Matt noted CVS Caremark will remove Zepbound from the formulary effective July 1, 2025; Wegovy and Saxenda will remain preferred and an exception process will be available for members with clinical need. Commissioners asked about prior authorization criteria for GLP‑1 weight‑loss drugs; Lauren said the criteria differ from diabetes indications and generally require participation in a comprehensive weight‑management program and documentation of diet and activity efforts for at least six months.
The GIC compared its benefit levels to CHIA benchmarks and found GIC plans are slightly more generous than jumbo employer plans in the state, and GIC out‑of‑pocket PMPM is lower than most employer‑sponsored market segments. Lauren concluded the changes to procurement and the PBM delivered material savings in some areas, but rising utilization and unit costs across many medical categories and a marked increase in GLP‑1 utilization drove GIC‑paid spending higher in FY24.
Next steps: the analytics team will continue monitoring GLP‑1 trends and other drivers and provide follow‑up data to the commission as the workstream explores policy options.
