Background

 The pipeline for glucagon-like peptide-1 (GLP-1) receptor agonists (RA) (including duals, such as glucose-dependent insulinotropic polypeptide [GIP)]GLP-1 RAs) for the treatment of obesity has expanded significantly in recent years. Currently, three are approved and available on the US market for the treatment of obesity, with over 40 additional products in the pipeline.

The introduction of these therapies is expected to drive substantial market growth, with projections estimating a total annual market value of $150 billion by 2030. The growing prevalence of obesity, technological advancements, and increasing public awareness are among the significant factors influencing increased investments in anti-obesity drug research and pipeline development.

Despite the increasing availability of anti-obesity medications (AOMs), patient access remains inconsistent across payer types and market segments. Until recently, some patients sought access to these therapies through compounded formulations, reflecting gaps in coverage and affordability. Federal policy efforts aimed at improving patient access have been introduced but have largely failed to achieve significant reform to date.

Coverage Landscape

Differences in coverage policies across markets and payers has created a landscape in which patient access to AOMs varies significantly. While these drugs may be “fairly priced from a long-term value perspective at their current estimated net price,” according to the Institute for Clinical and Economic Review, the rapid uptake by patients with obesity coincides with significant affordability and coverage challenges, contributing to substantial variations between and within commercial, Medicaid, and Medicare payer types.

Commercial: Coverage by commercial payers varies primarily based on the payer and employer size, employer profile (e.g., large employers in top industries or unions vs. industries with historically high turnover rates), employers’ approach to tailoring their benefit coverage to meet financial goals, and contracting arrangements between payers and manufacturers. According to the Pharmaceutical Strategies Group, only one-third of plans and employers cover GLP-1 RAs for the treatment of obesity, with larger employers more likely to make favorable coverage decisions. Additionally, the emerging pipeline will drive increased competition within the class. It may necessitate higher rebates from manufacturers to maintain preferred access, as evidenced by recent shifts in certain pharmacy benefit manager coverage of AOMs.

Medicaid: Medicaid is required to cover virtually all covered outpatient drugs consistent with the Medicaid Drug Rebate Program (MDRP). However, the MDRP provides exemptions for AOMs. This creates an environment in Medicaid that more closely mirrors the commercial market compared to other drug classes that require coverage under the MDRP. According to Avalere Health State Policy 360 research, as of July 2025, only 14 state Medicaid programs covered GLP-1s for the treatment of obesity. While coverage of AOMs is required for Early and Periodic Screening, Diagnostic, and Treatment beneficiaries, most medications are not indicated for children. As states implement strategies to reduce drug spending, coverage of AOMs may continue to be limited. Alternatively, states could seek deeper rebates for coverage in exchange for preferred placement on preferred drug lists.

Medicare: Medicare is statutorily prohibited from covering weight loss drugs, including GLP-1 RAs prescribed solely for the treatment of obesity. The Biden administration aimed to expand access to AOMs for Medicare beneficiaries through the 2026 proposed rule for Medicare Part D prescription plans. The proposed rule aimed to “reinterpret the statute to permit coverage of AOMs for the treatment of obesity when such drugs are indicated to reduce excess body weight and maintain weight reduction long-term for individuals with obesity.”

In April 2025, the Trump administration issued a final rule that did not include the proposed revisions related to the reinterpretation of the statutory language. As a result, GLP-1 RAs continue to be covered by Medicare only if prescribed for diabetes, cardiovascular diseases, and a few other approved indications. While several proposed legislation have aimed to expand coverage under Medicare, including the Treat and Reduce Obesity Act, none have been implemented to date.

Key Considerations

The current coverage landscape for GLP-1 RAs for the treatment of obesity has a significant impact on various stakeholders, including manufacturers, health plans, employers, and states, with direct impacts on the patients who are the ultimate beneficiaries of these drugs. While some actions may be undertaken by individual stakeholders independently, others will require collaboration between different parties. Additionally, a combination of actions by various market segments may be the most realistic option for developing strategies and policies to address current access challenges (Figure 1).

Figure 1. Potential Strategies Across Stakeholders

With expertise at the intersection of market access and policy within highly competitive therapeutic areas, Avalere Health is equipped to help manufacturers differentiate their products, strengthen their value story, develop robust payer strategies, and ensure strong market positioning.  To learn more about how we can help with the strategic planning for your brand, connect with us.

This insight is the third of a series exploring GLP-1 manufacturing, evidence, product pipeline, and coverage. Look out for our next Insight about GLP-1 RA trends in the ex-US markets, coming in August.