When considering whether to cover Wegovy, an obesity medication, it’s important for plan sponsors to weigh increased short-term costs with long-term savings, while considering alternative treatments that are also available, says Philippe Laplante, a principal at Eckler Ltd.

Plan sponsors that decide to cover Wegovy, which launched in Canada last month, could see a significant cost increase because of the expected high utilization of the drug. “But there’s an argument to be made that, over the long term, the frequency of some chronic diseases could be reduced if your plan members are in better health due to anti-obesity drugs.”

Coverage for this type of drug is typically for specific health conditions and not for cosmetic reasons, he adds, noting this process could involve prior authorization requirements. “You could require body mass index as an identifier, which will help ensure members who take the drug really need it. Another possibility is setting annual maximums or lifetime maximums for members.”

Read: What plan sponsors should know ahead of rollout of new obesity drugs in Canada

Additionally, benefits consultants can help estimate the number of plan members who may need the medication and provide an idea of short-term costs under different plan designs with different maximums. They can then monitor the prevalence of certain chronic illnesses related to obesity and see if there are improvements over the long term.

If plan sponsors have hesitations surrounding Wegovy, Laplante notes there are many obesity treatments available besides medication that plan sponsors can offer, including mental-health supports, exercise and expanding paramedical coverage to include dieticians and nutritionists.

When new medications hit the market, it’s important for benefits providers to examine the impact that the drug can have on individual health outcomes and discuss this with plan sponsors, says Pavithra Ravi, head of pharmacy strategy at Manulife Canada. “At Manulife, our focus is on ensuring [plan members have] access to the right medication at the right time [which is crucial] when considering new, highly anticipated treatments like Wegovy and the impact they can have on people with obesity.”

Read: How plan sponsors, insurers are considering coverage of weight-loss drugs amid rising use of Ozempic

Obesity coverage is a necessary consideration for plan sponsors because it can have a significant impact on employee health and productivity and negatively impact health outcomes, resulting in higher medical costs, notes Ravi.

“When medications like Wegovy become available in the Canadian market, we need to educate our plan sponsors on what the drugs can mean to them and their employees. They also need to understand all the available choices and the importance of a holistic plan design for obesity.”

Since Wegovy has only just become available to Canadians, she says it’s hard to determine the true demand for the medication at this time. However, many of the plan sponsors that Manulife has spoken to are watching this space very closely. “They’re eager to learn more about the long-term efficacy of all the anti-obesity medications on the market and the interest from their employees.”

Read: My Take: Obesity should be treated like other chronic conditions under benefits plans