Local government might not be getting leaner, but thanks to coverage for injectables, public employees are

Fat-busting drugs like Ozempic might be great for battling the bulge, but their high price tag is busting the budgets of public officials trying to trim taxpayer-funded health insurance costs.

Last year saw a dramatic rise in employees prescribed these drugs, officials said, driving up costs for Erie County's largest public health insurance consortium by an estimated $7.8 million. That figure grows by millions more when Buffalo city government and public school employees are included.

Public employees using GLP-1 drugs

The increase was so large that the board of the county's Labor-Management Healthcare Fund revised its policies to raise the eligibility threshold for coverage starting this year, said Brian Bray, Erie County's personnel commissioner. Prior authorization is now required, and that authorization is contingent on meeting a host of other conditions, including requiring employees to participate in a formal weight loss program for six months before asking insurance to cover their prescription.

"I think there is a lot of frustration of people who were on these drugs and are now ineligible," he said. "So we've definitely heard some frustrated employees, but I think the measures we took are in line with what most health benefits (providers) are doing right now to mitigate the cost of these drugs."

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Over the past two years, injectable weight-loss drugs have grown into one of the most popular - and most costly - new prescriptions for local government employees.

Other independent public employers have not made changes to their drug coverage policies but have also begun expressing concern over the same high-cost realities of these fat-fighting pharmaceuticals.

This newer class of injectable diabetes and weight-loss wonder drugs - such as Ozempic, Mounjaro, Zepbound and Wegovy - have grown into one of the most popular and most costly prescriptions for local government employees struggling with weight gain and obesity.

GLP-1 - "glucagon-like peptide-1" - drug therapy slows digestion and reduces the levels of glucose sugars, decreasing appetite by keeping individuals feeling full longer.

While effective, at a cost of roughly $12,000 a year per person, the explosive interest in the drugs among public employees has done nothing to promote a leaner government.

Heavy government burden

During the City of Buffalo's last fiscal year, which ended June 30, the city recorded almost $2.5 million spent just to cover Ozempic and Wegovy (the weight loss version of diabetes drug Ozempic), according to personnel data provided to Common Council Member Mitchell Nowakowski, who chairs the Council's Finance Committee. He also relayed Comptroller's Office information that shows the city went $3.4 million over budget for health care during that period.

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Fillmore District Council Member Mitchell Nowakowski said he was shocked when he first learned how much the city is spending on prescriptions for weight-loss drugs.

Meanwhile, the Buffalo Public Schools administration has similarly spent $3.5 million on all GLP-1 drugs last year for 628 employees, though that figure does not distinguish between individuals taking the drugs for weight loss versus diabetes or other conditions.

He stressed that he wants employees to be able to use their health plans how they see fit and doesn't want employees to feel shamed for taking the drugs.

"But ultimately, you know, if these drugs are causing overages, I just want to see that it is accounted for, that we're properly budgeting for these drugs," he said.

Like the city and school district, Erie County government is self-insured.

Bray sits on the Labor-Management Healthcare Fund board, a consortium that provides health insurance coverage to public employees who work in more than a dozen self-insured government and related agencies. That includes Erie County government, Erie County Medical Center, SUNY Erie Community College, the Erie County Water Authority and the towns of Clarence, Orchard Park, Tonawanda and West Seneca. The fund also covers the East Aurora and Pioneer school districts and Western Regional Off-Track Betting.

In 2023, a total of 225 employees covered by the self-insured fund were prescribed GLP-1 drugs for weight loss, Bray said. That number grew nearly 190% in 2024, with 650 employees prescribed such medications. Erie County government employees accounted for about 41% of that total, he said, based on information provided to him by the fund.

While out-of-pocket monthly costs to individual county employees on the "core" health insurance plan are only $20 a month, he said, the cumulative cost to the Erie County government last year was about $3.4 million.

Weighing new restrictions

The Labor-Management Healthcare Fund board, which has an even number of labor and management representatives, wrestled with the drug eligibility as usage numbers grew over the first half of last year, Bray said. Members ultimately decided that healthier people who barely meet the obesity standard and are taking these types of drugs primarily to improve their appearance shouldn't be treated the same as someone struggling with extreme obesity and other serious health complications, he said.

"We wanted to have this drug available to people who have a clear health need, while not having to absorb the cost of people who would want this for a non-health-related reason," he said.

The local consortium's decision-making follows a broader trend by major prescription benefits management companies who have been forced to clamp down on runaway costs associated with these newer drugs, Bray said. The fact that users often regain weight after coming off these medications represents further bad news for employers.

"The challenge is not only the volume of initial prescriptions, but also the likelihood that members will remain on these costly drugs indefinitely," Bray said.

The new coverage eligibility rules adopted by the Healthcare Fund take cues from other commercial health insurance providers in the region, like Highmark and Univera, Bray said, though the county's insurance plan is still considered more generous than most.

For employees covered by the Labor-Management Healthcare Fund, preauthorization for receiving any weight loss drug coverage, which includes both GLP-1 and other types of weight loss drugs, requires the following:

* Participation in a formal weight loss program for six months prior to drug therapy.

* A body mass index (BMI) of 40 or greater (severe obesity diagnosis) or a BMI of 35 or greater with a qualifying other health condition, such as high blood pressure, high cholesterol, osteoarthritis or sleep apnea.

As an example, a person who is 5-feet-9-inches tall and weighs 236 pounds would have an estimated BMI of 35, according to a standard body mass index table. If that same person weighed 270 pounds, she or he would be considered "extremely obese," with a BMI of 40.

If pre-authorization is given, employees must first take the oral weight-loss drug Contrave and meet with no success before being allowed to take the GLP-1 class drug Zepbound, which is cheaper than Wegovy. Employees unsuccessful with Zepbound may then be prescribed Wegovy.

The Healthcare Fund also requires that employees provide documentation every six months showing adherence to "your diet and exercise plan in addition to maintaining at least 7.5% reduction of your original weight."

The rules changes for this year have already led to a reduction in patient coverage for the first quarter of this year, from 555 employees to 471, Bray said. That figure is still higher, however, than the first two quarters of last year.

"It's still a serious health issue locally, obesity and its related diseases, so I don't think it's a surprise that more people are using it," Bray said, "but we've definitely changed the usage curve on it."

He added that he is hopeful the current eligibility restrictions won't last forever.

"This is largely a societal issue," Bray said. "Hopefully, these drugs will become less expensive in the future, and we can increase availability."

Staff reporter Benjamin Tsujimoto contributed to this article.

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