
Costly weight loss medications encourage nutritional advice from employers

Packages of weight loss drugs Wegovy, Ozempic and Mounjaro.
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When Virta Health founder and CEO Sami Inkinen approached employers a few years ago about using the company's nutrition-focused digital diabetes program for obesity-related weight loss, most companies weren't willing to take it.
More and more employers are now turning to nutritional advice and coaching as they struggle with rising costs for diabetes and weight loss medications Novo Nordisks Ozempic and Wegovy and Eli Lilly's Mounjaro and Zepbound.
“Our goal is not to drive maximum GLP-1 prescriptions, but we are the telemedicine company of choice for many employers to use these medications responsibly and then also keep members off these medications and maintain weight loss nutritionally.” Inkinen said.
The company published a peer-reviewed study a year ago that found patients who participated in Virta's nutritional counseling programs continued to lose weight a year after stopping GLP-1. But Inkinen says fewer than 10% of the company's weight-loss participants take the popular medications – most opt for nutritional counseling alone and still lose an average of 13% of their weight over the course of a year.
“Frankly, despite the message that the drug companies may be putting out, no one really wants to take these drugs forever if you have the choice and the tools,” he said.
For Virta, demand for such services led to record revenue growth of 60% in 2024 to over $100 million, according to Inkinen.
He said the 10-year-old startup is on track to be profitable in the second half of this year.
More and more employers are demanding commitment to weight loss
Companies surveyed by the Purchaser Business Group on Health said glucagon-like peptide drugs, commonly known as GLP-1 drugs, are now one of the main drivers of employer plan drug costs, with 96% of respondents expressing concerns about the long-term cost impact.
For this reason, more and more employers are turning to utilization management strategies such as nutritional advice and coaching.
“Most employers want their plan members to have access to weight control medications, such as: B. GLP-1. “But you also want to ensure that these are clinically appropriate and accompanied by medical tools and lifestyle modification support to ensure long-term safety and effectiveness for the individual,” said Randa Deaton, vice president of buyer engagement at Purchaser Business Group on Health .
Still, the use of these programs sometimes creates new headwinds when it comes to pricing GLP-1 in their pharmacy benefit plans, Deaton notes.
“We have seen PBMs and drug manufacturers reduce their rebates when employers required a lifestyle management intervention as part of the drug criteria. “It has therefore been challenging for employers to put the right programs in place to support their employees and families,” she said.
One of Virta Health's competitors, Omada Health, is also seeing strong demand for its GLP-1 weight loss program after partnering with Virta Health Cignas Evernorth Pharmacy benefits from a program called EncircleRx. Program enrollment increased from 2 million covered lives in the second quarter of 2024 to 8 million in the third quarter, according to Cigna CEO David Cordani.
“The market continues to address the affordability challenges” of GLP-1 drugs and seek a more value-driven approach, Cordani told analysts on the company's third-quarter earnings call.
“Clients are watching, and physicians are watching, the start-and-stop dynamic that plays out in some patients and also doesn’t produce the desired or intended outcome,” he said.
Speculation about the IPO in 2025
For both Virta and Omada, the GLP-1 growth momentum is fueling speculation that the startups, both over a decade old, could go public this year – if market conditions are right.
According to Business Insider, Omada Health filed a confidential IPO registration with the Securities and Exchange Commission last summer. The company declined to comment on the report.
Virta Health was valued at $2 billion following its latest funding round in 2021. It is Inkinen's second startup. He was a co-founder of online real estate company Trulia, which went public in 2012 and was later acquired by a competitor Zillow.
As for Virta's IPO plans, Inkinen says he's focused on growing the company for now.
“When you have something that works, it’s a thousand times easier to just scale your thing, your team, your culture,” he said.