The news: Digital health startup Virta Health is guaranteeing that its employer and health plan customers won’t increase spending on GLP-1 drugs for their members. If they do, Virta will cover the costs.

What it means: Virta’s virtual weight loss program includes prescriptions for weight loss drugs when applicable. But the company is betting on its non-medication services (e.g., personalized nutrition and lifestyle support) being effective enough to either wean patients off GLP-1s or replace the drugs altogether. For context, Virta says it won’t influence providers’ prescribing decisions.

Zooming out: Virta has been experimenting with different offerings that will help customers rein in their spending on prescription weight loss drugs. Employers and insurers recognize that GLP-1s are effective in driving weight loss and preventing costly cardiovascular issues, but their concern is that the patient might have switched jobs or health plans by the time these benefits are realized. They also don’t want to cover the drugs for an indefinite period due to their high costs.

Many employers and insurers are still grappling with whether or not to cover the drugs when used for weight loss or to provide restricted coverage.

• Pharmacy benefit costs for employers went up 7.7% in 2024, following a jump of 8.4% in 2023, per a study late last year from Mercer. Increased prescription volume of GLP-1s was a key driver.
• Upwards of 85% of commercial health plans either provide no coverage or restricted coverage for GLP-1s, depending on the specific drug, per an updated tracker from GoodRx.
• Most of those plans fall in the limited coverage category, which means the insurer requires prior authorization or makes the patient try a less expensive medication first.

The final word: Virta could be responding to competitor Omada Health debuting as a publicly traded company Friday. Omada’s pitch to employers and health plans is that it will support GLP-1 patients with complementary services to improve members’ health, including tools to manage side effects, as well as nutrition and activity coaching.

The company is placing a risky bet on itself at a time when GLP-1 prescriptions are soaring. Virta’s financial guarantee will likely catch the attention of employers and insurers, but it could quickly backfire from a financial perspective if it’s unable to curb GLP-1 prescription volume.

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