The Diabetes Dilemma: Balancing Effective Treatment with Cost Efficiency in Healthcare

Jun 5, 2024

Diabetes remains a leading chronic condition impacting over 38 million people in the United States — over 11% of the population.1 Due to a myriad of lifestyle, environmental, and genetic factors, the prevalence rate is expected to continue its upward spiral, with more than one million new cases per year through 2030. As the healthcare spotlight continues to shine on diabetes management, self-insured employers will grow increasingly responsible for bearing the financial burden of this complex, chronic, and costly condition.

A Widespread and Growing Concern for Self-insured Employers

While the current prevalence rate is substantial, we can expect numbers to skyrocket in coming years, as one in three Americans are prediabetic and likely to develop type 2 diabetes, in conjunction with other life-threatening diseases such as heart disease and stroke.2 Only 1.7 million out of the 38 million diabetics have type 1, signaling the primary role of obesity in the onset of diabetes.1 Looking at current statistics for obesity, we can predict a corresponding increase in the number of diabetes cases if obesity is left untreated:

  • Nearly 42% of adults and 20% of children and adolescents are obese.3,4
  • From 1999-2000 to 2017-2020, the adult obesity rate increased by 37%.5
  • From 1999-2000 to 2017-2020, youth obesity increased by 42%.5

With the growing number of individuals who need medical management for diabetes, new treatments have quickly emerged to manage blood sugar more effectively and help patients achieve an improved state of health — with the added benefit of significant weight loss.

Emerging Treatments for a Complex Condition

Insulin is the long-standing treatment for an estimated 27% of diabetics, most of whom have type 1.6 However, type 2 diabetics often need additional or alternative treatment. The standard medication therapy typically starts with Metformin, along with diet and exercise modifications. If Metformin alone at optimal dosing is ineffective, Sulfonylureas (Glipizide) or Thiazolidinedione (Pioglitazone) may be added to the treatment protocol. The goal is to reduce Hemoglobin A1c (HbA1c) levels, a standardized metric for blood sugar levels, to below the diabetic range (6.4% and above).

If these initial therapies are in place for at least three months and fail to lower HbA1c below 6.4%, patients can begin taking glucagon-like peptide-1 receptor (GLP-1) agonists, such as Ozempic, Wegovy, or Mounjaro. GLP-1s are used to treat both type 2 diabetes and obesity by slowing the movement of food from the stomach to the small intestine, which reduces appetite and feelings of hunger. GLP-1s can be used with the maximum dose of Metformin when a patient is obese with type 2 diabetes. However, despite its proven efficacy in treating diabetes and obesity, not all GLP-1s are as effective as others and can cause serious side effects, including gastric stasis, pancreatitis, and, in rare cases, thyroid cancer.7

The Role of Financial Incentives in GLP-1 Treatment Trends

Despite the potentially dangerous side effects, GLP-1s have exploded in utilization in recent years, beginning with off-label use for weight loss and now through the FDA-approved Wegovy dosage designed for treating obesity. However, because generic versions of GLP-1s have yet to be approved, manufacturers and pharmacy benefit managers (PBMs) are taking full advantage of the opportunity to boost their margins for these popular brand-name medications.

GLP-1 manufacturers typically offer “Class of Trade” financial incentives, instead of rebates, to PBMs to ensure placement on the PBM’s formulary and to incent the dispensing of GLP-1s from the PBM’s mail-order pharmacy. These class of trade incentives have resulted in minimal clinical oversight required by the PBMs to approve the use of GLP-1s. In most cases, PBMs will give their stamp of approval if there is evidence of past or current treatment with Metformin — without investigating whether HbA1c levels indicate the existence of type 2 diabetes.

PBMs have struck gold with GLP-1s, as the combination of class of trade financial incentives with the highly sought-after weight loss effects has exponentially increased utilization and sales, with projections of over $71 billion by 2032, according to J.P. Morgan.8 However, by placing profit over outcomes, PBMs are to blame for the continual escalation of GLP-1 utilization and prices — without close consideration of if/how these medications will truly impact clinical outcomes.

Containing Costs With Fiduciary Utilization Management

Working in direct opposition to traditional PBMs, a fiduciary utilization management partner operates only in the best interests of the plan sponsor and its enrollees. By focusing on medical necessity and clinical rigor, a fiduciary clinical services program like US-Rx Care’s Right Rx service can generate substantial cost savings without compromising patient outcomes. Compared to the current “open floodgate” PBM model, proper GLP-1 utilization management should lead to a 50% cost reduction that enhances the value and integrity of self-insured pharmacy benefit plans.

Learn more about how US-Rx Care can help your self-insured plan optimize GLP-1 utilization management by eliminating financial incentives.


  1. National Diabetes Statistics Report: Estimates of Diabetes and Its Burden in the United States. (2023, November 29). CDC.
  2. Prediabetes. (2022, December 30). CDC.
  3. Adult Obesity Facts. (2022, May 17). CDC.
  4. Childhood Obesity Facts. (2022, May 17). CDC.
  5. The State of Obesity: Better Policies for a Healthier America. (September 2022). Trust for America’s Health.
  6. Weinger, K., & Beverly, E. A. (2010). Barriers to achieving glycemic targets: who omits insulin and why?. Diabetes care, 33(2), 450–452.
  7. Lisco, G., De Tullio, A., Disoteo, O., Piazzolla, G., Guastamacchia, E., Sabbà, C., De Geronimo, V., Papini, E., & Triggiani, V. (2023). Glucagon-like peptide 1 receptor agonists and thyroid cancer: is it the time to be concerned?. Endocrine connections, 12(11), e230257.
  8. Dunleavy, K. (2023, September 11). Novo, Lilly set to dominate $71B GLP-1 drug market by 2032: J.P. Morgan. Fierce Pharma.