High-cost weight loss drugs boost nutrition counseling with employers

A few years ago, when Virta Health founder and CEO Sami Inkinen reached out to employers to leverage the company’s nutrition-focused digital diabetes program to lose obesity-related weight, most companies were not ready to commit.

Today, more employers are interested in nutritional counseling and coaching as they grapple with the rising costs of diabetes and weight-loss medications such as Novo Nordisk Ozempic and Wegovy and Eli Lilly’s Mounjaro and Zepbound.

“Our goal is not to increase the maximum number of GLP-1 prescriptions, but we are the telemedicine company of choice for many employers who want to use these drugs responsibly and then incentivize their members to stop using them. take these medications and maintain weight loss nutritionally.” said Inkinen.

The company published a peer-reviewed study a year ago, which found that patients receiving Virta’s nutritional counseling programs maintained their weight loss a year after stopping GLP-1 use. But Inkinen says fewer than 10 percent of the company’s weight-loss sign-ups use the most popular medications — most opt ​​for nutrition counseling alone and still lose an average of 13 percent of their weight. over the course of a year.

“Frankly, despite the message that pharmaceutical companies may be sending, no one really wants to keep taking these drugs forever, if you have the choice and the tools,” he said.

For Virta, demand for such services has driven record revenue growth of 60% in 2024, to more than $100 million, according to Inkinen.

He said the 10-year-old startup was on track to be profitable in the second half of this year.

The companies surveyed by the Buyer Business Group Health said glucagon-like peptide drugs, commonly known as GLP-1 drugs, are now a leading driver of employer plan drug costs, with 96% of respondents expressing concerns about the long-term financial implications .

As a result, more employers are turning to utilization management strategies such as nutrition consulting and coaching services.

“Most employers want their plan members to have access to weight management medication options, such as GLP-1s. However, they also want to ensure they are clinically appropriate and accompanied by medical supports and lifestyle modifications to ensure long-term safety and security. effectiveness for the individual,” said Randa Deaton, vice president of buyer engagement with the Purchaser Business Group on Health.

Yet reliance on these programs sometimes leads to new hurdles when it comes to pricing GLP-1 in their pharmacy plans, Deaton notes.

“We found that PBMs and drug manufacturers reduced their discounts when employers required a lifestyle management intervention as part of the drug criteria. This has made it difficult for employers to put the right programs in place to support their workers and their families. members,” she said.

One of Virta Health’s competitors, Omada Health, is also seeing strong demand for its GLP-1 weight loss management program, after partnering with by Cigna Evernorth’s pharmacy benefits division through a program called EncircleRx. Enrollment in the program increased from 2 million lives covered in the second quarter of 2024 to 8 million in the third quarter, according to Cigna CEO David Cordani.

“The market continues to absorb the affordability challenges” of GLP-1 drugs and is looking for a more value-based approach, Cordani told analysts during the company’s third-quarter earnings conference call.

“Clients observe, and physicians observe the start-stop dynamic that occurs in some patients, which also does not generate the desired or expected result,” he said.

For both Virta and Omada, GLP-1’s growth momentum is fueling speculation that the startups, both more than a decade old, could go public this year – if market conditions are favorable.

Omada Health reportedly filed a confidential registration to make it public with the Securities and Exchange Commission last summer, according to Business Insider. The company declined to comment on the report.

Virta Health was valued at $2 billion following its last funding round in 2021. This is Inkinen’s second startup. He was a co-founder of the online real estate company Trulia, which went public in 2012 and was bought by its rival. Zillow.

As for Virta’s IPO plans, Inkinen says for now he’s focused on growing the company.

“If you have something that works, it’s 1,000 times easier to scale your project, your team, your culture,” he said.