Stanford engineers have developed an injectable hydrogel depot technology that enables GLP-1 drugs to be administered once every four months, compared to repeated daily injections.
Stanford engineers have developed an injectable hydrogel depot technology that enables GLP-1 drugs to be administered once every four months, compared to repeated daily injections.
The newest weight loss medications offer impressive health benefits but come with price tags that make them economically impractical for widespread use, according to a comprehensive new study published in JAMA Health Forum.
Researchers at the University of Chicago found that while injectable medications like tirzepatide (Zepbound) and semaglutide (Wegovy) provide substantially greater health benefits than older weight loss drugs, their current costs would need to drop by 30% to 82% to meet standard thresholds for cost-effectiveness.
The findings come as Americans face continued shortages and insurance battles for these highly sought-after medications, which have transformed obesity treatment since their introduction but remain financially out of reach for many patients.
“This economic evaluation found that although tirzepatide and semaglutide offered substantial long-term health benefits, they were not cost-effective at current net prices,” concluded the researchers, led by Dr. Jennifer Hwang. “Efforts to reduce the net prices of new antiobesity medications are essential to ensure equitable access to highly effective antiobesity medications.”
The study used advanced computer modeling to project lifetime health outcomes and costs for 126 million eligible U.S. adults who could potentially benefit from weight loss medications. Researchers compared four FDA-approved medications combined with lifestyle changes against lifestyle modifications alone.
Over a lifetime, tirzepatide—sold as Zepbound by Eli Lilly—would prevent the most cases of obesity (45,609 per 100,000 people), diabetes (20,854 cases), and cardiovascular disease (10,655 cases). Semaglutide—marketed as Wegovy by Novo Nordisk—came in second, preventing 32,087 obesity cases, 19,211 diabetes cases, and 8,263 cardiovascular disease cases per 100,000 people.
These health gains translated to substantial improvements in both length and quality of life. Tirzepatide would generate an additional 48,649 life-years per 100,000 eligible people compared to lifestyle modification alone, while semaglutide would add 35,634 life-years.
The problem? The price.
Despite producing the greatest health improvements, tirzepatide and semaglutide failed to meet standard cost-effectiveness thresholds used by health economists. To become cost-effective at the commonly accepted threshold of $100,000 per quality-adjusted life-year, tirzepatide’s current estimated net price of $6,236 annually would need to drop to $4,334—a 30.5% reduction. Semaglutide would require an even steeper 81.9% discount from its current $8,412 net price to just $1,522 annually.
In contrast, the analysis found that older, less expensive weight loss medication naltrexone-bupropion (Contrave) was actually cost-saving despite its more modest health benefits, while phentermine-topiramate (Qsymia) proved cost-effective by conventional standards.
The findings highlight the complex economics of the weight loss medication boom, which has been driven by the remarkable effectiveness of GLP-1 receptor agonists like semaglutide and tirzepatide. These medications, which were originally developed for diabetes, have shown unprecedented weight loss results of around 15% to 21% of body weight in clinical trials—roughly double what previous medications could achieve.
The study’s results could influence ongoing debates about insurance coverage for these medications. Currently, Medicare is prohibited from covering medications specifically for weight loss, and Medicaid coverage varies by state. Private insurers frequently limit access through prior authorization requirements and high out-of-pocket costs, with most Americans who take these medications paying substantial sums from their own pockets.
That could change soon. In January, the Centers for Medicare & Medicaid Services proposed allowing Medicare coverage of GLP-1 medications for obesity for the first time—a move that would expand access but also significantly increase government healthcare spending.
The study authors note that future policy solutions are critical to improving affordability and access to these medications. They suggest that the Inflation Reduction Act’s Medicare drug pricing negotiation program could eventually bring down prices, with semaglutide potentially being selected for negotiations as early as 2027.
In the meantime, the authors suggest exploring alternative approaches like using the medications for initial weight loss followed by lower-cost maintenance strategies, including lifestyle modification programs, food-based interventions, or lower-dose maintenance therapy.
The research has important limitations. The model projects short-term clinical trial results over a lifetime and assumes patients maintain both the medication and lifestyle changes indefinitely—scenarios that may not reflect real-world usage. The study also doesn’t account for all obesity-related conditions like sleep apnea and osteoarthritis, which might improve the medications’ cost-effectiveness if included.
For now, the study provides the most comprehensive look yet at the economic value of these revolutionary medications, suggesting that their health benefits are substantial but their current prices remain a significant barrier to widespread use.
As obesity affects more than two-fifths of American adults and drives enormous healthcare costs, finding sustainable ways to deliver these effective treatments to those who need them represents one of healthcare’s most pressing challenges—a challenge that ultimately may require both policy changes and price concessions from drug manufacturers to solve.
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