Delaware’s Office of Budget Management is suggesting that the state stop covering the cost of GLP-1s for weight loss drugs for current and retired employees.
Delaware Office of Budget management executive director Brian Maxwell said since the state began coverage of GLP-1s in 2023, it’s made up an outsized portion of the state’s healthcare costs.
Back in 2023, the State Employee Benefits Committee estimated the cost at nearly $2million. But the actual cost that year was about seven times that– more than $14 million.
And Maxwell told the Joint Finance Committee that projected costs for the drugs this year will be approximately $92 million, before rebates.
“There's agreements that we have with our (pharmacy benefits manager) as to what we can disclose publicly with regards to those rebates,” he said. “But when we're talking about budgeted dollars, there are several different things that we could do, and a number of states have actually taken action as to no longer covering these drugs.”
This cost for GLP-Ones is only associated with weight loss use.He said its use for diabetes treatment is projected to cost the state more than $35 million before rebates this year.
Alternatively, if the state stops coverage of GLP-1 drugs for weight loss in fiscal year 2027, it could save $50.8 million with rebates considered, he said. And by fiscal year 2029 savings would total an estimated $179 million.
During Governor Matt Meyer’s budget proposal, Meyer said his administration wants to make strategic cuts to Delaware’s government operations – about $108 million. Part of that plan is $31 million in premium increases.
Healthcare costs are a main driver of the budget. To cover increases, the governor’s budget proposal suggests a premium increase of 4.2% for the next three years.
OMB deputy director Ann Visalli said if the state opts to stop covering GLP-1s for weight loss, the premium increase isn’t necessary.
“We are continuing to negotiate with our (pharmacy benefit manager) to see what we could do on behalf of the state, not just for weight loss,” she said. “But also, the drug wasa very expensivedrug, so even ifyou'reon it for diabetes,it'sstillvery expensive.So, we continue to keep the pressure on there to see what we can do.But we think this proposal makes sense.It'sa serious cost driver.”
