Excessive-cost weight reduction medication enhance vitamin counseling with employers

Packages of weight loss drugs Wegovy, Ozempic and Mounjaro.

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A few years ago, when Virta Health founder and CEO Sami Inkinen approached employers about leveraging the company’s nutrition-oriented digital diabetes program for obesity-related weight loss, most companies weren’t ready to commit. 

Now, more employers are all in on nutritional counseling and coaching as they grapple with rising costs for diabetes and weight loss drugs such as Novo Nordisk’s Ozempic and Wegovy and Eli Lilly’s Mounjaro and Zepbound. 

“Our goal is not to drive the maximum number of GLP-1 prescriptions, but we are the telemedicine company of choice for many employers to responsibly use these drugs, and then also get members off of these drugs and sustain the weight loss nutritionally,” said Inkinen.

The company published a peer-reviewed study a year ago which found that patients on Virta’s nutrition-counseling programs maintained weight loss one year after they stopped using GLP-1s. But Inkinen says less than 10% of the company’s weight loss enrollees are using the popular drugs — most opt for nutrition counseling alone and still lose an average of 13% of their weight over the course of one year.  

“Quite frankly, despite the message that maybe the pharma companies are pushing, nobody really wants to be on these drugs forever, if you get the choice and the tools,” he said.

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

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

More employers require weight loss engagement

Companies surveyed by the Purchaser Business Group on Health said glucagon-like peptide medications, commonly known as GLP-1 drugs, are now a top driver of employer plan drug costs, with 96% of those surveyed expressing concerns about the long-term cost implications.

As a result, more employers are looking to utilization management strategies such as nutrition counseling 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 that it’s clinically appropriate and accompanied by the medical and lifestyle modification supports to ensure long-term safety and efficacy for the individual,” said Randa Deaton, vice president of purchaser engagement with Purchaser Business Group on Health.

Yet, using those programs sometimes result in new headwinds when it comes to pricing for GLP-1s in their pharmacy benefits plans, Deaton notes.

“We’ve seen that PBMs and drug manufacturers have been reducing their rebates when employers are requiring a lifestyle management intervention as part of the drug criteria, so it has been challenging for employers to put in place the right programs to support their workers and family members,” she said.

One of Virta Health’s rivals, Omada Health, is also seeing strong demand for its GLP-1 weight loss management program, after partnering with Cigna’s Evernorth pharmacy benefits division on a program called EncircleRx. Program enrollment went from 2 million covered lives 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 challenges of affordability” of GLP-1 drugs and is looking for a more value-based approach, Cordani told analysts on the company’s Q3 earnings call.

“Clients are observing, and physicians are observing the start-and-stop dynamic that is transpiring for some patients, which also doesn’t generate the desired or intended outcome,” he said.

2025 IPO speculation

For both Virta and Omada, the GLP-1 growth dynamic is fueling speculation that the startups, which are both over a decade old, could go public this year — if market conditions are right.

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

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

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

“If you have a thing that’s working, it is 1,000 times easier to just scale your thing, your team, your culture,” he said.