The high cost of weight-loss drugs forces employers to require nutritional counseling, boosting startups.

Now, more employers are engaging in nutritional counseling and coaching as they deal with diabetes and weight loss medications such as Novo Nordisk Ozempic and Vigovi and of Eli Lilly Monjaro and Zipbound.

“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 use these medications responsibly, and then to provide members with these medications as well. Keep away from and maintain weight loss by dieting,” Inkinen said.

The company published a Peer-reviewed studies A year ago that found that patients in Virta’s nutritional counseling programs maintained weight loss a year after they stopped using GLP-1s. But Ankinen says less than 10% of the company’s weight-loss enrollees are using the popular drug — most opting only for nutritional counseling and still averaging their weight over the course of a year. Reduce by 13%.

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

For Virta, demand for such services will result in a record 60% increase in revenue to more than $100 million in 2024, according to Inkinen.

The 10-year-old startup is on track to become profitable in the second half of this year, he said.

By survey companies Buyers Business Group on Health Glucagon-like peptide drugs, commonly known as GLP-1 drugs, are now the top driver of employer plan drug costs, with 96% of those surveyed reporting long-term cost implications, he said. expressed concerns about

As a result, more employers are looking to utilize management strategies such as nutritional counseling and coaching services.

“Most employers want their plan members to have access to weight management drug options, such as GLP-1s, however, they also want to make sure it’s medically appropriate and has along with medical and lifestyle modification support to ensure long-term safety and efficacy for the individual,” said Rhinda Dayton, vice president of buyer engagement with Purchaser Business Group on Health.

Even so, using these programs sometimes creates new headlines when it comes to pricing GLP-1s in their pharmacy benefit plans, Dayton notes.

“We’ve seen PBMs and drug manufacturers reduce their rebates when employers require lifestyle management interventions as part of the drug standard, so it’s more important for employers to protect their workers and families. It has become difficult to organize the right program for the sponsorship of members,” he 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 sign Evernorth Pharmacy benefits distribution on a program called EncircleRx. According to Cigna CEO David Cordani, enrollment in the program went from 2 million covered lives in the second quarter of 2024 to 8 million in the third quarter.

Kordani told analysts on the company’s Q3 earnings call that the GLP-1 drug “market is absorbing affordability challenges” and is looking for a more value-based approach.

“Clients are observing, and clinicians are observing the start-and-stop dynamics that are shifting for some patients, which may not produce the desired or desired outcome,” he said.

For both Virta and Omada, the GLP-1 growth spurt is fueling speculation that the startups, both of which are more than 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. was, According to Business Insider. The company declined to comment on the report.

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

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

“If you have something that’s working, it’s 1,000 times easier to just measure your thing, your team, your culture.”