OOP Costs, Prior Authorizations for GLP-1s Expected to Increase Dramatically by 2025

Alongside out-of-pocket (OOP) costs reaching significantly increased heights by 2025, prior authorizations for glucagon-like peptide-1 (GLP-1) medications became widespread between 2020 and 2025. With the Inflation Reduction Act (IRA) and efforts to curb off-label use arising as factors for these increases, researchers believe addressing access and affordability of these drugs will remain a challenge.

“Because the IRA introduced an OOP maximum ($2000 in 2025), partly financed by increasing Part D plans’ liability from 15% to 60% of spending in the catastrophic coverage phase, plans may be incentivized to restrict coverage and increase cost sharing for expensive drugs, including GLP-1s,” wrote the authors of a study published in JAMA.¹ “Although prior research investigated GLP-1 coverage and costs, an updated analysis is warranted given the IRA’s implementation.”

In 2022, the Biden Administration signed the IRA into law and health care experts, drug supply chain stakeholders, and many more players in the prescription drug market have been forced to facilitate these industry-impacting federal provisions.² Some of those provisions included capping monthly insulin costs for Medicare Part D beneficiaries and negotiating drug prices with the manufacturers of some of the market’s most expensive prescription medications.³

Researchers explored access, cost, and coverage of GLP-1 medications for patients with diabetes throughout the past 5 years. | image credit: Starmarpro / stock.adobe.com

READ MORE: The Patient, Provider Challenges Associated With Managing GLP-1 Prescriptions

However, in the context of the current study, the most important provision was how the IRA would cap overall OOP spending for Part D enrollees and create further benefit design changes for these beneficiaries. Because of the significant shifts in coverage that the IRA enforced, plan sponsors have updated cost-sharing provisions and criteria needed for coverage.

As researchers continue to release literature on the IRA’s evolution and its impact on beneficiaries, the authors of the current study wanted to focus in on the booming GLP-1 drug class, which has seen growth in expenditures by well over 500% since 2018.⁴ “Using 2020 to 2025 Part D formulary files, we determined plans’ coverage of GLP-1s, use of prior authorization and coinsurance, and average OOP costs,” they continued.¹

In the researchers’ exploration of the IRA’s impact on GLP-1 access throughout the past 5 years, they investigated data from standalone Part D plans as well as Medicare Advantage Part D plans from 2020 to 2025. For the outcomes of prior authorization, coinsurance, and average OOP costs, researchers included prescription data for GLP-1s that were approved for diabetes, as well as semaglutide for cardiovascular disease and tirzepatide for obstructive sleep apnea.

“Monthly OOP costs were calculated for the pre-initial coverage limit phase,” wrote the authors of the study.¹ “Costs reflected an average of co-payments and coinsurance, calculated by multiplying average unit costs at in-area retail pharmacies, number of units for a 1-month supply, and coinsurance percentage.”

Throughout the 5-year study period, researchers provided insights into the evolution of Medicare beneficiaries and plans. Their analysis uncovered 39.6 million beneficiaries enrolled in 4528 plans in 2020 and 45.7 million enrolled in 5146 plans in 2025, accounting for a significant increase over the past 5 years.

Regarding the researchers’ findings, coverage rates for GLP-1s were generally high, exceeding 85% by 2025 for all GLP-1s included in the analysis. The only decline they uncovered was for brand name liraglutide, where coverage dropped by almost 90% following the approval of a generic formulation.

Moving over to prior authorizations, they were typically uncommon (2.8% to 5%) from 2020 to 2023. However, as GLP-1 use and popularity continued to rise in the first half of the 2020s, prior authorizations for this drug class became universal at nearly 100%.

Lastly, they addressed the rise in OOP costs for GLP-1s, which remained steady from 2020 through 2024. However, in the 2024-2025 timeframe, OOP costs rose substantially. For standalone Part D plans, monthly costs increased from $99 to $109 in 2024 and then from $175 to $196 in 2025. For those in Medicare Advantage Part D plans, costs increased from $52 to $64 in 2024 and $93 to $101 in 2025.¹

“From 2020 to 2025, prior authorization for GLP-1s became near universal and OOP costs rose substantially in 2025, as plans increasingly required coinsurance,” they concluded. “Given the budgetary impact of GLP-1s for Medicare, ensuring beneficiary access and affordability will remain challenging.”

READ MORE: Diabetes Resource Center

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REFERENCES

1. Klebanoff MJ, Li P, Long JA, et al. Medicare Part D coverage and costs for glucagon-like peptide-1 receptor agonists. JAMA. September 24, 2025. doi:10.1001/jama.2025.15841

2. Gimont S, Mellerio P, Bryant B. Inflation Reduction Act signed into law. National Association of Counties. August 8, 2022. Accessed September 26, 2025. https://www.naco.org/news/inflation-reduction-act-signed-law

3. Cubanski J, Neuman T, Freed M. Explaining the prescription drug provisions in the Inflation Reduction Act. KFF. January 24, 2023. Accessed September 26, 2025. https://www.kff.org/medicare/explaining-the-prescription-drug-provisions-in-the-inflation-reduction-act/

4. O’Reilly KB. Spending on GLP-1s has grown dramatically. Here are the details. American Medical Association. August 27, 2025. Accessed September 26, 2025. https://www.ama-assn.org/public-health/prevention-wellness/spending-glp-1s-has-grown-dramatically-here-are-details