Do GLP-1 Medications Pay for Themselves?
GLP-1 receptor agonists improve treatment for diabetes, obesity, and cardiovascular disease, but their high prices create fiscal pressure for insurers. GLP-1 spending may overstate net costs because health improvements reduce downstream health spending. We use insurance claims to estimate GLP-1 cost offsets using a staggered adoption design. Over a five-year follow-up, GLP-1 drugs do not reduce downstream medical spending and actually lead to a small increase, largely via increased outpatient care. Offsets are similar across baseline health sub-populations. However, cost increases for semaglutide—a later-generation GLP-1 that is more effective—are smaller and statistically indistinguishable from zero.
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Copy CitationCoady Wing, Sih-Ting Cai, Kosali I. Simon, and Daniel W. Sacks, "Do GLP-1 Medications Pay for Themselves?," NBER Working Paper 34678 (2026), https://doi.org/10.3386/w34678.Download Citation
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Non-Technical Summaries
- Author(s): Sam BockJasmin MoshfeghJonathan ZhangCoady WingSih-Ting CaiDaniel W. SacksKosali I. SimonGlucagon-like peptide-1 receptor agonists (GLP-1s), better known by brand names such as Ozempic and Wegovy, have generated intense...
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