GLP-1 Cost Model Inputs
| Input | Conservative Estimate | Optimistic Estimate |
|---|---|---|
| Adoption rate (% of eligible) | 5% | 15% |
| Annual drug cost per member | $12,000 | $10,000 (rebates) |
| Discontinuation rate (year 1) | 30% | 20% |
| Downstream savings (diabetes prevention) | $2,000/member/year | $4,000/member/year |
| Downstream savings (CVD prevention) | $1,000/member/year | $3,000/member/year |
Break-Even Analysis
The break-even point for GLP-1 coverage — where downstream savings offset drug costs — depends on adoption rate and downstream savings. At a 10% adoption rate and $12,000 annual drug cost, the plan spends $1,200 PEPM on GLP-1 drugs. If downstream savings are $3,000 per GLP-1 user per year, the break-even is 4 years. If downstream savings are $5,000 per user per year, the break-even is 2.4 years.
Modeling Uncertainty
IQ Insight
GLP-1 long-term cost modeling involves significant uncertainty — adoption rates, downstream savings, and drug costs are all uncertain. Model multiple scenarios (conservative, base, optimistic) and present the range of outcomes to leadership. The goal is not a precise prediction — it is a framework for making an informed coverage decision under uncertainty.