by Roberta Kwok,Yale University

Credit: Unsplash/CC0 Public Domain

Drugs like Ozempic have been found to be effective at promoting weight loss. They are also remarkably expensive. Some argue that the medications could ultimately save health care systems money by reducing the risk of obesity-associated diseases.

In the view of Yale SOM health economist Jason Abaluck, drugs like the blockbuster semaglutide—better known under the brand names Ozempic and Wegovy—are pretty close to miracle treatments.

"Of all the drugs that I've seenclinical evidencefor, these hold the biggest promise to improve health," Abaluck says. "I think that probably the predominant factor that will drive changes in life expectancy over the next five to 10 years will be better treatment of obesity with GLP-1 receptor agonists and related agents."

Given the potentially huge health benefits of these diabetes andweight loss drugs, should insurers and government programs such as Medicaid widely cover their use? After all, obesity is associated with medical conditions that are often expensive to treat. One argument is that, by lowering lifetime health care costs, "these drugs will actually save a lot of money," Abaluck says.

To find out, Abaluck and a large team of researchers tracked health care outcomes and expenses for more than 20,000 people. He and his co-authors—He Yuan Lu, Chungsoo Kim, Rohan Khera, Yuntian Liu, Hua Xu, and Harlan Krumholz of the Yale School of Medicine; Tedi Totojani, then a Yale research fellow; and John Brush Jr. of the Sentara Health Research Center in Virginia—found that semaglutide drugs were linked, as expected, with health improvements such as weight loss. But the medications didn't lower the costs of other types of care; non-semaglutide expenses actually increased during the two years after starting treatment.

The research ispublishedin the journalJAMA Network Open.

The study authors can't claim with certainty that the drugs caused the higher costs; it's possible that other factors distorted the expense trends. But for now, "this is a note of caution," he says. Officials might need to plan for a bump in costs and take steps to avoid a budgetary shortfall, such as negotiating lower prices for the drugs.

Abaluck emphasizes that he still believes the medications should be widely prescribed. "It would be a mistake to conclude from our study that 'therefore, obese people should not be using Ozempic because it might increase expenditures,'" he says.

Semaglutide is a molecule that mimics a naturally occurring hormone. When patients take a semaglutide drug, they feel fuller and their digestion slows down. Clinical trials have shown that the medications are effective weight loss treatments and are linked to other health benefits, includingreduced risk of heart attacks and strokesandlower overall mortality.

Abaluck's team wanted to answer two questions with their study. First, they wondered how health care outcomes might differ when patients took the drugs outsideclinical trials, which have strict oversight to ensure participants take every dose.

"When people use these in the real world, what happens?" he asks. For instance, people who have a prescription for an injectable form of semaglutide might skip some doses because they don't like needles.

Second, the researchers wanted to estimate the overall cost of semaglutide use to the health care system. Let's say that Medicaid negotiated an agreement to pay $4,000 a year for a semaglutide drug. Would the program end up saving more than $4,000 on other expenses to offset that cost? If so, "this is wonderful, and everyone who benefits from this should be taking it," Abaluck says. If patients get healthier but overall costs are much higher, "there's a tradeoff."

The researchers tracked 23,522adult patientsat Yale New Haven Health System and Sentara Health who were prescribed semaglutide from 2018 to 2025. Then the team compared people who were otherwise similar—on factors such as age, sex, race, and ethnicity—but received their prescriptions at different times. For instance, patient A might have been prescribed the drug in 2018, while patient B didn't get the prescription until 2020.

The team could then compare health care outcomes such as weight loss, blood pressure, and cholesterol between those two people. For instance, how much more weight did patient A lose than patient B over the period when A took the drug but B did not?

The researchers couldn't see the cost of health care services directly, but they could observe which services had been performed. They then estimated how much each service would have cost under Medicare and added up expenses over the next 24 months, excluding the cost of semaglutide itself.

Semaglutide prescriptions were linked to improvements on all of the health care outcomes, though the effects were smaller than in clinical trials. That discrepancy wasn't surprising since patients probably didn't adhere as rigidly to doses, Abaluck says.

Non-semaglutide expenses increased by a small amount: $80 more per month during the second year after treatment started, or roughly $1,000 annually. One possible explanation is that the prescription might lead the patient to have more regular appointments with their doctor.

At those check-ins, the patient might bring up other ailments—say, chronic knee pain—that they otherwise wouldn't have bothered to make an appointment for. The doctor might then refer the patient to a specialist, leading to more treatment—even knee surgery.

In this hypothetical scenario, it isn't necessarily clear whether the increased treatment is good or bad. It depends on whether the additional treatments are effective or of questionable benefit, Abaluck says.

He cautions that the study comes with caveats: other unseen factors might have influenced expenses. One could imagine a situation where the semaglutide prescription arose due to another health problem. For instance, let's say the patient initially saw their doctor to report chest pain, and the doctor prescribed semaglutide as part of a treatment plan.

Perhaps without semaglutide, the person's subsequent health care expenses would have increased by $3,000; but with the drug, they increased by only $1,000. In that case, "actually,semaglutidehelped, but it looks like it hurt," Abaluck says.

Still, the research raises the possibility that the drugs may not lead to long-term savings for insurers andgovernment programs. To avoid breaking the budget,federal officialsmight need to negotiate with the drug manufacturer to lower the prices that state Medicaid agencies pay.

"These are miraculous drugs," Abaluck says. "It's a health imperative to promote broader adoption." But if you're running an organization with a tight budget, "you can't suddenly expect that, because you cover these things, you're going to save money."

More information: Yuan Lu et al, Changes in Cardiovascular Risk Factors and Health Care Expenditures Among Patients Prescribed Semaglutide, JAMA Network Open (2025). DOI: 10.1001/jamanetworkopen.2025.26013 Journal information: JAMA Network Open

Provided by Yale University