GLP-1 Spending Explosion: Ozempic, Mounjaro & the $8.4B Surge

GLP-1 receptor agonists have become the fastest-growing drug class in Medicare Part D history. Originally developed for type 2 diabetes, drugs like semaglutide (Ozempic/Wegovy) and tirzepatide (Mounjaro/Zepbound) have exploded in popularity due to their dramatic weight-loss effects — driving $8.44B in Medicare spending.

GLP-1 Drugs by Medicare Spending

Semaglutide — marketed as Ozempic for diabetes and Wegovy for weight loss — dominates GLP-1 spending at over $4 billion in Medicare Part D costs alone. Tirzepatide (Mounjaro), a newer dual GIP/GLP-1 agonist, is growing at an unprecedented rate, while older drugs like Trulicity and Victoza still account for significant spending.

The Weight Loss Revolution

GLP-1 receptor agonists work by mimicking the incretin hormone GLP-1, which stimulates insulin secretion and suppresses appetite. Clinical trials have shown weight loss of 15–22% of body weight with semaglutide and tirzepatide — results previously only achievable through bariatric surgery. This has created enormous demand, with Novo Nordisk and Eli Lilly struggling to meet supply.

For Medicare, the implications are profound. Currently, Medicare Part D covers GLP-1s only for their FDA-approved diabetes indication — not for weight loss alone. However, the Anti-Obesity Medications (AOMs) coverage debate continues in Congress, and if Part D begins covering GLP-1s for obesity, spending could increase by an estimated $35–50 billion annually.

Growth Trajectory

GLP-1 spending in Medicare Part D has grown by an estimated 40–60% year-over-year since 2020. Mounjaro (tirzepatide), approved in 2022, has been the fastest drug launch in pharmaceutical history. At current growth rates, GLP-1s could become the single largest drug spending category in Medicare within 2–3 years, surpassing even cancer drugs.

Prescribing Patterns

GLP-1 prescribing is concentrated among endocrinologists and internal medicine/family practice physicians. However, prescribing is expanding rapidly into cardiology (given cardiovascular benefits), nephrology, and even psychiatry. Geographic patterns show higher prescribing rates in Southern states with elevated diabetes prevalence, particularly Texas, Florida, and the Carolinas.

The rapid expansion of GLP-1 prescribing raises important questions about appropriate use, cost-effectiveness, and equity. While these drugs show remarkable efficacy, their high cost means that access is often determined by insurance coverage rather than medical need. Monitoring prescribing patterns at the provider and geographic level — as OpenPrescriber enables — is essential for ensuring equitable access and identifying potential overuse.