The surge in demand for obesity-related medications, including Ozempic, is placing a growing financial strain on employee benefit plans worldwide, according to the Changing Face of Employee Health report from Howden Employee Benefits.

 

The research shows 93% of global companies now cover weight-management drugs in their health insurance plans, directly impacting costs and premiums. Nearly two-thirds (65%) of these businesses view such coverage as a cost concern, with 62% expecting costs to climb further—and only 5% anticipating any reduction.

 

More than one in five employers (22%) already cite obesity-related treatments as the top driver of rising healthcare costs. With 92% of companies expecting overall medical expenses to increase, 43% are redesigning healthcare plans to meet employee needs, while 67% are investing in prevention and wellbeing initiatives to mitigate health risks.

 

Leigh Dauncey, Regional Employee Benefits Leader for Middle East, Africa and India (IMEA), highlighted the shift in employer priorities: “The financial impact of new obesity and weight management medications is now a live issue for employers across India and the wider region. These treatments are moving quickly from emerging trend to mainstream benefit consideration, which is driving important conversations around plan design, affordability and long-term sustainability.”

 

She added: “These medications are delivering real health outcomes for employees, and demand is rising fast. At the same time, employers across the region are navigating increasing medical inflation and pressure on benefit budgets. Balancing employee expectations with cost control is becoming a central challenge, particularly as healthcare costs continue to rise year on year.”

 

Dauncey noted a shift toward proactive strategies: “We are seeing a growing focus on prevention, early intervention and wellbeing strategies as employers look for sustainable ways to manage health risks over the long term. Investing earlier in employee health supports better outcomes and helps organisations stay ahead of escalating costs while continuing to offer benefits that attract and retain talent.”

 

Neeran Choudhary, Head of Employee Benefits, Howden India, stressed the local impact: “Across India, weight loss drugs have moved from headlines to households, from metro hospitals to tier 2 clinics, hence the demand is undeniable. But so is the budget impact. 

 

"Our task is to balance access with affordability: clear eligibility, real world outcomes tracking, and integration with nutrition, mental health and disease management. We will evolve plan design responsibly to meet coverage expectations while protecting sustainable benefits.”

 

The report underscores a critical message for employers: without careful plan design and investment in employee health, rising costs and unmet expectations could affect staff retention, talent attraction, and overall productivity.