Medicaid Obesity GLP-1 Coverage May Offset Some Diabetes-Labeled Use

Medicaid coverage of obesity-labeled glucagon-like peptide-1 receptor agonists (GLP-1 RAs) was associated with a significant rise in prescriptions for those products, but total GLP-1 RA use grew by a smaller, nonsignificant amount, suggesting some obesity-labeled use may replace diabetes-labeled prescriptions, according to a study published in JAMA Health Forum.¹

Researchers at the University of Pennsylvania used Medicaid State Drug Utilization Data from 2021 to 2024 and synthetic difference-in-differences models to compare 9 states that began covering obesity-labeled GLP-1 RAs during that period with 36 control states that did not. Obesity-labeled products included liraglutide (Saxenda; Novo Nordisk), semaglutide (Wegovy; Novo Nordisk), and tirzepatide (Zepbound; Eli Lilly). Diabetes-labeled products included liraglutide (Victoza; Novo Nordisk), dulaglutide (Trulicity; Eli Lilly), semaglutide (Ozempic and Rybelsus; Novo Nordisk), and tirzepatide (Mounjaro; Eli Lilly).

Because federal statute makes Medicaid coverage of obesity medications discretionary, fewer than one-third of states cover GLP-1 RAs for obesity, whereas all cover them for diabetes. The 2 versions share identical active ingredients. Tirzepatide doses are the same across indications, and the 3 lower doses of semaglutide and liraglutide match, although the obesity-labeled versions reach higher maximum doses.

Coverage Tied to 6.48 More Obesity-Labeled Prescriptions per 1000

Coverage was associated with an additional 6.48 obesity-labeled GLP-1 RA prescriptions per 1000 beneficiaries (95% CI, 4.00-8.96; P < .001), with estimates increasing nearly every quarter after coverage began. By comparison, total GLP-1 RA prescriptions rose by 4.17 per 1000 (95% CI, –0.33 to 8.67; P = .07) and diabetes-labeled prescriptions changed by –2.16 per 1000 (95% CI, –5.27 to 0.96; P = .17), neither of which was statistically significant. Prescription months, which account for the length of each fill, followed a similar pattern, with a significant increase for obesity-labeled products and no significant change in total use.

Diabetes-labeled use climbed everywhere. Prescriptions per 1000 beneficiaries rose from 8.71 in 2021 to 25.28 in 2024 in treated states and from 8.21 to 20.74 in control states. The authors noted that the negative estimates reflect slower growth relative to control states, not an absolute decline.

Restrictive Prior Authorization Tied to 3.02 Fewer Diabetes-Labeled Prescriptions

In states with prior authorization criteria more restrictive than the FDA label, coverage was associated with a significant relative decrease of 3.02 diabetes-labeled prescriptions per 1000 beneficiaries (95% CI, –5.69 to –0.36; P = .03). States with no prior authorization or criteria matching the label showed no significant change in diabetes-labeled prescriptions.

The authors suggested restrictive criteria may steer obesity-labeled drugs toward patients with diabetes or high diabetes risk who would otherwise receive a diabetes-labeled product, whereas looser criteria may reach more previously untreated patients.

A separate working paper using the same Medicaid data did not find similar substitution effects. The authors attributed the difference partly to methodology and partly to California, which required no prior authorization, and Pennsylvania, whose criteria matched the label. Both had effects opposite in sign to the remaining states. The diabetes-labeled estimate also weakened significantly under an alternative estimator in sensitivity analyses.

Other limitations included the ecological design, which cannot show individual patients switching products; reimbursement figures that exclude Medicaid rebates; and semaglutide and tirzepatide shortages during the study period.

Findings Arrive as States Revisit Coverage

California, New Hampshire, Pennsylvania, and South Carolina all ended Medicaid coverage of GLP-1s for weight loss effective January 1, 2026, while Missouri, Tennessee, and Utah have added coverage since August 2024, according to a Milliman analysis.² The analysis noted that federal pricing agreements and the CMS BALANCE model could prompt states to reconsider.

The study authors argued that utilization and cost projections used in these decisions should account for effects across the entire drug class.¹

“Results of this cross-sectional ecological analysis suggest that substitution effects are possible between obesity-labeled and diabetes-labeled GLP-1 RAs in the Medicaid program, varying by state coverage policies, that could affect the impact of states’ coverage decisions regarding obesity-labeled GLP-1 RAs on total GLP-1 RA utilization and cost,” wrote the researchers of the study.

References

1. Khanna R, Wang MC, Venkataramani AS. GLP-1 receptor agonist coverage for obesity in Medicaid and total GLP-1 receptor agonist utilization. JAMA Health Forum. 2026;7(9):e263353. doi:10.1001/jamahealthforum.2026.3353
2. Elmeghni A, Gruenhaupt M, Niakan K. The evolving landscape of anti-obesity medication coverage in Medicaid. Milliman. March 19, 2026. Accessed October 15, 2026. https://www.milliman.com/en/insight/evolving-landscape-obesity-coverage-medicaid