What Employers Need to Know About Off-Label GLP-1 Prescribing

Off-label prescribing is when a physician prescribes an FDA-approved drug for a use that isn't on its approved label. It's legal and quite common for certain medications. 

For GLP-1 medications in particular, there’s a well-documented pattern of off-label prescribing of diabetes medications for weight loss. This is raising important questions among benefits leaders about what it means, how to interpret it within overall coverage strategy, and whether it has hidden cost implications. 

What off-label GLP-1 prescribing actually means

Off-label prescribing means a doctor uses an FDA-approved drug to treat a condition the drug wasn't specifically approved for. New drugs are typically approved for one condition at a time, based on clinical trial evidence: this drug, for this condition, gets these results, with these known side effects. 

But drugs are often effective for more than one condition, either because a trial for one condition turns up benefits for another, or because the underlying biology is similar enough that the same molecule works for different conditions.

Physicians have the legal right to use clinical judgment to prescribe off-label. One 2025 study found that 25% of prescriptions across medicines are off-label. 

Why the same GLP-1 molecule has two different names

GLP-1 manufacturers often sell the same molecule under two brand names, one per approved indication. Tirzepatide is an example: Mounjaro® is approved for diabetes, while Zepbound®, the same molecule, is approved for obesity and obstructive sleep apnea. Manufacturers call this dual branding: the same mechanism, tested and approved for a second indication, marketed under a distinct name for prescribing clarity and to route through the correct coverage pathway.

Mounjaro® trials showed that patients with diabetes were losing weight, which led to the Zepbound® submission. But before approval came through, physicians were already prescribing Mounjaro® off-label for weight loss, foreshadowing a pattern that has emerged across the GLP-1 category.

How common is off-label GLP-1 prescribing?

A study published in The American Journal of Managed Care examined the prevalence of off-label GLP-1 prescribing. The retrospective study found that in 2023, 30% of patients prescribed a GLP-1 indicated for diabetes did not have a diabetes diagnosis, up from 3.6% in 2018. 

Among individuals with obesity or overweight but without a diabetes diagnosis, the study shows increases in off-label prescribing of GLP-1s approved for diabetes through 2022, followed by a decline in 2023. The share of users prescribed Ozempic® (approved for patients with diabetes) without a diabetes diagnosis but with an overweight/obesity diagnosis increased from 2.7% in 2018 to 32% in 2022. However, that share decreased to 19% in 2023. At the same time, Wegovy® – approved for weight loss – dominated with 60% share. 

This suggests that GLP-1 off-label prescribing among individuals with obesity may be trending down as more medications are FDA-approved for weight management. 

More broadly, however, GLP-1 off-label prescribing continues to be a trend: a separate analysis from Truveta, a third-party real-world data firm, found that 56% of patients newly prescribed Ozempic® or Mounjaro® had no type 2 diabetes diagnosis.

Who pays for off-label GLP-1 use?

Most employers and private insurance plans have levers built into benefit design to ensure that employers are not shouldering costs for off-label GLP-1 use. This can show up through prior authorization requirements or tiering that automatically trigger when an off-label claim is received. 

If an off-label prescription comes through as a claim, patients may receive a denial of coverage for the medication. Through the denial approval process, providers can appeal the denial by sharing clinical documentation/medical necessity in order to get the costs covered for patients where clinically appropriate. 

However, when patients accept the off-label prescription when the insurance plan denies coverage, they become fully accountable for the cost. 

The prevalence of off-label GLP-1 use suggests that individuals are willing to pay full price out-of-pocket for these medications when they do not qualify for coverage. 

This mirrors growing demand for GLP-1 medications across uses and the explosion of direct-to-consumer options, which is opening up greater access. 

What employers can do about off-label GLP-1 spend

With the right coverage models and guardrails, the prevalence of off-label GLP-1 prescribing shouldn't mean employers are necessarily paying for this off-label use. 

However, there are important steps benefits leaders can take to ensure that plans don’t have hidden spend for GLP-1s for weight loss in the diabetes budget. These can also protect downstream spend for individuals who may be paying out-of-pocket for access to GLP-1 medications without effective clinical oversight, side effect management, or treatment for comorbid conditions that will show up in total cost of care and utilization. 

1. Audit claims data. Analyze diabetes and obesity pharmacy-related spend, by drug, over the last three years. Is it rising, at what rate, and does that match expected prevalence?
2. Revisit the authorization steps you have in place for prescription drug coverage approval. Most likely plans are already instituting tiering, prior auth, step therapy, or outright coverage removal for GLP-1s to restrict off-label use. It’s critical to revisit this to make sure you’re not shouldering any hidden costs from off-label prescribing.  
3. Know your true unit cost. Understand what you actually pay for every GLP-1 – diabetes and weight-loss alike – after rebates and other pricing mechanisms, not list price.
4. Evaluate alternative purchasing models. It's worth a conversation about direct-to-employer GLP-1 pricing even if your current spend looks diabetes-only. Lilly Employer Connect and Novo Nordisk both list program administrators offering DTE pricing; Goodpath is one.
5. Define an explicit weight management strategy. With GLP-1s this popular and this heavily marketed, doing nothing risks being costly. Without a safe, approved place to land, employees can be drawn toward less safe options like compounded medications or supplements masquerading as medication.
6. Educate plan members. Employees often turn to their employer for guidance on where and how to get health help. If weight-loss GLP-1s aren't covered, say so, and offer alternative support.

Off-label use isn't about doing something unsafe or unapproved. More often than not, it's a patient trying to get help, and a physician trying to provide it within the coverage the patient actually has. Coverage restrictions don't eliminate demand for weight-loss treatment; they redirect costs. The fix starts with visibility, data, and a clearly defined weight management strategy within your overall benefits design.

FAQ

What is off-label GLP-1 prescribing?

Off-label GLP-1 prescribing is when a physician prescribes a GLP-1 medication approved for one condition, like Mounjaro® for diabetes, to treat a different condition it isn't approved for, like weight loss. It's legal and based on clinical judgment, but manufacturers are barred from marketing a drug for an unapproved use.

Why would a doctor prescribe a diabetes GLP-1 like Ozempic or Mounjaro for weight loss?

Diabetes-labeled GLP-1s and weight-loss-labeled GLP-1s are often the exact same molecule under different brand names, so they work the same way in the body. A physician may prescribe the diabetes-labeled version off-label for a variety of reasons, like when the weight-loss version is harder to access.

How common is off-label GLP-1 prescribing?

In 2023, 30% of patients prescribed a GLP-1 indicated for diabetes had no diabetes diagnosis on record, up from 3.6% in 2018 (AJMC). A separate study from Truveta found 56% of patients newly prescribed Ozempic® or Mounjaro® had no diabetes diagnosis, suggesting the trend is accelerating among new prescriptions.

Does off-label GLP-1 prescribing cost employers money?

Most employers and private insurance plans have levers built into benefit design to ensure that employers are not shouldering costs for off-label GLP-1 use. This shows up through prior authorization requirements or tiering that are automatically triggered upon receipt of an off-label claim. When patients accept the off-label prescription when the insurance plan denies coverage, they become fully accountable to the cost out-of-pocket. 

What can employers do to manage off-label GLP-1 spend?

Start by auditing diabetes and obesity pharmacy claims data to see whether spend is rising faster than expected prevalence would explain. From there, employers can calculate their true GLP-1 unit cost after rebates, evaluate direct-to-employer pricing models, and define an explicit weight management strategy within cardiometabolic coverage rather than letting demand hide inside diabetes coverage.