Cost Savings from GLP-1 Drugs

GLP-1 medications may help reduce costs for both employees and employers by cutting down on sick leave, according to a recent economic study.

The research indicates that individuals using these drugs, like Ozempic and Wegovy, took 17% less long-term sick leave compared to non-users. Long-term sick leave is classified as absences due to illness that exceed 30 days, as noted in a paper released this month by the National Bureau of Economic Research.

These medications, commonly prescribed for diabetes or obesity, have demonstrated health benefits, including lowering the risk of serious cardiovascular events such as heart attacks and strokes.

Jonathan Zhang, a co-author of the study and a professor at Duke University, noted, “We can assume those serious health events would result in extended absences from work. Therefore, the potential savings from fewer absences is significant.”

The analysis revealed that reduced absenteeism could yield savings of up to 1.5% of an employee’s salary, averaging around $866. This analysis was based on data from Denmark regarding worker and medication use.

It’s important to consider that Denmark’s sick leave policies are quite different from those in the United States. For instance, Danish employers are responsible for paying full salaries for sickness-related absences up to 30 days, while long-term sick leave beyond that is covered by the government.

The study highlighted that reduced short-term illnesses provide savings for employers, while the decrease in longer-term absences benefits the government financially.

Zhang illustrated this by saying, “If you take two days off, your employer continues to pay your salary. But if you’re on GLP-1 medications, you may not need that time off.” He pointed out that savings linked to GLP-1 drug use would primarily benefit the government in Denmark.

He added, “While there are fiscal advantages, it may not translate to direct benefits for the individual, given the country’s generous sick leave policies.”

Zhang also suggested that the findings might have relevance for the U.S. job market.

“In the U.S., lacking generous sick leave, workers often show up even when unwell. This can lead to decreased productivity because they aren’t at their best,” he explained. This scenario isn’t beneficial for either the employee or the employer.

He further mentioned that if these medications help lessen “presenteeism”—working while not fully functional—companies could see an increase in productivity, and workers might achieve more, potentially leading to more promotions.