Delaware’s Office of Management and Budget (OMB) is recommending that the state discontinue coverage of GLP-1 drugs for weight loss for current and retired employees, citing rapidly rising costs.
Brian Maxwell, executive director of OMB, told the Joint Finance Committee that since the state began covering GLP-1 medications in 2023, expenses have far exceeded initial projections.
“The actual cost in 2023 was about seven times higher than estimated,” Maxwell said, noting that the State Employee Benefits Committee had forecasted nearly $2 million, while the actual expenditure reached over $14 million.
Looking ahead, projected costs for weight-loss use of these drugs in 2026 are estimated at roughly $92 million before rebates. “Several states have taken action to no longer cover these drugs,” Maxwell said, adding that rebate agreements with the state’s pharmacy benefits manager limit how much can be publicly disclosed.
GLP-1 drugs used for diabetes treatment also represent a significant expense, projected to cost the state more than $35 million this year before rebates.
OMB officials say that halting coverage for weight-loss purposes could yield substantial savings. Maxwell estimated that discontinuing coverage in fiscal year 2027 could save $50.8 million after rebates, with total savings reaching $179 million by 2029.
Healthcare costs are a major driver of Delaware’s budget. In his budget proposal, Governor Matt Meyer outlined $108 million in strategic cuts across government operations, including $31 million from premium increases. The plan also proposes a 4.2% increase in premiums over the next three years to cover rising healthcare expenses.
Ann Visalli, OMB deputy director, said that removing coverage for weight-loss GLP-1 drugs could eliminate the need for these premium increases. “We are continuing to negotiate with our pharmacy benefits manager not just on weight-loss drugs but also on diabetes medications, which remain expensive,” she said. “This proposal addresses a serious cost driver and makes sense for the state budget.”
