In-The-Know
Understanding Off-Label Prescription Drug Use
In this issue
As a benefits consultant, it's helpful to know that off-label prescription drug usage can affect plan coverage decisions, cost management, and conversations with both employers and members. Off-label prescription drug use means a medication is prescribed for something other than what the FDA originally approved it for. This could include:
- Treating a different condition than the one listed on the label
- Using a different form (like a pill instead of an injection)
- Changing the dosage (such as taking it twice a day instead of once)
- Prescribing an adult-approved drug for a child
Doctors can legally prescribe medications off-label when they believe it will help the patient. This is common practice—about 1 in 5 prescriptions in the U.S. are written for off-label use (Off-Label Usage: What Is It & What Are Some Popular Prescribed Drugs? - GoodRx). FDA approval for specific conditions isn't always required for a drug to be prescribed to treat it. A notable example of off-label use is Ozempic. Ozempic is a GLP-1 approved by the FDA to treat Type 2 Diabetes, however it is now being used for weight loss, type 1 diabetes and prediabetes (Off-Label Usage: What Is It & What Are Some Popular Prescribed Drugs? - GoodRx). Because GLP-1 drugs like Zepbound (now approved for sleep apnea) and Wegovy (approved for heart conditions) are getting more FDA approvals, there has been a significant rise in demand for GLP-1s and related medications prescribed off-label.
Employers are put into a position of prioritizing the health and well-being of their employees while managing the risks and costs of these drugs. According to the 2025 NFP US Medical Trends Report, GLP-1s like Ozempic have increased costs for employers on average by $1,200 to $1,400 per employee per month.
Advantages and disadvantages of off-label use
Benefits of increased off-label usage may include improved employee health and wellness, better access to medication that help treat their conditions, and overall employee satisfaction. However, increases in off-label usage can lead to high price per capita compared to on-label usage. On-label medication usage reduces medical expenditure and work lost cost by $515 (~13%) per individual (How Off-Label Use of Medicines Drives Health-Care Use and Disability | ITIF). Off-label usage can lead to more missed days and lost productivity for employees due to unexpected side effects. While some medications have been studied and tested for off label use, most of them have not, making the side effects unknown.
How can you help your clients?
One place to start is educating employees on their care options and using their benefits correctly. Employers can offer materials during benefits enrollment and information throughout the year. In addition, they should urge employees to ask questions from their medical providers and explore various treatment options. Wellness programs and initiatives can also be powerful tools to increase employee engagement, health, and wellness.
Helping clients check the fine print of their contracts is important. Employers need to clearly understand all contract terms. Helping your clients negotiate contract terms and putting the right processes in place can help reduce plan costs without sacrificing the coverage needs of their employees. Today’s landscape shows nearly 50% of plan cost coming from just 2% of members using high-cost drugs. Reviewing claims and usage data and revising their benefits plans to account for this may better serve your clients and their employees. It is important to remain a resource to clients and help them meet established business goals.
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