Making Sense of GLP-1 Carve-Out Strategies
Posted on May 20, 2026
How Payers Can Adapt to the Rapidly Changing GLP-1 Landscape
Key Points
- GLP-1 medications are driving rapid utilization growth that traditional pharmacy benefit designs are increasingly challenged to manage.
- GLP-1 carve-out strategies offer a more targeted way for payers to balance access, cost control, and clinical outcomes.
- Successful carve-out approaches depend on a payer’s population, goals, and operational capabilities.
- Thoughtful, data-informed design and ongoing evaluation are critical to building a sustainable GLP-1 management strategy.
Few drug categories have reshaped pharmacy benefit discussions as quickly as GLP-1 medications. For some payers, traditional benefit designs may struggle to keep pace with expanded indications, utilization growth, inconsistent adherence, and evolving evidence.
As a result, GLP-1 carve-out strategies are becoming an increasingly common topic in payer conversations. When designed thoughtfully, carve-outs can offer a targeted way to manage access, cost, and outcomes without disrupting the broader pharmacy benefit.
This article explores what a GLP-1 carve-out strategy is, why payers are considering them, and the key models and considerations shaping effective approaches today.
What Is A GLP-1 Carve-out Strategy?
A GLP-1 carve-out strategy separates some or all GLP-1 medications from the standard pharmacy benefit and manages them through a distinct set of rules, partners, and/or programs. Rather than relying solely on traditional formulary placement and utilization management, a carve-out creates a more tailored framework for how these drugs are accessed, monitored, and paid for.
Carve-outs can vary significantly in scope. The common thread is intentional separation, allowing payers to apply more controls and accountability than what the core pharmacy benefit typically allows. A well-designed carve-out aims to align clinical appropriateness, patient support, and financial sustainability in a category where one-size-fits-all approaches may struggle.
Why GLP-1 Carve-Outs Are Becoming More Prevalent
GLP-1 carve-outs are gaining attention because many payers feel their current benefit structure is not built for a category this expensive, visible, and complex. Utilization has grown faster than many payers expected, driven by consumer demand, expanded indications, and more prescribers becoming comfortable with these medications for those expanded uses. At the same time, payers are still trying to balance affordability, access, and member experience.
Carve-outs have become appealing in part because they give payers a clearer way to put guardrails around GLP-1 spend. Instead of managing these drugs exactly like the rest of the pharmacy benefit, a carve-out can create a more defined structure around who is eligible, how the category is funded, and what level of utilization the payer is willing to support. This can make budget exposure easier to anticipate in a category that has grown quickly. Treating GLP-1s differently does not automatically solve the problem, but it can give payers more control over an area where standard benefit structures may feel too broad or too blunt.
In short, carve-outs are getting more attention because GLP-1s often require more nuanced management than the core benefit was designed to provide.
Comparing the Major Carve-Out Models
There is no single standard GLP-1 carve-out approach because organizations pursue carve-outs for different reasons. In practice, the model selection comes down to what the payer is trying to improve most: clinical management, cost predictability, operational execution, or some blend of the three. Here are examples of the types of GLP-1 carve-out models available in the market.
Vendor Managed Solutions (Lifestyle, prescriber network)
Vendor-managed solutions place a third party in the center of program operations, typically combining lifestyle intervention, clinical oversight, and a prescriber network to guide appropriate initiation and continuation. These programs often emphasize standardized clinical pathways, prior authorization support, documentation requirements, and longitudinal engagement to align utilization with program criteria. Organizations find value in the operational lift a vendor can absorb, especially when internal resources are constrained or when consistency across prescribers and member coaching is a priority. This model can also help create a single point of accountability for outcomes reporting, adherence support, and member experience, even when the underlying benefit coverage remains in place.
Benefit Rider (Optional additional coverage, similar to dental or vision)
A benefit rider approach treats GLP-1 coverage as an optional add-on, separate from the base plan design, similar in concept to elective supplemental benefits. Eligibility for the rider is typically defined at the employer group level, and member cost share, coverage criteria, and program requirements are established as part of the rider’s terms. Organizations may leverage a rider to segment coverage decisions across groups, support different budgeting strategies, or align GLP-1 access with specific workforce needs without changing the baseline benefit for everyone. This structure can also provide clearer boundaries by distinguishing standard coverage from optional expanded coverage, while still operating within more traditional benefit and reporting constructs.
Cash Pay (DTC or direct to employer)
In a cash-pay model, the GLP-1 medication is offered outside the core pharmacy benefit, either through a direct-to-consumer (DTC) channel or via a direct arrangement between an employer and a third-party program. Members typically pay an upfront or subscription-style price for access to virtual care, eligibility screening, and medication access pathways, with pricing that may be standardized or tiered by service level.
Where this model gets more nuanced is in how the “cash pay” transaction is structured and who funds what. In some arrangements, the member is truly self-pay and the employer’s role is limited to offering an access pathway (for example, a vetted telehealth and fulfillment experience) with no employer dollars attached. In others, employers keep GLP-1s excluded from the plan but apply a defined contribution to reduce the member’s out-of-pocket cost either directly at the point-of-sale or through retrospective reimbursement.
Organizations consider these models when they want a clearly bounded financial commitment, a simpler administrative path outside traditional claim adjudication, or a way to offer an option without redefining coverage rules across the entire population. It can also be used to test demand, engagement, and operational workflows before deciding how broadly to integrate GLP-1 coverage into the standard benefit design.
| Model | What It Is | Why It Is Used | Where It Typically Sits |
|---|---|---|---|
| Vendor managed solutions (Lifestyle, prescriber network) | Vendor runs clinical pathways, coaching, and prescriber network to manage utilization | Operational support, consistency, potential for standardized criteria and engagement | Often integrated with the benefit, sometimes partially carved out |
| Benefit rider (optional coverage) | Optional add-on coverage for GLP-1s, selected by employer groups | Segmented coverage choices, budgeting flexibility, clearer separation from base benefit | Within benefit structure, but as an elective component |
| Cash pay (DTC or direct to employer) | GLP-1 access offered outside the standard pharmacy benefit via a direct channel | Bounded financial exposure, simpler setup, optionality without redesigning core coverage | Outside the plan benefit, vendor or direct arrangement |
Hybrid Models
Although these categories are helpful for comparison, many real-world offerings do not fit neatly into just one. That is why the most important question is not which category a vendor or solution fits into, but what your plan is trying to achieve and what tradeoffs you are willing to make to get there.
If your primary concern is clinical stewardship, the right answer may look very different than if your top concern is budget predictability or operational simplicity. The most effective GLP-1 carve-out is the one that aligns most closely with your plan’s actual goal, not the one with the most features or the strongest sales story.
Considerations For GLP-1 Carve-Out Strategies
Before implementing a carve-out, payers should carefully evaluate several key considerations.
Clinical alignment: Clear eligibility criteria, appropriate step therapy, and indication-specific rules are critical. Overly rigid designs can create provider friction, while overly loose criteria can undermine cost control.
Operational complexity: Carve-outs introduce additional workflows. Payers should assess whether systems, staff, and partners can support prior authorization, monitoring, and member communication without creating confusion or delays.
Member experience: GLP-1 medications often come with high expectations. Transparent communication about coverage requirements, program participation, and support resources helps reduce dissatisfaction and dropout.
Financial accountability: Carve-outs work best when financial incentives are aligned with outcomes. This may include performance guarantees, adherence metrics, or shared accountability models that go beyond simple utilization controls.
Data and reporting: Visibility into initiation, persistence, discontinuation, and outcomes is essential. Without reliable data, it is difficult to assess whether a carve-out is delivering value.
Most importantly, carve-outs should be viewed as evolving strategies, not set-and-forget solutions. With near-constant changes in utilization patterns and market dynamics, a working understanding of what is available to support your strategy is critical.
That reality is what led us to conduct an analysis of the GLP-1 landscape. We surveyed 20+ PBM/PBA vendors to assess their offerings for GLP-1 management and leverage those results to support our clients. With so many moving pieces and tradeoffs to consider, having a partner who can help you sort through the noise and focus on what best aligns with your goals can make a meaningful difference in how your pharmacy benefit performs over time.
Closing
GLP-1 medications are likely to remain a defining feature of pharmacy benefit strategy for years to come. For payers facing escalating costs and inconsistent outcomes, carve-out strategies offer a way to regain control while still supporting appropriate access and care.
As payers continue to evaluate how best to manage GLP-1 medications, having informed perspectives, real-world comparisons, and practical frameworks can be the difference between reacting to the market and building a strategy that holds up over time.
Our team has spent time analyzing the evolving GLP-1 landscape to better understand the options available and the tradeoffs payers are navigating today. If you are interested in learning more about that analysis or discussing how these insights may apply to your own strategy, we encourage you to reach out and continue the conversation.
