Do GLP-1 medications pay for themselves?

Kosali Simon, Coady Wing, Sih-Ting Cai and Daniel Sacks

Economics Virtual Symposium 2025 from Stata Users Group

Abstract: GLP-1 drugs have demonstrated tremendous health effects in clinical trials, suggesting that some of their high price may be offset by reduced spending on other forms of healthcare. We use commercial insurance claims data to study the effects of GLP-1 initiation on subsequent downstream health expenditures. We focus on individuals with a type 2 diabetes diagnosis who are continuously enrolled in a commercial plan for eight years and who are prescribed a GLP-1 medication at some point between 2018 and 2023. We use a stacked difference-in-differences design to compare healthcare spending of earlier GLP-1 adopters to later GLP-1 adopters, allowing us to estimate the impact of initiation while controlling for underlying time trends and baseline characteristics.

Date: 2025-11-07
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