As employers drop coverage for GLP-1 drugs like Wegovy and Zepbound, retail giants are competing to lock in customers through direct-to-consumer programs
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Walmart $WMT, Costco $COST, and Amazon $AMZN are moving to capture a growing share of the weight loss drug market as employers cut coverage and push patients toward direct-to-consumer prescription programs, according to CNBC. Retail chains view GLP-1 prescriptions as a way to pull in long-term customers, calculating that a patient who picks up a weight loss drug will return for groceries, apparel, and much else besides.
Walmart, which ranks fifth nationally among prescription providers and operates close to 4,600 pharmacies, used an April update to its Better Care Services platform to combine GLP-1 fulfillment with nutrition coaching, fitness apps, and AI-powered support tools. Drug Channels Institute data put Walmart's pharmacy market share at 4.8%, a distant third behind CVS's 14.7% and Walgreens $WBA' 14.6%. Amazon rolled out a GLP-1 management program in April, routing patients through Amazon One Medical and Amazon Pharmacy with insured pricing starting at $25 a month and same-day delivery available across nearly 3,000 cities.
The pricing structures are designed to build loyalty. Eli Lilly $LLY's LillyDirect charges $299 to $449 a month, with lower prices tied to refilling within 45 days. Novo Nordisk's NovoCare Pharmacy offers an introductory price of $199 a month before stepping up to $349. Costco, through a partnership with Sesame, prices Wegovy at around $349 and requires a membership.
"The retailer that fills the prescription tends to sell the groceries too, and pharmacy is quietly becoming the membership battleground of American retail," said Jackie Swanson, managing partner at Gartner Consulting, according to CNBC.
The shift is being driven in part by employer pullback. According to a Mercer survey released last month, 6% of large employers pulled GLP-1 coverage this year; the drugs now account for 11.4% of pharmacy claims, up from 6.9% two years earlier. Health insurer Cigna $CI said earlier this month it would stop covering the drugs for its own employees.
The employer retreat is creating pressure on smaller pharmacies. Dared Price, who owns nine pharmacies scattered across small Kansas towns, said his stores have no way to compete on price with the major chains, and he worries the resulting fragmentation puts patients at risk — when a customer fills a GLP-1 prescription elsewhere, his system has no visibility into potential interactions with drugs like insulin or oral contraceptives.
The major retailers' push into weight loss drugs comes despite a track record of struggles in healthcare. Walmart shuttered its entire Walmart Health clinic network in 2024, pulling the plug on all 51 locations after deciding the primary care model could not generate adequate returns. Amazon shut down its Amazon Care telehealth service in late 2022 and previously walked away from Haven, the joint healthcare venture it formed with JPMorgan $JPM Chase and Berkshire Hathaway $BRK.B.
The Medicare GLP-1 Bridge program, which began July 1 and offers eligible Medicare beneficiaries weight loss drugs for $50 a month, adds another channel to the market. The program runs outside standard Part D benefit structures, with CMS acting as a single central processor for prior authorization and claims.
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