This article first appeared on GuruFocus.
Bank of America Corp. (BAC, Financials), the second-largest U.S. lender by assets, is spending more than $250 million a year to provide GLP-1 weight-loss drugs to its employees.
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The cost has gone up from close to nothing five years ago, said Chief Executive Brian Moynihan, but he called the coverage a worthy investment.
The bank spends more than $2 billion a year on health care for about 211,000 employees. GLP-1 medicines now account for roughly 13% of the company's entire health care spend.
Bank of America pairs access to the drugs with health coaching to aid weight loss and lifestyle modifications. The corporation is also talking to drug makers and pharmacy-benefit managers to lower expenses, Moynihan said.The investment underscores the great demand for obesity treatments and the financial burden that might be borne by businesses that opt to pay them.
Another big source of demand for Eli Lilly and Novo Nordisk could come from wider workplace coverage.As the benefits of GLP-1s get more expensive, investors will be looking to see if other big companies follow Bank of America's lead.