This $2 billion unicorn startup is corporate America’s secret weapon against Ozempic

As drugs like Ozempic and Wegovy become more widespread, an increasing number of employees are asking their insurance to cover them. Recently though, employers including the University of Texas and private healthcare system Ascension have halted coverage saying that they cannot keep up with the rising costs as more people get on GLP-1 medications. In UT’s announcement about the change, it stated that coverage for these medications now cost $5 million per month compared with $1.5 million per month a year and a half prior.

This is where eight-year-old healthcare technology company Virta sees an opportunity. Virta works with employers—including United Airlines and UPS—and healthcare plans to help reverse type 2 diabetes and obesity, primarily using nutritional therapy. The company’s main selling point? Giving employers and providers a cheaper alternative to weight loss treatment GLP-1s. Patients who don’t have access to coverage can use its virtual platform and services for $249 a month. The company has received $133 million in funding from the likes of Tiger Global and Founders Fund.

“Having obesity or type 2 diabetes is not a personal choice,” says Virta cofounder and CEO Sami Ikinen. “You don’t [develop either one] because of a lack of willpower. It’s a metabolic disease, and we need to treat it as such.” Ikinen, who previously cofounded real estate marketplace Trulia, says that he was inspired to start the company after being diagnosed as prediabetic himself and working with doctors to change his nutritional habits to stop the spread of the illness.

Virta is in a fortuitous position partly by chance. The company was initially founded to treat pre-diabetic and diabetic patients. Because Ozempic and other GLP-1s were primarily created to treat diabetes (before being prescribed for weight loss in an off-label capacity), the company has significant experience observing how the medication worked on patients before demand drastically expanded over the past year.

“We were very focused on type 2 diabetes reversal for seven years,” Ikinen says. “Employers and health plans that we now serve—470 of them—also didn’t care about obesity or weight loss until 18 months ago when these GLP-1 drugs got approved. There was an increased demand on the payers.” He adds, “In the last 18 months, we went from exclusive focus on type 2 diabetes to treating people who are obese or overweight.”

Ikinen says that over the years, the company has developed a track record of weaning patients off GLP-1s while helping them maintain their weight. (Many GLP-1 users report regaining weight after they stop taking the shots.) Some diabetic Virta patients may get an Ozempic prescription to stabilize their blood sugar, but they would only be expected to take it temporarily and while on a nutritional plan.

Although Ikinen acknowledges that diet and exercise programs haven’t always worked as a permanent weight loss solution because they demand a lot of willpower from customers—that’s why people might go to WeightWatchers for years with no change—Virta sounds an awful lot like a diet. After customers get their biomarkers measured, they are provided with recipes and meal plans to follow, many of which involve eating a high-protein diet and cutting out carbs. The plan is designed with the purpose of eliminating cravings and making sure followers feel full.

Ikinen says that the primary difference between Virta and companies like Noom is that, although users can’t eat anything they want, they can eat however much they want. Virta continuously checks readings like blood sugar and adjusts the diet accordingly.

Looking at the seven years of data Virta has collected, Ikinen says that 70% of Virta patients came off GLP-1s within a year, often because they could not tolerate them. He also adds that there haven’t been many studies on the long-term side effects of the drugs. “We’ve treated almost 100,000 people now. Zero people that I’ve met for a patient say, ‘I wanna be on a drug for the rest of my life.’”

You’ll no doubt be hearing that line from a frugal employer or your healthcare insurer soon.

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