As Americans go direct with GLP-1 prescriptions, Walmart, Costco, Amazon will be big weight-loss winners

As more Americans use GLP-1 weight-loss drugs to shrink their waistlines, retail giants are betting on a bottom-line bump tied to a shift in the way the drugs are priced and purchased. Employers are dropping coverage for GLP-1 drugs like Wegovy and Zepbound in greater numbers, nudging more patients to direct-to-consumer prescription programs, and providing Walmart, Costco, CVS and Amazon the opportunity to gain a greater share of the market.

For the retail pharmacy chains, a GLP-1 prescription is evolving into more than a simple sale — it's creating a beachhead to developing customer relationships that can run for years and pull shoppers toward everything else on the shelf. If a customer is going to get their GLP-1s from Walmart, they might as well get all their other prescriptions and load up on deodorant, paper towels, and condiments.

"Retailers are betting that if they can become the front door for obesity care, they'll earn a relationship that extends far beyond a single GLP-1 prescription," said Eric Bormel, managing director specializing in digital healthcare at Solomon Partners' healthcare group.

The DTC GLP-1 programs are customer acquisition tools, Bormel said, and retailers are increasingly valuing the entire ecosystem around the medication more than the medication itself, which is experiencing downward price pressure.

"Everyone recognizes that obesity treatment is becoming a longitudinal consumer relationship," Bormel said, noting that retailers aren't simply fighting over the same customers, but bringing in new ones through the GLP-1 business. It's one of the business tailwinds that is in stark contrast to initial concerns that GLP-1s were a headwind for retailers as consumers cut back on impulse buys and overall grocery spending.

New clothing needs is one way that retailers stand to benefit from GLP-1 usage. But the need for prescription refills fits into an even broader strategy for large retail pharmacy networks that have been betting the weight-loss drug boom, even at low margins, will pay off for their businesses.

"In a retail industry that spends billions chasing foot traffic, that is the most reliable recurring customer relationship on the market," said Jackie Swanson, managing partner at Gartner Consulting.

The prescription refill is a retail one-of-a-kind

Walmart becoming the retail pickup point for LillyDirect matters because the patient who collects a prescription walks through the store to reach it. "Pharmacy lock-in is loyalty-program economics applied to medicine, and it works because the refill, unlike almost everything else in retail, is non-negotiable," Swanson said.

She notes LillyDirect's cash prices, which run $299 to $449 a month, with the better pricing tied to refilling within 45 days. "Which is a loyalty program dressed as a discount schedule," Swanson said.

Novo Nordisk's NovoCare has a $199 price for introductory months, which later steps up to $349, a "classic acquisition funnel," Swanson said.

Meanwhile, Costco's Sesame partnership prices Wegovy at around $349 and requires a membership. "So the prescription now helps sell the $65 card," Swanson said.

Swanson says that, for customers, the discount is real, and for chains, what is a deal for customers is a deal for them, too: a minimal acquisition cost for a long-term relationship.

"When a discount is tied to a network, the patient's choice of pharmacy happens at sign-up, not at the counter, and that's a meaningful change for any pharmacy that has historically won business through service and proximity. The economics of these programs favor scale," Swanson said. "The retailer that fills the prescription tends to sell the groceries too, and pharmacy is quietly becoming the membership battleground of American retail," Swanson added.

Walmart, the nation's fifth-largest prescription provider with nearly 4,600 pharmacies, has moved aggressively to capture this shift. In April, the retailer expanded its Better Care Services digital platform to bundle GLP-1 prescriptions with weight-management support like nutrition coaching, fitness apps, and AI-driven coaching tools, while positioning itself as a one-stop destination rather than just a pickup counter. According to the most recent published data from Drug Channels Institute, a pharmacy industry research firm, Walmart currently holds 4.8% of the pharmacy market, well behind CVS's 14.7% and Walgreens' 14.6%. The DTC GLP-1 gives Walmart a new tool to try to catch up.

Amazon, which has spent years attempting to increase its healthcare footprint, is targeting the opportunity as well. In April, the company launched a GLP-1 management program through Amazon One Medical, the primary care business it acquired in 2022, and Amazon Pharmacy, offering insured patients prices as low as $25 a month and providing same-day delivery in nearly 3,000 cities, expanding to 4,500 by year's end.

Capital from retailers is flowing into weight-management platforms, virtual obesity care, nutrition coaching, metabolic health solutions, and employer care management programs.

Big retail has struggled to make healthcare profitable

The focus on GLP-1s from the major retailers is not new. As far back as 2023, then-Walmart CEO Doug McMillon said the company expected weight loss drugs to help drive sales. But that didn't necessarily translate into profitability. "Sales dollars are a lot bigger than the margin dollars," said Kroger CEO Rodney McMullen at that time. "The impact on profitability is pretty narrow," he said.

The big retailers have also struggled in the past to capture a broader slice of the healthcare pie. Walmart shuttered its Walmart Health clinics and virtual care service entirely in 2024, closing all 51 locations across six states after concluding the primary-care business wasn't sustainable amid reimbursement pressures and rising costs — five years after it first opened the clinics.

Amazon's history of healthcare efforts includes shutting down its Amazon Care telehealth service at the end of 2022, just weeks after unveiling its $3.9 billion deal for One Medical. Years earlier, it walked away from Haven, its joint health care venture with JPMorgan Chase and Berkshire Hathaway, which dissolved in 2021 without producing the cost savings the three companies had promised.

CVS has had to shutter many of its instore Minute Clinics and the company has had its share of other struggles over the years with trying to make healthcare as profitable as paper towels or back-to-school supplies.

Swanson said the timing of these DTC efforts dovetails with employers leaving the space. A survey by Mercer last month showed 6% of large employers dropped GLP-1 coverage this year, with the drugs' share of claims swelling to 11.4% from the 6.9% figure it was at in 2023. More employers have balked at paying for them because so many people could be eligible for the treatments and many patients stop them after achieving a weight-loss goal. Health insurance company Cigna said earlier this month it would stop covering the medicines for its own employees.

More employers are pointing workers to the direct-to-consumer platforms.

"Every patient who loses coverage is choosing a new front door for care this year, and retailers are competing to be that door at the exact moment of the decision. Real affordability gets delivered; a customer relationship gets acquired; both statements are true simultaneously," Swanson said.

As employers balk at cost, local pharmacies lose

Seth Friedman, pharmacy & health plan services practice leader at Gallagher, says on the other side of the opportunity for the retail chains are the independent pharmacies and non-chain players, who stand to be the big losers in this shift. "Smaller pharmacies stand to lose volume for sure," Friedman said.

Dared Price, who owns nine pharmacies located in small Kansas towns like Winfield, population 11,000, said he is already feeling the impact as customers race to the big chains for their GLP-1s. "It is frustrating to me to not be able to provide the same access to our patients that they do to CVS or Costco," Price said. "It puts independent pharmacies at a big disadvantage."

Price said the shift creates a potentially dangerous situation for some patients. "If one of my customers wants to do a DTC program and has to go to CVS or Costco, those pharmacies don't have access to the rest of their portfolio," Price said. Price, for his part, has no way of knowing whether a customer is taking GLP-1 drugs if they are getting them from big pharmacies. "My system won't flag any drug interactions with GLP drugs and there are drug interactions that can be dangerous," he said, adding it's a serious issue given that there are known interactions with other drugs like insulin or oral contraceptives that could be problematic.

CVS, however, says its pharmacists are ready to treat the whole patient. "Access is only part of the equation with GLP-1 medications. Patients also need support to stay on therapy and see results," said Sid Tenneti, senior vice president and interim president, pharmacy and consumer wellness, in a statement shared by a CVS spokesperson.

"Participation in NovoCare is one way we are assisting patients, but we are also participating in Medicare Bridge and accept most third-party prescription discount cards," the CVS spokesperson added.

That program, a new Centers for Medicare & Medicaid Services initiative launched July 1, offering eligible Medicare patients GLP-1s for weight loss at a flat $50 monthly copay, runs through a single central processor rather than through a patient's regular pharmacy of record, the kind of structural gap that worries some obesity-care specialists.

Some experts fear the focus on the lowest possible price for GLPs obscures the larger healthcare needs of patients even if pharmacies promise to watch the whole patient.

"My view on this is that the drugs are not the solution by themselves; they are a powerful tool. But the medication alone doesn't work that well. People do much better when cared for by expert clinicians," said Elina Onitskansky, founder & CEO of Ilant Health, an obesity-care center.

Onitskansky said she understands why chains are interested in the GLPs, but the race for the lowest price has created a "gold rush" mentality, and she worries that patients who participate in the DTC programs are leaving valuable information about their health behind, leaving pharmacists at a disadvantage. "I don't think fragmentation helps," she said.

Price says the pharmaceutical giants want to sign one contract and get 2,000 stores, but there are associations of smaller pharmacies with many members that could enter into similar DTC programs, but so far there's been no movement. "There are no good programs for independents. It is a travesty that there [aren't]," Price said.

—CNBC's Angelica Peebles contributed to this report.