Brett Buchanan
Executive Vice President, Business Insurance
The rise of GLP-1 medications such as semaglutide and tirzepatide has reshaped the digital health market. Telehealth platforms, virtual care startups, and subscription wellness companies have moved quickly to meet demand for weight-loss treatments, and many have scaled quickly as a result.
But rapid growth can bring new risk. The same features that made these platforms attractive to patients — fast access, online intake forms, and no in-person visit requirement — are now drawing increased scrutiny from regulators. The FDA, state medical boards, and the FTC have all raised concerns about how these medications are prescribed, dispensed, and marketed.
For digital health companies, the issue is no longer just clinical care. It also involves regulatory exposure, liability management, and insurance adequacy.
Branded vs. compounded GLP-1s: a critical distinction
One of the most important risk questions in this market is whether a company is dispensing FDA-approved branded medications or compounded formulations.
Branded, FDA-approved therapies
Products such as Ozempic, Wegovy, and Mounjaro are subject to manufacturer and FDA oversight. That can reduce some product-related risk, but it does not eliminate liability. Claims may still arise from:
- Inadequate patient screening
- Off-label prescribing
- Failure to document clinical appropriateness
- Misleading or unapproved advertising
Compounded formulations
Compounded GLP-1 medications carry a different risk profile. During shortage periods, compounding pharmacies were allowed to produce certain formulations, and many digital health platforms incorporated them into their workflows.
That created operational flexibility, but it also increased exposure. Compounded medications are not regulated in the same way as branded products, which can raise concerns around consistency, sterility, and quality. If something goes wrong, liability may extend across the platform, prescriber, dispenser, and compounder.
As a result, companies that still rely on compounded GLP-1s should treat this as a higher-risk operating model rather than a long-term solution.
Temporary workarounds are not safe harbors
As regulatory pressure has increased, some compounders and platforms have tried to adapt rather than exit the market. Common approaches include:
- Using modified formulations, such as semaglutide salts
- Changing dosing formats or presentations
- Limiting compounded prescribing to patients who appear medically unable to use branded products
These approaches may buy time, but they may not create a clear safe harbor. Regulators have signaled concern about each of them, so companies using these methods should carefully evaluate whether exposure remains.
The insurance risk goes far beyond medical malpractice
A major mistake digital health companies make is assuming that medical malpractice coverage is enough. It may not be.
GLP-1-related claims can trigger multiple coverage sections at once, including:
- Medical professional liability
- Cyber and privacy liability
- Regulatory defense
- Advertising injury
- Technology errors and omissions
That matters because many digital health companies have fragmented insurance programs. Medical malpractice may sit with one carrier, cyber with another, and technology E&O with a third. When a claim arises, carriers can dispute who should respond first, leaving the insured caught in the middle with multiple deductibles and potential coverage gaps.
Why these claims are so difficult
A single GLP-1-related incident can involve several different allegations at once. For example:
- Prescribing issues may trigger medical professional liability
- Use of patient data may trigger cyber or privacy coverage
- Marketing practices may trigger advertising injury
- A tech workflow failure may trigger E&O
- A board complaint may trigger regulatory defense costs
In other words, the claim is rarely just one issue. It is often a multi-front event that touches the broader insurance program.
The market is already responding
Insurance carriers are already reacting to the rise in GLP-1 claims. Some specialist underwriters have added sublimits for compounded medication exposure, while others have excluded it entirely or paused new business for accounts with significant compounding risk.
For insureds, the implication is clear: a policy that excludes or severely limits the highest-risk part of the GLP-1 business model may leave important gaps in protection.
What digital health companies should review now
Companies operating in the GLP-1 space should conduct a careful review of both operations and insurance structure. Key questions include:
- Does our medical professional policy cover compounded medication claims?
- Do we have meaningful advertising injury limits?
- Are cyber and privacy coverages integrated, or split across carriers?
- Does our regulatory defense coverage include board actions and investigations?
- Could a technology failure be excluded under a bodily injury carveout?
- Are we still exposed to compounded medications, even indirectly?
If the answer to any of these is unclear, the program may not be built for today’s risk environment.
The bottom line
GLP-1 medications are not just a product trend. They are reshaping the liability landscape for digital health companies.
The combination of regulatory scrutiny, compounded-drug exposure, and multi-policy insurance complexity means that many companies may be carrying programs designed for a different era of risk. As the market matures, companies that continue to rely on workarounds or fragmented coverage may find that their insurance does not respond as expected when they need it most.
The right approach is to treat GLP-1 exposure as a program-wide issue — not just a medical one.
Does your program reflect today's market?
Many digital health companies operating in the GLP-1 space are carrying programs designed around a risk profile that may no longer match their actual exposure. A thorough program review, focused on coverage integration, form-level gap analysis, and carrier appetite for this specific risk class, is a strong starting point.
Marsh McLennan Agency’s Digital Health Practice works with venture-backed and growth-stage digital health companies. We help identify coverage gaps that may be overlooked in more general programs and build insurance structures that are designed to respond when claims span multiple coverage lines.
Contact us to request a coverage review.
