Demand for GLP-1 Drugs Creates New Fraud Risks

The explosive popularity of GLP-1 medications has created new challenges for insurers, health plans and fraud investigators, according to Stephanie Benson, CFE, senior manager in Evernorth Health Services’ Special Investigations Unit. During her virtual session at the 37th Annual ACFE Global Fraud Conference, she explored how social media-driven demand for weight loss drugs has contributed to emerging fraud schemes, misuse patterns and investigative concerns across the healthcare industry. 

GLP-1 Medications Surge 

GLP-1 medications — Ozempic, Wegovy, Mounjaro and Saxenda — were originally developed to treat Type 2 diabetes but have gained widespread popularity for weight management. Although the drugs have existed for years, Benson explained that usage surged in 2023 as social media influencers, celebrities and telehealth providers amplified awareness and promoted access to the medications. She described 2023 as a “perfect storm” in which testimonials, before-and-after photos, celebrity endorsements and discussions about obtaining the drugs flooded social media. According to Benson, “People that had never heard of it were seeing it everywhere.”  

The rise in demand has been accompanied by rapid expansion of access channels. GLP-1 medications were traditionally prescribed by primary care physicians or specialists and filled through retail pharmacies. Now patients increasingly obtain them through telehealth platforms, online prescribing services and mail-order and compounding pharmacies. These models have improved access for some patients, but they’ve also introduced new oversight and fraud challenges.  

Cost is one of the primary drivers of fraud risk. Benson said that monthly expenses can exceed $1,000 for patients paying cash and insured patients may pay significant out-of-pocket costs. Insurance coverage remains fragmented. Diabetes-related use is widely covered, but coverage for weight management varies widely among commercial plans and is generally restricted under Medicare. Before approving coverage, many plans require prior authorizations, step therapy, minimum body mass index (BMI) thresholds, participation in weight management programs and clinical documentation. “Those barriers can create opportunities for fraud, waste and abuse,” Benson said.  

Benson explained that there is “no one-size-fits-all approach to coverage.” Eligibility requirements, approval standards and renewal criteria differ among plans. This “fragmented coverage landscape” affects patients, providers, pharmacies and investigators. 

Combating GLP-1 Fraud 

Among the most common schemes identified were doctor shopping, stockpiling medications, falsifying laboratory results, manipulating diagnoses to meet approval criteria and submitting inaccurate prior authorization requests. Benson described doctor shopping as visiting multiple providers to obtain the same medication without coordinated care. Patients stockpile medications and accumulate quantities far beyond what’s medically necessary. Investigators have also observed pharmacies and prescribers altering documentation to secure approvals and patients diverting excess medication to friends or family members.  

Counterfeit and unapproved compounded GLP-1 products sold online also pose a concern. Benson warned that some compounded products aren’t FDA approved and may be produced without appropriate quality controls. “You really don’t know what is in that medication that you are injecting,” she said. 

Benson highlighted red flags that can help identify suspicious activity. 

• Unusually high prescribing volumes.  

• Diagnoses that don’t align with clinical records.  

• Telehealth providers operating across multiple states. 

• Rapid increases in prescribing activity.  

• Duplicate therapies and unusual pharmacy concentration patterns.  

She also stressed the importance of data analytics. “It starts with the data,” Benson said, adding that investigators rely heavily on outlier identification, peer comparisons, trend analyses, utilization reviews and documentation reviews to identify questionable prescribing patterns.  

She also emphasized the importance of provider, pharmacy and patient outreach. Interviews and education efforts can uncover facts not visible in claims data while helping stakeholders recognize emerging fraud schemes. Benson said organizations should combine analytics with proactive monitoring, validation of diagnoses and ongoing oversight of prescribers and pharmacies. 

Catching ‘Dr. Copycat’ 

Using a case study involving a provider dubbed “Dr. Copycat,” Benson illustrated how investigators proactively identified anomalous prescribing behavior through advanced analytics. The provider, a psychiatrist, had become a significant outlier for prescribing diabetes drugs Mounjaro and Ozempic. Investigators discovered that many patients receiving the drugs showed no evidence of diabetes in either medical or pharmacy claims records. “There wasn’t any kind of evidence of a large number of the patients having Type 2 diabetes,” Benson said.  

Further investigation revealed online posts and social media discussions identifying the provider as a source for obtaining GLP-1 medications for weight loss. Patient interviews later supported those findings. Many patients reported seeking treatment primarily to lose weight and said they didn’t have Type 2 diabetes. Others stated they had little direct interaction with the provider and communicated primarily through messaging applications rather than audio or video telehealth visits.  

The investigation intensified after analysts reviewed laboratory reports submitted with prior authorization requests. Investigators observed repeated formatting patterns, duplicated information and striking similarities across reports allegedly belonging to different patients. Outreach to hospital and third-party laboratories ultimately revealed that the facilities couldn’t verify numerous lab reports and couldn’t locate corresponding patient records.  

Patient interviews provided additional evidence. Multiple patients reported they’d never completed the laboratory testing referenced in their records and weren’t aware prior authorization requests had been submitted on their behalf. Patients paid separate fees for prior authorization services, an unusual arrangement that raised additional concerns. 

Investigators ultimately concluded that “Dr. Copycat” cloned or fabricated laboratory values, misrepresented diagnoses to obtain approvals and failed to meet expected standards in telehealth interactions. Benson said the case modeled all three elements of the Fraud Triangle: pressure from surging patient demand, opportunities created by authorization system weaknesses and rationalization based on a desire to help patients obtain the medications. The investigation also underscored the critical role of analytics and interviews, which Benson described as “key to unraveling this case.” Benson concluded that stronger verification controls, proactive monitoring, enhanced provider oversight and continued education will be critical as insurers, pharmacy benefit managers and fraud investigators confront emerging GLP-1-related fraud risks.