Law firm DAC Beachcroft has warned of a surge in product liability claims following the rise of the popular glucagon-like peptide 1 receptor agonist (or GLP-1), a drug used to manage obesity.
Despite the health benefits of drugs like Ozempic and Wegowy, their rapid adoption has triggered a wave of legal challenges in the United States, with more than 2,190 lawsuits consolidated in a multidistrict class action lawsuit.
“Plaintiffs allege that manufacturers failed to adequately warn of serious side effects, including gastroparesis (delayed gastric emptying), vision loss (particularly NAION), and suicidal thoughts,” the law firm explained in its recent forecast for 2026.
DAC Beachcroft notes that the focus of litigation has recently turned to vision-related claims. The shift is driven by recent regulatory developments, including the European Medicines Agency’s authorization to update warning labels, as well as new findings cited in the American Journal of Medicine.
“These regulatory actions may be used by plaintiffs as evidence of known risks. Gastroparesis claims will now need to be confirmed with gastric emptying studies, which may exclude certain cases,” experts said.
Overall, DAC Beachcroft expects product liability risks to increase and continue to fluctuate as regulatory scrutiny intensifies.
Recent market reports indicate that the insurance market is facing immediate financial pressure due to increased use of these drugs.
Gallagher Re reports that the surge in GLP-1 use will cause lay prescription trends to jump from approximately 3.2% to an estimated 10-12% by 2024.
Currently, these drugs account for at least 9% of total prescription spending in many employer-sponsored plans and may add an additional 1% to 2% to overall health care cost trends.
Reinsurers say this increase in spending creates specific risks for reinsurance structures. Total stop loss is considered high risk territory. Wider adoption of these drugs increases the cost per member per month, making total coverage vulnerable to fluctuations.
Additionally, the impact on specific stops is negligible because the annual fee per member ($10,000-$12,000) typically does not violate the high deductible. Patient compliance issues also complicate the financial outlook.
Despite these challenges, financial analysts see a tremendous market trajectory. Jefferies predicts that the global market for GLP-1 may exceed US$100 billion.
Additionally, Swiss Re said the drugs could significantly reduce mortality rates in the U.S. and U.K. over the next two decades.
Jefferies also highlighted that a “slimer society” will lead to a healthier population, which is expected to drive improvements in morbidity, which could lower claims costs for products such as disability and long-term care.
Increased longevity may increase claims costs for products such as pension risk transfers and income annuities. When it comes to health insurance, the impact is mixed. While a healthier population may result in fewer visits to the hospital, premiums may fall to compensate for the reduced risk.
