Victoria Klesty | Reuters
Within the U.S., Wegovy is not any longer only for weight reduction.
The blockbuster drug — one among a handful of weight reduction treatments to skyrocket in popularity over the past yr — is now approved within the U.S. for heart health, too. But that won’t translate to wider insurance coverage of the weekly injection drug from Novo Nordisk and similar obesity treatments just yet.
Some employers and other health plans are still reluctant to cover Wegovy as a consequence of its hefty $1,350 monthly price tag, which they are saying could significantly strain their budgets. Additionally they produce other questions, similar to how long patients actually stay on the treatment.
On the very least, some plans will take notice of Wegovy’s recent approval and begin assessing whether to cover the treatment once they next update their formularies, some insurance industry experts told CNBC. That would mean difficult decisions ahead for insurers and certain a patchwork system of coverage for Americans who’re in search of treatment to navigate.
“The more advantages that come from weight reduction drugs, I feel the greater the pressure goes to be to start out including those drugs in a formulary and canopy them in standard insurance plans,” said John Crable, senior vp of Corporate Synergies, a national insurance and worker advantages brokerage and consultancy. “But my gut tells me it will take more to persuade some insurers.”
Wegovy is a component of a category of medicine called GLP-1s, which mimic a hormone produced within the gut to suppress an individual’s appetite and help regulate blood sugar. Coverage for those treatments when used for weight reduction is a mixed bag.
Roughly 110 million American adults live with obesity and roughly 50 million of them have insurance coverage for weight reduction drugs, a spokesperson for Novo Nordisk said in a press release. The corporate is actively working with private insurers and employers to encourage broader coverage of those drugs, and is advocating for the federal Medicare program to start out covering them, the spokesperson added.
The Centers for Medicare and Medicaid Services is reviewing the FDA’s expanded approval of Wegovy and can share additional information as appropriate, an agency spokesperson said in an email.
The spokesperson added that state Medicaid programs could be required to cover Wegovy for its recent cardiovascular use. By law, Medicaid must cover nearly all FDA-approved medications, but weight reduction treatments are amongst a small group of medicine that might be excluded from coverage. Around one in five state Medicaid programs currently cover GLP-1 drugs for weight reduction.
Among the nation’s largest insurers, similar to CVS Health’s Aetna, cover those treatments.
But many employers don’t. An October survey of greater than 200 corporations by the International Foundation of Worker Profit Plans, or IFEBP, found only 27% provided coverage for GLP-1s for weight reduction, compared with the 76% that covered those drugs for diabetes. Notably, 13% of employers indicated they were considering coverage for weight reduction.
Downstream health effects
The Food and Drug Administration approved Wegovy for weight management in 2021. In a landmark decision earlier this month, the agency expanded that approval after Wegovy was found to chop the danger of great cardiovascular complications in adults with obesity and heart disease.
The choice was based on a five-year, late-stage trial, which showed that weekly injections of Wegovy slashed the general risk of heart attack, stroke and cardiovascular death by 20%.
The approval demonstrates the numerous downstream health advantages of Wegovy — and potentially similar drugs — for severe conditions attributable to extra weight. Obesity increases the danger of several conditions, similar to diabetes, heart disease and even some cancers.
It also challenges what some health experts call an “outdated” narrative driving hesitancy amongst some insurers: that weight reduction treatments offer only a cosmetic reasonably than a medical profit.
“We have not previously seen any anti-obesity medication decrease the danger of heart attack and stroke,” said Dr. Jaime Almandoz, a weight management and metabolism specialist on the University of Texas Southwestern Medical Center in Dallas. “What we’ve got is proof that treating obesity is basically life-saving, and I feel it really shifts the conversation.”
An obesity patient takes a injection of weight reduction medication.
Joe Buglewicz | The Washington Post | Getty Images
Some health experts argue that covering Wegovy and other GLP-1s for weight reduction could reduce a plan’s health-care costs down the road and improve future health outcomes for patients.
Shawn Gremminger, the president and CEO of the National Alliance of Healthcare Purchaser Coalitions, said employers could be “well disposed to cover” those drugs in the event that they are effective at lowering long-term costs. Members of that group represent private, public, nonprofit and union and Taft-Hartley organizations that spend over $400 billion annually on health-care.
But he said that it’ll likely take years before employers have access to concrete data on the potential cost savings of covering those treatments.
Gremminger added that employers are “a little bit bit less focused” on what covering weight reduction drugs will mean for overall health-care spending 10 years from now. Their focus is on providing care to their current employees, a few of whom will find yourself leaving the corporate down the road.
Employers produce other questions, too, including about longer-term data on GLP-1s for weight reduction, and about patients stopping those drugs prematurely. It also is not clear to some employers whether patients need to stay on Wegovy for the remainder of their lives or in the event that they can eventually taper off of it, Gremminger said.
Obesity and heart disease are chronic diseases, which implies most patients can have to maintain taking Wegovy together with food plan and exercise to keep up the health advantages. Novo Nordisk said, “not unexpectedly,” data from their clinical trials shows that folks who took Wegovy regained weight once they went off the drug.
“This supports the idea that obesity is a chronic disease that requires long-term management, very similar to hypertension or high cholesterol, for which most patients remain on therapy long run in an effort to proceed to experience the advantages of their medications,” Novo Nordisk said in a press release.
But Gremminger said the usual of look after the long-term use of weight reduction drugs is “in flux.”
Considering the prices
Faced with the dramatic cost of covering Wegovy and similar drugs, the state of North Carolina is paring back.
State employees will not have insurance coverage for GLP-1s when used for weight reduction at first of next month. In January, the board of trustees for the state’s health plan voted to exclude those drugs from coverage. The plan will still cover GLP-1s for diabetes, similar to Novo Nordisk’s Ozempic, together with some older obesity drugs.
North Carolina’s treasurer and a GOP candidate for governor, Dale Folwell, told CNBC the expanded approval of Wegovy last week doesn’t change anything.
“We have never questioned the efficacy of the drug. We have at all times questioned what we’re having to pay for it,” Folwell said. “Whilst the scope of using this drug widens, it doesn’t change the price.”
North Carolina State Treasurer Dale Folwell attends the Republican Governors Association conference in Orlando, Florida, Nov. 16, 2022.
Phelan M. Ebenhack | AP
He said dropping weight reduction drugs wasn’t a call the board desired to make, but it surely did so since the state’s plan is “under financial siege” as a consequence of Wegovy. That treatment cost the state’s health plan nearly $87 million last yr, based on a state presentation from January. Overall, GLP-1 drugs for weight reduction cost the plan roughly $102 million in 2023.
An outdoor consultant projected a $1.5 billion loss by 2030 if the state plan continued to pay for those treatments. North Carolina also estimated that continuing to cover GLP-1s for weight reduction would double the premiums for all 482,000 lively employees and dependents on the plan, even those not taking the drugs.
Folwell said the state has been working with Novo Nordisk and Eli Lilly, the maker of comparable treatment Zepbound, to achieve an agreement on costs. But he noted that the businesses have rejected the state’s recommendations “at every turn.”
A spokesperson for Eli Lilly said the corporate is committed to working with health-care, government and industry partners “to assist individuals who may profit from Zepbound access it, but obstacles to that goal still exist.” The spokesperson added that policies around insurance have “not caught as much as science.”
Novo Nordisk said in a press release it urges Folwell and the state health plan to “put patients first” and reconsider the choice to drop weight reduction drug coverage.
Novo Nordisk believes “denying patients insurance coverage for necessary and effective FDA approved treatments for obesity is irresponsible,” based on an organization spokesperson, who said the corporate will proceed to have interaction with state health plan officials to deal with any potential cost concerns.
Each drugmakers have launched programs to assist patients, with or without business insurance coverage, afford their weight reduction treatments.
Novo Nordisk says its savings program may help patients without insurance coverage save as much as $500 per 28-day supply of Wegovy. The corporate also said roughly 80% of Wegovy patients within the U.S. with business coverage for the drug are paying $25 monthly or less.
List prices of weight reduction drugs before insurance
- Wegovy from Eli Lilly: $1,059.87 per monthly package
- Zepbound from Eli Lilly: $1,059.87 per monthly package
- Saxenda from Novo Nordisk: $1,349.02 per monthly package
Increased competition in the load loss drug market could force the 2 corporations to drive down the prices of their injectable treatments, said Ceci Connolly, CEO of the Alliance of Community Health Plans. The organization represents regional, community-based health plans that cover greater than 18 million Americans across the U.S.
Health plans can also be more open to covering convenient and potentially cheaper oral versions of the drugs, which several drugmakers are racing to develop. Those cheaper options, though, are likely still years away. That features cheaper generic versions of existing GLP-1s, together with treatments from rival drugmakers.
Coverage with cost controls
More employers will likely get thinking about coverage of Wegovy following its expanded approval, based on Julie Stich, vp of content at IFEBP.
However the plans that resolve to incorporate Wegovy once they next update their formularies will likely consider implementing certain requirements to regulate costs. Those requirements will look different for Wegovy’s two approved uses.
Most employers that cover GLP-1s for weight reduction already use cost controls, based on the October survey by IFEBP.
Nearly a 3rd of corporations said they used “step therapy,” which requires their members to try other lower-cost medications or technique of shedding pounds before using a GLP-1. Around 16% of employers used certain eligibility rules, similar to requiring employees to have a certain BMI, or body-mass index, to receive coverage.
Fiordaliso | Moment | Getty Images
Other employers are using financial requirements, similar to annual or lifetime spending caps for the treatments. For instance, the Mayo Clinic’s worker health plan added a lifetime coverage limit of $20,000 for weight reduction drug prescriptions filled after Jan. 1.
Meanwhile some players within the insurance industry try to seek out ways to assist health plans manage the prices of covering the treatments.
Last week, Cigna’s pharmacy advantages management unit said it’ll limit spending increases for GLP-1s to a maximum of 15% annually for employers and other health plans. Currently, a number of the company’s clients are seeing spending for those treatments rise 40% to 50% annually.
If more health-care corporations pursue similar efforts, their affiliated health plans could turn into more open to covering weight reduction drugs “knowing that their risk will probably be limited in that way,” Stich said.