Three out of ten working adults are obese, and another third are overweight. About 42% of adults over 60 are obese. It is the most common chronic condition according to the CDC. It beats out heart disease. Diabetes. Lung cancer. High blood pressure. All of them. And to top it off, it causes most of the chronic conditions that trail behind it in commonality. It’s not like this is news to anybody. Yet, very little aside from the dreaded “lifestyle changes” song and dance has successfully gotten that number to budge.
Enter GLP-1s
Glucagon-like peptide 1 is a hormone released in the digestive system when food is introduced, prompting insulin creation in the body. GLP-1s, and the recently created drugs meant to mimic it, are a no-brainer for those with diabetes: they help regulate blood sugar as insulin production increases. But if you know what else insulin might do, or if you heard any news at all in the health care space, you know what else they do—accelerate weight loss. That one thing a huge portion of Americans would love access to.
Studies show the average Ozempic user loses about 15-20% of his or her body weight, with the minimum sitting at 5%. Enough to lower the risk of all those aforementioned diseases and more, like heart failure, stroke, and kidney disease. And that’s not even mentioning its original purpose—help those with diabetes regulate blood sugar.
Too good to be true?
Nothing good comes for free, and GLP-1s are a picture-perfect example. There are two catches: to keep the weight off, users must continue to take the drug. Those who stop usually gain the weight back, particularly if they did not pair the drug with the lifestyle changes prescribed alongside.
But the cost is where many jump ship. Varying in price, they average $1,300 monthly without insurance in the US but are cheaper in other countries. And while the health benefits are quite a motivator, nobody has that much money just lying around for Zepbound and the like.
The deciding factor for many will probably be if health insurance covers Ozempic or Victoza or Saxenda. And the answer, for now, is “it depends.”
If this, then that
Because they are so pricey, health insurance companies won’t cover GLP-1s willy-nilly. And sometimes, even a prescription from a doctor isn’t enough. When the drug is prescribed for obesity alone, many insurance companies aren’t willing to foot the bill, and the patient is required to pay the full cost of the drug each month. Each plan is different, though: some might let it squeak by, while others put up a brick wall.
Those already living with diabetes or heart disease will have a better shot (no pun intended). But, even a prime candidate for Ozempic might have to jump through hoops. Step therapy might come in, where the patient might have to start with a less effective drug that isn’t quite what the doctor ordered and prove it won’t work before they are given Ozempic. Then once all other options are exhausted, the insurer might slap a prior authorization onto the medication, delaying its acquisition for months while the patient waits for the a-ok from their insurance company.
Or, some carriers are going as far as nixing the drugs from formularies completely, leaving those prescribed GLP-1s to come up with the full price or go without.
Do the insurance companies have an argument, though?
On a micro level, it is probably easy to see the bang for the buck when the carriers are willing to pay, but zooming out, these drugs have the power to wildly affect the financials of the insurance world.
One carrier—a huge carrier in Michigan—reported GLP-1s single-handedly doubled their drug costs in 2023. Double, by the way, is $400 million dollars: GLP-1s, regardless of the reason they were prescribed, cost this carrier $400 million in one year. Note that not every plan this carrier offered covered GLP-1s, and those that did came with strings attached.
Investing in the future
The devil’s advocate will say this, though: pay upfront now; avoid obesity-related care costs later. Preventing a problem, in theory, should be less expensive.
For this example, lets hop over to the Medicare world. For context, right now Medicare covers GLP-1s by the book: Ozempic and Mounjaro, when prescribed as FDA-approved for Type 2 diabetes, are covered. Wegovy, at the time of this writing, is approved by the FDA for treating heart disease, but so recently that Medicare formularies have yet to reflect those changes, leaving it uncovered.
A recent study done by the USC Schaeffer Center for Health Policy and Economics reported that if Medicare willingly covered GLP-1s for weight loss in addition to the ways mentioned above, it would save taxpayers $245 billion in a decade. Over that 10 years, 60% of that savings would come from Part A as fewer beneficiaries wind up in the hospital for maladies like heart attacks, strokes, mismanaged diabetes issues, and surgeries just to name a few. The remaining savings would come from negating the need to maintain those conditions. And that’s just Medicare, no mention of under 65.
Recent polls report that 85% of Americans, whether on Medicare or not, think GLP-1s should be covered under Medicare. But, a 2003 law bans any weight loss drug from appearing on a Medicare formulary near you.
What about Medicaid?
Michigan is an anomaly here: Medicaid beneficiaries can get covered for GLP-1s for diabetes and obesity with prior authorization. It is estimated over 633,000 beneficiaries in Michigan could qualify for this drug. In 2023, even with a manufacturer deal cutting drug costs by 50%, Michigan spent $390 million on GLP-1s.
What happens if GLP-1s aren’t on the table?
Even if someone is prescribed it, and the carrier covers it, there’s also the simple fact that supply struggles to meet demand. Wegovy and Ozempic are currently on the FDA’s drug shortage list; their manufacturers, Novo Nordisk and Eli Lilly, have multi-faceted plans to increase production.
Because of a law allowing compounding pharmacies to make equivalent drugs at a fraction of the cost when shortages arise, they could provide a viable option. But these copycats aren’t as well regulated, and once production ramps back up, compounding pharmacies have to stop production.
As it stands now, bariatric surgery is an often-mentioned alternative to GLP-1s. But only those who are severely overweight and with other comorbidities are approved. Obviously, it is more invasive, more likely cause to complications, and can be costly, too—but it does work. Usually, more weight is lost with surgery than, say, Wegovy: 25-35% of body weight is lost with surgery, and 15-20% is lost with GLP-1s.
What’s the future look like here?
It is hard to predict. While improbable, individual GLP-1s could get negotiated down in Medicare spaces with the Inflation Reduction Act if they are the only one approved in their respective space. Manufacturers could pull a Novo Nordisk and seek FDA approval for more diseases, then play the waiting game as more people get diagnosed with fatal diseases. Demand might stay high for so long that compounding pharmacies dominate the market. Deals could be struck, laws could be enacted…but what probably won’t change is the demand for these drugs in the first place.
Action Benefits : Mar 11, 2024
Action Benefits