GLP-1s - What We Know Right Now, For Now (Part 1)

Despite major pharmaceutical companies and organizations (e.g. American Medical Association) lobbying for insurance companies, government programs, and employers to cover weight loss drugs, there are still concerns that coverage of medications such as glucagon-like peptide-1s (GLP-1s) for weight loss by Medicare and commercial plan sponsors could ultimately lead to higher costs for beneficiaries through higher premiums and/or higher taxes ^1,2. Expanded FDA-labeled indications such as MACE – major adverse cardiac events – for Wegovy and proposed bills such as the Treat and Reduce Obesity Act (TROA) are just two examples of the increasing pressure on Congress to lift the current Medicare restriction on weight loss agent coverage³.

The Rising Costs of Weight Loss Drugs: A Growing Challenge for U.S. Healthcare

A 2023 analysis found that high costs are a major barrier to a plan sponsor’s decision to cover weight loss drugs, specifically GLP-1s⁴. For every 1% weight loss achieved, it costs $985 with Mounjaro (tirzepatide) and $1,845 for Wegovy (semaglutide)⁴.

• If just 1% of the U.S population used semaglutide, annual costs incurred by Medicare would hit up to $2.6 billion⁴.
• With the current obesity rate for U.S. adults over the age of 65 around 40% and concerns that up to 1 in 2 Americans will be considered obese by 2030, the cost associated with treating obesity and related comorbidities such as heart disease and diabetes could escalate healthcare costs overall^4,5.

A 2021 study demonstrated that, when compared to patients with “normal weight”, patients considered obese incurred $2,505 more in annual healthcare expenses⁶. This increased spend was comprised of costs associated with the inpatient and outpatient settings as well as for prescription medications [not including anti-obesity medications (AOMs)]⁶.

• Researchers found that medical spending related to obesity tended to be higher for adults covered by public health insurance programs (Medicare and Medicaid) ($2,868/year) than for those covered by private health insurance (Commercial) ($2,058/year)⁶.
• Patients who are considered obese are more likely to suffer chronic health conditions and functional limitations (such as mobility) leading to higher utilization⁶.

Will Insurers Follow the Pressure to Cover Weight Loss Drugs?

Large healthcare associations like the AMA (American Medical Association) are urging insurance companies, employers, and government programs to cover weight loss agents. Medicare is currently prohibited by law from covering weight loss agents and coverage of these drugs by commercial plan sponsors is historically hit or miss (further breakdown of coverage here).

In a recent announcement, CMS stated that Medicare Part D plans can cover AOMs if they are indicated for the treatment of medical conditions other than obesity⁷. Only Wegovy has received FDA approval for a medical condition in addition to chronic weight management⁷.

• Wegovy’s MACE (major adverse cardiovascular events) indication could further pressure insurers to provide coverage for the anti-obesity medication (AOM) since the medical benefit outside of weight loss has been established^7,8.
• Many employers and payers are believed to, in time, offer coverage for Wegovy’s MACE indication alone— if they don’t provide coverage already⁷.
• A Budget Impact Analysis (below) spanning from 2023 to 2027 estimated the financial impact of Wegovy used in the MACE patient demographic⁷.
• Additionally, there are ongoing cardiovascular outcome trials for Zepbound (tirzepatide) and CagriSema (semaglutide + cagrilintide). If either are approved for MACE, this would further expand available products in the market for this indication⁷.

Some providers are pushing back on covering anti-obesity medications (AOMs). Those opposed to expanded AOM coverage cite the need for environmental factors (e.g. processed foods and poor lifestyle habits) to be addressed and that looking to weight loss agents as short-term solutions to address the obesity problem is not sufficient enough².

The opposition also argues that commercial and/or Medicare coverage of weight loss agents could ultimately lead to higher costs to all beneficiaries through higher premiums or higher taxes².

The Institute for Clinical and Economic Review (ICER) found that covering Wegovy at its current price for just 0.1% of the eligible population would force plan sponsors and payers to allocate the necessary funds to absorb the increased cost and potentially results in increased premiums².

Lobbying for Expanded Medicare Coverage of Weight Loss Drugs Intensifies

Large pharmaceutical companies like Novo Nordisk and Eli Lilly are increasingly putting pressure on Congress to allow expanded coverage of weight loss drugs. Both companies have spent large sums of money through lobbying to urge Congress to change the laws surrounding Medicare’s coverage of weight loss medications¹.

Other strategies to influence the laws around expanded coverage include a reintroduced bill from Democratic Senator Tom Carper called the Treat and Reduce Obesity Act (TROA)³.

• The proposed bill seeks to lift statutes prohibiting Medicare coverage of weight loss drugs.
• The substantial budget impact of Medicare covering AOMs is a major concern for those who oppose covering these medications.
• The bill is currently being deliberated in the House of Representatives⁸.  
• It is estimated that the prevalence of obesity and severe obesity in the U.S. population 60 years of age and older is 41.5% and 6.1%, respectively^{7, 10}
• A study estimates, based on claims data for phentermine, topiramate, and semaglutide, that 21% of people with obesity would be included in the Medicare program^10,11.
• If 10% of those beneficiaries go on to receive Wegovy, the study estimated that total annual costs would reach $13.6 billion, which equates to about 9.35% of total Medicare spending¹⁰.
• When this is extrapolated globally, the forecast has a vast range. The infographic below highlights what potential spend will be associated with obesity over the next 4 years⁹.

‍Resources

1. Wingrove, Patrick. Obesity drug data could boost companies case for US coverage. Reuters. Available from: https://www.reuters.com/business/healthcare-pharmaceuticals/obesity-drug-data-could-boost-companies-case-us-coverage-analysts-2023-08-10/. Published Aug 10, 2023.  

2. Trang, B and Chen, E. AMA urges coverage of obesity treatments as payers balk at costs. STAT. Available from: https://www.statnews.com/2023/11/13/weight-loss-drugs-wegovy-zepbound-ama-insurers/. Published November 13, 2023.  

3. 118^th Congress. H.R.4818 Treat and Reduce Obesity Act of 2023. Available from: https://www.congress.gov/bill/118th-congress/house-bill/4818. Published Jul 7, 2023.  

4. Buntz, Brian. ‘Can payers afford the new era of GLP-1 drugs? Or can they afford not to?’. Available from: https://www.drugdiscoverytrends.com/can-payers-afford-the-new-era-of-glp-1-drugs-or-c an-they-afford-not-to/. Published Mar 29, 2024.  

5. Nguyen T, Wong E, Cope R. Evaluating the Efficacy and Pharmacoeconomics of Semaglutide and Tirzepatide in the Setting of Obesity. Am J Ther. 2023 Jul-Aug 01;30(4):e347-e352. doi: 10.1097/MJT.0000000000001643. PMID: 37449929.  

6. Cawley J, Biener A, Meyerhoefer C, Ding Y, Zvenyach T, Smolarz BG, Ramasamy A. Direct medical costs of obesity in the United States and the most populous states. J Manag Care Spec Pharm. 2021 Mar;27(3):354-366. doi: 10.18553/jmcp.2021.20410. Epub 2021 Jan 20. PMID: 33470881; PMCID: PMC10394178.  

7. IPD Analytics. “Wegovy for MACE Risk Reduction in Patients Without Diabetes: Budget Impact Model”. Rx Brief: Endocrinology. GLP-1 Drug Shortages and Compounding. Published July, 2024.  

8. Lovelace Jr, B. House committee passes bill that would allow Medicare to cover weight loss drugs. Available from: https://www.nbcnews.com/health/health-news/house-committee-passes-bill-allow-medicare-cover-weight-loss-drugs-rcna159248. Published Jun 27, 2024.  

9. Gores, M and Rickwood, S. 2024: The obesity market’s inflection point? IQVIA. Available from: https://www.iqvia.com/blogs/2024/02/2024-the-obesity-markets-inflection-point. Published Feb 22, 2024.  

10. Stierman B, et al. National Health and Nutrition Examination Survey 2017–March 2020 prepandemic data files—development of files and prevalence estimates for selected health outcomes. National Health Statistics Reports; no 158. National Center for Health Statistics; 2021. doi:10.15620/cdc:106273

11. Baig K, et al. Medicare Part D coverage of antiobesity medications – challenges and uncertainty ahead. N Engl J Med. 2023;388(11):961-963. doi:10.1056/NEJMp2300516