A new generation of weight-loss drugs presents an opportunity to improve the health of millions of Americans, but also a challenge for the nation’s healthcare system, which must figure out how to get it.
The demand for these drugs has proven to be extraordinary. Novo Nordisk said last week that it would temporarily stop advertising Wegobee, a diabetes drug approved for weight loss in 2021, to prevent shortages due to high demand. Its sister drug, Ozempic, which contains the same active ingredient, is not approved for weight loss, but is in high demand for off-label use. And the market is expected to continue to grow. Eli Lilly has asked the FDA to approve another diabetes drug, Mounjaro, for use in weight loss.
Public health opportunities may also be important. She is one in three US adults, or more than 85 million, is considered obese. In addition, he is considered one in three overweight. Obesity is a risk factor for a variety of chronic health conditions, including high blood pressure, heart disease, and diabetes, which are among the most common causes of death in the United States, and these conditions are costly to treat. According to the Institute for Clinical Economics Review (ICER), obesity-related health care costs exceed $250 billion annually.
If these drugs help you lose weight, and if there are early indications that they are very effective, they should also help you avoid these chronic diseases. And indeed, preliminary research results suggest Wegovy may improve heart health in patients and help avoid costly medical problems down the road. This new treatment also has the advantage of being relatively easy to use compared to other obesity treatments such as gastric bypass surgery. You can also get an injection once a week instead of using a knife. (However, unlike a one-time surgery, these injections may need to be done permanently.)
America’s health care system has seen blockbuster drugs, treatments that have generated huge profits for pharmaceutical companies. But this is a special case. That is, drugs that are intended to be taken long-term to treat conditions that affect more than half of the U.S. population.
Not everyone who is obese or overweight is unhealthy or interested in losing weight, so doctors may not think the drug is right for everyone. Still, the number of potential targets is large enough that even if the majority never received a prescription, weight-loss drugs would quickly become one of the most popular drugs in the United States and the most expensive for insurance companies. insurance may be paid. ICER estimates that even if only 0.1% of Wegovy’s potential patient population received a prescription, the cost would be enough to drive up premiums for private plans.
But the U.S. health care system was not built to make very expensive drugs available to its vast population, even those with long-term promise. And that raises the question of whether interested patients who might benefit would be able to afford them.
Just because you have health insurance doesn’t mean your plan will cover all over-the-counter medicines. Insurance companies should decide whether to cover different drugs based on both clinical benefit and cost, what limits should be placed on that coverage, and how much a patient should pay out-of-pocket for that drug. and so on. So far, drugs such as Wegoby and Ozempic are usually excluded from insurance coverage. Medicare and Medicaid do not usually include weight loss drugs. Employers’ health insurance, which covers half the country’s population, also typically does not cover weight-loss drugs and requires patients and doctors to provide documentation to justify prescribing Wegoby or Ozempic.
In other words, we have a new treatment to address one of the country’s most pressing health crises, yet our health care system seems to actively discourage its use. What do you give?
Why health insurance companies typically don’t cover Wegovy and Ozempic today
Wegovy, Ozempic and their peers aim to usher in a new era in obesity treatment. Historically, overweight or obesity has been characterized primarily as a personal failure and the result of inappropriate lifestyle choices. But most of the medical community already treats weight as a biological problem and behavior as just one factor. The public is gradually approaching the same view.
Seeing significant weight loss with once-weekly injections is another step toward treating obesity, as well as other ailments, to improve health and prevent serious and costly conditions in the future. It is possible. According to ICER, a patient in a clinical trial evaluating Wegovy as a weight-loss treatment found he lost about 15% more weight after one year compared to patients in the placebo group.
Weight loss of this amount may provide significant health benefits. According to the Centers for Disease Control and Prevention, even a 5-10% weight loss can lead to improvements in blood pressure, cholesterol and blood sugar. A small Mayo Clinic study estimated that after taking Wegovy for a year, patients were less likely to have a heart attack or stroke.
These improvements should help people live longer and save money on the healthcare system. According to the Peterson-KFF Health System Tracker, annual medical costs for people with large employer health insurance who are diagnosed with obesity are significantly higher than those without, and will be about $12,600 to $4,700.
However, these benefits can only be realized for most people if their insurance company covers the drug. Wegovy’s current list price is $800 to $1,000 per month or $10,000 to $12,000 per year.
Even in the era of the Affordable Care Act, insurance companies still have a great deal of discretion in deciding which prescription drugs to cover. According to The Wall Street Journal, less than half of large companies (those with more than 5,000 employees) have health insurance covering weight-loss drugs. For smaller stores, the percentage is even lower, less than 20%. Medicaid and Medicare together cover about 35 percent of the population, but obese patients are also not covered, even though they are more likely to be covered by these programs.
Employer health insurance plans are currently resisting the high demand for these treatments. Experts say they expect this attitude to persist until prices drop or cheaper alternatives hit the market.
“Until that happens, coverage offered through employer health insurance plans may be limited to individuals who are in dire need of these drugs,” Human Resources Management Association expert Jennifer Chan told me. told to Means of losing weight. ”
David Dillon, health actuary at Lewis & Ellis, explained how this would work in practice. When a doctor prescribes Wegovy for her weight loss and a patient submits a claim for it, the insurance company tells the doctor, from annual checkups and blood tests, that the person is at risk of developing diabetes. You may be asked for information that indicates The Wall Street Journal reported that patients had already received such requests from health insurance companies, and that some had their claims denied.
Most health insurance companies cover gastric bypass surgery, but because it’s a one-time procedure rather than a long-term medication regimen, it could theoretically be more cost-effective. But it also requires patients and doctors to meet a long list of criteria before covering that version of obesity treatment.
Medicare, on the other hand, is actually prohibited by law from covering weight loss drugs under the law passed in 2003 that created prescription drug benefits. Bills to remove this exemption have been proposed in the past, and drug companies are again urging lawmakers to remove the exemption as these new anti-obesity drugs hit the market. Targeting these medicines can cost the program significantly (up to $27 billion annually), but it can also provide long-term cost savings.
Why employer health plans don’t invest in people’s long-term health
This is partly why the US health care system’s reliance on employer-provided insurance doesn’t help us. Most working-age adults are insured by the company that employs them. The company’s health insurance priority is to keep costs as low as possible in the short term to avoid premium increases.
“We have a much more mobile workforce today. Not many people stay in the same position for 20 to 30 years,” Chan said. “Maybe these long-term benefits are not being considered because they are thinking about short-term, immediate results, not long-term.”
That’s because employment is often short-term in modern economies. The average tenure in the US these days is about four years.
Larry Levitt, executive vice president of the health policy think tank KFF, said: “People change jobs and health insurers so frequently that they prepay for medicines that may provide future health benefits or cost savings. There are not always incentives,” he said. .
To make this problem even worse, the price of these weight loss pills now seems too high compared to their value, even if the value is real. Based on the ICER evaluation of Wegovy’s long-term health benefits, the drug offers an equivalent value of $7,500 to $9,800 per year. But the drug’s list price is now over $17,000, and even after factoring in the rebates that drug companies pay on health insurance, the average annual cost is still higher than expected (about $13,000).
Experts are interested in whether the federal government should classify weight-loss drugs as prophylactics in the future. Medical plans are required to cover specific preventive services recommended by a panel of experts under the ACA. (That is, if the provision of preventative medicines survives ongoing legal challenges.) This would make medicines more accessible to patients and cost much more to insurers.
That is the medical system that the United States has built. Pharmaceutical companies that have patented new treatments are given exclusivity and wide discretion to set the price of their products. Insurers have some leverage in bargaining to lower these prices, but they will also resort to limiting coverage to keep costs down. Also, employers’ plans can only cover a given patient for a few years, so they’re less concerned about the potential long-term savings of avoiding chronic health problems, and lower short-term costs. There is a motive to hold back.
This is a situation caused by the unique structure of US healthcare. A breakthrough weight-loss treatment would also pose a cost challenge to other developed countries where obesity rates have risen over the years. However, these countries are not facing the same cost pressures.
For example, in the UK, a month’s worth of Wegovy costs around $100 instead of over $1,000. This reflects the National Health Service’s assessment of the value Wegovy provides. Novo Nordisk also recognizes that a more laissez-faire market could encourage tougher bargains in the US, alleviating the need to try to extract as much revenue as possible from the UK. And the UK has adopted a standard of prescribing for all patients based on its assessment, and the drug is recommended for certain health conditions such as high blood pressure, diabetes or pre-diabetes, heart disease and even sleep apnea. It is given preferentially to people with the condition.
That will put some restrictions on the use of weight-loss drugs, and British experts expect some dissatisfaction among patients as a result. However, the country makes a holistic assessment of the value these medicines can provide and sets costs and access accordingly.
In the United States, on the other hand, the availability of what comes next, such as Wegovy and Ozempic, is at the whim of employer health insurance, with little regard for how it affects long-term health. Is not …