Insurers can’t avoid covering weight-loss drugs forever


New data illustrating the health benefits of Novo Nordisk’s obesity drug Wegovy puts insurers in the increasingly uncomfortable position of justifying their refusal to pay for the new class of injectable weight-loss treatments known as GLP1 drugs. Shares of Novo Nordisk and its rival Eli Lilly rose on the news, which increased investor confidence that insurers will eventually be forced to cover these drugs for a wider range of people.

As a society, we seem stuck in an old narrative: that Wegovy and its rivals are merely “lifestyle products” that offer a cosmetic, but not societal benefit. Today’s data underscores the need to update that story.

The highly anticipated trial, which enrolled roughly 17,600 people with a history of cardiovascular disease, found that people who took Wegovy had 20% fewer heart attacks and strokes. It’s the first time a study has demonstrated those types of benefits in a population without diabetes.

That’s not surprising to doctors who specialize in obesity, says Shauna Levy, the medical director of Tulane School of Medicine’s Bariatric and Weight Loss Center. Physicians prescribing GLP1s like Wegovy or Eli Lilly’s Mounjaro, a diabetes drug currently taken off-label for weight loss, are already seeing health benefits beyond just the pounds shed, such as improvement in patients’ blood pressure and cholesterol, she says.

But having concrete evidence of fewer heart attacks and strokes should help with the uphill battle she faces when trying to get insurers to pay for Wegovy. “Data like this makes it even more challenging for employers and hopefully the government to ignore the benefits of these drugs,” she says.

While private insurers will cover GLP1 drugs for people with diabetes, they have been slower to pay for their use in people with obesity. A 2022 survey found that just 22% of employers in the U.S. pay for weight-loss medicines. Some 45%, meanwhile, cover bariatric surgery, for which the longer term health benefits are well established.

And several media reports suggest that some employers that initially agreed to cover Wegovy are reversing course, while others are greatly narrowing the criteria for eligibility.

Their concerns over costs are valid. The drugs, which must be taken continuously in order to keep the pounds off, are expensive. Meanwhile, those employers fear they won’t be the beneficiaries of long-term savings if people move on to another job.

State Medicaid coverage, meanwhile, is spotty at best. And Congress has yet to open the door for Medicare to pay for any obesity medicines. The fear, of course, is that the large percentage of people on public insurance who would qualify for the drugs would be budget-busting.

Today’s data offers compelling reason to reconsider that stance. Notably, the average age of participants in Novo Nordisk’s cardiovascular outcomes study was 62, or just a few years shy of Medicare eligibility. That bolsters the argument that the government could indeed reap the health-care benefits of covering these drugs for older people.

One thing that would help the overall discussion about access is a better accounting of the potential costs and savings of these drugs. Estimates vary wildly based on the way they are calculated. For example, one analysis found that, depending on private insurers’ coverage, Medicare would save between $175 billion and $245 billion in the first 10 years of covering weight-loss drugs. “Given these findings, policymakers should consider the societal benefits of lifting the moratorium on Medicare coverage for weight-loss drugs and enable Medicare to work with manufacturers to create reimbursement solutions that provide broad access to new treatments,” the authors noted.

But another analysis was much less rosy. Covering these drugs could cost Medicare $268 billion a year – that’s if every eligible person were to take them. “The burden of obesity and obesity-related conditions is unquestionably high, but the value of Medicare coverage of antiobesity medications remains unclear,” the authors concluded.

The true costs and benefits are likely somewhere between those extremes. A more nuanced analysis – based on emerging clinical and real-world data – could help guide both public and private insurers to map out the best approach for coverage.

These drugs work. People lose weight – enough of it to really matter for their health. We need to have more honest conversations about these medicines’ value to society.

(This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.)

Lisa Jarvis is a Bloomberg Opinion columnist covering biotech, health care and the pharmaceutical industry.



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