The National Alliance of Healthcare Purchaser Coalitions, which represents employer and union health-care coalitions that spend over $400 billion a year covering more than 45 million Americans, expects to issue best practice guidance by the end of the year on covering Wegovy and other weight-loss drugs, President and CEO Michael Thompson said in an interview.
Whether and how to cover Wegovy and other weight-loss drugs “is one of the more complex issues for people who run benefits for major companies or any company because of the potential exposure from a cost standpoint, and just the huge prevalence of obesity within their populations,” Thompson said. The Novo Nordisk study “is a new development that I think has to be put into the mix.”
“This is a topic that we have been dealing with for decades, and not very successfully,” Thompson said. “It’s clear that the medications might help, but there are some downsides on this, too,” he said. “Are we looking to put people on lifetime medication? Are we looking to spend this type of money for something that might have a benefit years to come?” he said.
Bloomberg Intelligence estimates weight-loss drugs cost $17,500 in 2023 for 32 weeks of coverage.
Pressure on Employers
The study found that obese or overweight people who had a history of heart problems were 20% less likely to suffer a cardiovascular event when taking Wegovy than those who took a placebo.
Those findings likely will increase pressure on employers, health insurers, and the government to cover weight-loss drugs, according to Tracy Zvenyach, director of policy strategy and alliances for the Tampa, Fla.-based Obesity Action Coalition. “It will take some time,” she said. “We see all of this as very positive, moving in the direction of better access and coverage for obesity treatment, which will improve health and well-being.”
Full, peer-reviewed results of the trial are expected later this year.
Novo Nordisk’s findings of cardiovascular and other health benefits “will strengthen the case for covering the GLP-1 drugs,” Jeff Levin-Scherz, population health leader for management consulting company WTW, said in an interview. He was referring to glucagon-like peptide 1 agonists, drugs that help patients manage blood sugar levels and reduce hunger and eating, potentially leading to weight loss.
A July report from pharmacy benefit manager Prime Therapeutics found that many people who started treatment with such drugs were not on them a year later, however. “This might well be due to trouble getting the drug refilled through insurance, as opposed to patient adherence to the medicines,” Levin-Scherz said. The report also showed that the drugs didn’t save money in the first year.
More than 60% of the approximately 400 employer plans WTW consults with for pharmacy benefits cover obesity medications such as Wegovy, Levin-Scherz said. The plans cover 4.7 million members and spend more than $5.5 billion a year on drug benefits.
Costs could rise more than $70 per member per month if half of those with a body mass index under 30 seek treatment, up from current outpatient pharmacy costs of $120 to $150 per month, Levin-Scherz said. A BMI of 25 or higher is considered overweight; 30 and up is considered obese. Most employers that cover the drug currently limit it to people with a body mass index of at least 30.
Many employers might not cover the drugs because of the cost, Levin-Scherz said. It’s possible that more employers will adopt prior authorization requirements, and limit coverage to those who will benefit most, such as people who are obese and have heart disease, he said.
The University of Michigan’s 120,000-member plan spent nearly $9 million covering Wegovy and Saxenda, Novo Nordisk’s other weight loss drug, from July 2022 through June 2023, Brian Vasher, the university’s assistant vice president for benefits and well-being programs, said in an interview. The plan’s total medical spending during that time was $623 million, in addition to total prescription drug spending of $182 million, he said.
A panel of physicians and pharmacists is studying the Novo Nordisk report to determine whether the university should expand coverage, Vasher said. “This may be changing the criteria for weight-loss medications,” he said.
The university added a six-month step therapy requirement March 1 under which the plan provides beneficiaries assistance with diet and behavior changes. The plan covers less expensive weight-loss drugs first, before stepping up to Wegovy and Saxenda, Vasher said. Copayments were raised from $20 to $45 per month. If step therapy doesn’t work, “then we move to prescribing the GLP-1s,” he said.
Adding Requirements
Some employer health plans that had been covering weight-loss drugs recently added extra requirements before Novo Nordisk’s Aug. 8 announcement.
The state of Connecticut has started a pilot program under which anti-obesity drugs can be covered if employees obtain them through health technology firm Intellihealth, state Comptroller Sean Scanlon said in an email. The state’s costs for the drugs has been increasing 50% per year since 2020 and has been on track to cost $30 million a year by the end of 2023, he said.
“We expect this program to yield reduced medical costs, an overall reduction in the cost of our health plan and most importantly improved outcomes and quality of life for our plan members,” he said. “Should the pilot program produce the expected results, we will examine a longer-term relationship and other opportunities to scale up.”
More Denials
Jason Andrade, employee benefits practice leader for the Mahoney Group, a nationwide insurance broker based in Mesa, Ariz., said his firm is seeing an uptick in cost and coverage of weight-loss medications. “We’re seeing a lot of denials as well,” he said.
“A lot of folks who are trying to get weight-loss medications but the plan doesn’t cover weight loss, we’re seeing a lot of that,” Andrade said.
A potential challenge for employers in deciding whether to cover weight-loss drugs is whether the drug would be effective if the patient stops taking it, Julie Stich, vice president of content for the International Foundation of Employee Benefit Plans, said in an interview. Employers are trying to figure out, “Does this mean if I cover this now will I need to cover it as a maintenance type of drug for a long period of time for these individuals, and that just adds to the cost,” she said.
Competition in the market for weight-loss drugs is needed to drive down the cost, Duane Wright, senior research analyst with Bloomberg Intelligence, said in an interview.
“While the study results are good news, the cost is ultimately probably what’s going to drive the decision-making here,” Wright said.
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