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  • Writer's pictureSAKS Market Access Team

Paying for Obesity: An Evolving Landscape


It’s not news that the United States has an obesity problem. According to the Centers for Disease Control and Prevention, obesity in the US affects over 100 million adults and almost 15 million children, and accounts for approximately $147 billion in annual health costs. Although diet and exercise are at the core of weight loss strategies, many people benefit from pharmaceutical treatments. Historically, weight loss medications have been associated with modest success and some significant safety concerns, however, newer medications are the first truly effective obesity treatments.


GLP-1 agonists are in a class of drugs designed to mimic a hormone that regulates appetite, stimulates the release of insulin, and helps slow the passage of food through the gut. The FDA approved Novo Nordisk’s Ozempic for Type 2 diabetes in 2017 and many patients noticed weight loss as a side effect. The company launched Saxenda in 2020 and Wegovy (with the same active ingredient as Ozempic) in 2021, which are approved for obesity. And Eli Lilly’s Mounjaro is expected to be approved for obesity in the near future. Each of these medications cost about $1,000 or more per month.


As successful as these drugs for weight loss are, they are raising important questions about equity and who can afford them. Historically, health plans have covered medical treatments for diseases such as diabetes, but not obesity. Dr. Peminda Cabandugama, an endocrinologist at the Cleveland Clinic commented recently to NBC News that obesity “ is considered a cosmetic issue as opposed to a chronic disease.” Due to the perception of obesity as a lifestyle issue and safety issues related to past weight-loss drugs (see phen-fen in the 1990s and the cardiovascular issues caused), most commercial and federal health plans do not cover weight-loss medications. Another barrier is a law from 2003 that prohibits Medicare from covering weight loss medications.


A recent article in Scientific American noted that things could be changing based on new clinical data showing that Ozempic and Wegovy may reduce the risk of heart attacks and strokes by as much as 20%. Full trial results should be available in November 2023. Shauna Levy, medical director of Tulane University’s Bariatric and Weight Loss Center, hopes that the research showing the overall health benefits of weight-loss will prompt insurance companies to categorize obesity as necessary rather than cosmetic. Industry is watching Medicare closely because coverage of obesity medications would make them available to a large population, and commercial health plans typically follow Medicare’s lead. In July of 2023, there was an effort made to reintroduce a bill that would reauthorize Medicare coverage of weight-loss medications. These new clinical data results could help reignite legislative action.


A KFF survey found that almost half of adults were interested in taking an effective and safe weight loss drug. But their interest dropped to 16% if their insurance did not cover the treatment. Health plans are hesitant to cover these weight-loss medications because patients typically need to take the drugs indefinitely to keep weight off, and this can lead to increased costs and higher premiums.


As a driver of overall healthcare expenditures, obesity is and will remain a significant health concern for our country. Thanks to the innovation coming from academic and pharmaceutical manufacturers’ labs, we have novel therapies that are promising, expensive, and generally not covered by health insurance. New data on the cardiovascular benefits of GLP-1 agonists along with potential changes to Medicare policy might alter the obesity landscape in the near future. We’ll be watching closely, as we stay committed to Better Healthcare Tomorrow™.

 

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