Expert Commentary

The push for Medicare to cover weight-loss drugs: A research-based explainer

The largest health insurer in the United States does not cover weight-loss drugs. This piece explains the issue and summarizes some recent publications on the benefits and costs of drugs like semaglutide and tirzepatide.

Semaglutide weight-loss drugs
(Chemist4U on Flickr)

The largest U.S. insurer, Medicare, does not cover weight-loss drugs, making it tougher for older people to get access to promising new medications.

If you cover stories about drug costs in the U.S., it’s important to understand why Medicare’s Part D pharmacy program, which covers people aged 65 and older and people with certain disabilities, doesn’t cover weight-loss drugs today. It’s also important to consider what would happen if Medicare did start covering weight loss drugs. This explainer will give you a brief overview of the issues and then summarize some recent publications the benefits and costs of drugs like semaglutide and tirzepatide.

First, what are these new and newsy weight loss drugs?

Semaglutide is a medication used for both the treatment of type 2 diabetes and for long-term weight management in adults with obesity. It debuted in the United States in 2017 as an injectable diabetes drug called Ozempic, manufactured by Novo Nordisk. It’s part of a class of drugs that mimics the action of glucagon, a substance that the human body makes to aid digestion. 

Glucagon-like peptide-1 (GLP-1) drugs like semaglutide help prompt the body to release insulin. But they also cause a minor delay in the pace of digestion, helping people feel sated after eating.

That second effect turned Ozempic into a widely used weight-loss drug, even before the Food and Drug Administration (FDA) gave its okay for this use. Doctors in the United States can prescribe medicines for uses beyond those approved by the FDA. This is known as off-label use.

In writing about her own experience in using  the medicine to help her shed 40 pounds, Washington Post columnist Ruth Marcus in June noted that Novo Nordisk mentioned the potential for weight loss in its “ubiquitous cable ads (‘Oh-oh-oh, Ozempic!’)” 

The American Society of Health-System Pharmacists has reported shortages of semaglutide due to demand, leaving some people with diabetes struggling to find supply of the medicine.

Novo Nordisk won Food and Drug Administration (FDA) approval in 2021 to market semaglutide as an injectable weight loss drug under the name Wegovy, but with a different dosing regimen than Ozempic. Rival Eli Lilly first won FDA approval of its similar GLP-1 diabetes drug, tirzepatide, in the United States in 2022 and sells it under the brand name Mounjaro.

In November of 2023, Eli Lilly won FDA approval to sell tirzepatide as a weight-loss drug, soon-to-be marketed under the brand name Zepbound. The company said it will set a monthly list price for a month’s supply of the drug at $1,059.87, which the company described as 20% discount to the cost of rival Novo Nordisk’s Wegovy. Wegovy has a list price of $1,349.02, according to the Novo Nordisk website. 

Even when their insurance plans officially cover costs for weight loss drugs, consumers may face barriers in seeking that coverage for these drugs. Commercial health plans have in place prior authorization requirements to try to limit coverage of new weight-loss shots to those who qualify for these treatments. The Wegovy shot, for example, is intended for people whose weight reaches a certain benchmark for obesity or who are overweight and have a condition related to excess weight, such as diabetes, high blood pressure or high cholesterol.

State Medicaid programs, meanwhile, have taken approaches that vary by state. For example, the most populous U.S. state, California, provides some coverage to new weight-loss injections through its Medicaid program, but many others, including Texas, the No. 2 state in terms of population,  do not,  according to an online tool that Novo Nordisk created to help people check on coverage.    

Medicare does cover semaglutide for treatment of diabetes, and the insurer reported $3 billion in 2021 spending on the drug under Medicare Part D. Congress last year gave Medicare new tools that might help it try to lower the cost of semaglutide.

Medicare is in the midst of implementing new authority it gained through the Inflation Reduction Act (IRA) of 2022 to negotiate with companies about the cost of certain medicines.

This legislation gave Medicare, for the first time, tools to directly negotiate with pharmaceutical companies on the cost of some medicines. Congress tailored this program to spare drug makers from negotiations for the first few years they put new medicines on the market, allowing them to recoup investment in these products.

Why doesn’t Medicare cover weight-loss drugs?

Congress created the Medicare Part D pharmacy program in 2003 to address a gap in coverage that had existed since the creation of Medicare in 1965. The program long covered the costs of drugs administered by doctors and those given in hospitals, but not the kinds of medicines people took on their own, like Wegovy shots.

In 2003, there seemed to be good reasons to leave weight-loss drugs out of the benefit, write Inmaculada Hernandez of the University of California, San Diego, and coauthors in their September 2023 editorial in the Journal of General Internal Medicine, “Medicare Part D Coverage of Anti-obesity Medications: a Call for Forward-Looking Policy Reform.”

When members of Congress worked on the Part D benefit, the drugs available on the market were known to have limited effectiveness and unpleasant side effects. And those members of Congress were aware of how a drug combination called fen-phen, once touted as a weight-loss miracle medicine, turned out in rare cases to cause fatal heart valve damage. In 1997, American Home Products, which later became Wyeth, took its fen-phen product off the market.

But today GLP-1 drugs like semaglutide appear to offer significant benefits, with far less risk and milder side effects, write Hernandez and coauthors.

“Other than budget impact, it is hard to find a reason to justify the historical statutory exclusion of weight loss drugs from coverage other than the stigma of the condition itself,” they write.

What’s happening today that could lead Medicare to start covering weight loss drugs?

Novo Nordisk and Eli Lilly both have hired lobbyists to try to persuade lawmakers to reverse this stance, according to Senate records.  Pro tip: You can use the Senate’s lobbying disclosure database to track this and other issues. Type in the name of the company of interest and then read through the forms. 

Some members of Congress already have been trying for years to strike the Medicare Part D restriction on weight-loss drugs. Over the past decade, senators Tom Carper (D-DE) and Bill Cassidy, MD, (R-LA) have repeatedly introduced bills that would do that. They introduced the current version, the Treat and Reduce Obesity Act of 2023, in July. It has the support of 10 other Republican senators and seven Democratic ones, as of Dec. 19. The companion House measure has the support of 41 Democrats and 23 Republicans in that chamber, which has 435 seats.

The influential nonprofit Institute for Clinical and Economic Review conducts in-depth analyses of drugs and medical treatments in the United States. ICER last year recommended passage of a law allowing Medicare Part D to cover weight-loss medications. ICER also called for broader coverage of weight-loss medications in state Medicaid programs. Insurers, including Medicare, consider ICER’s analyses in deciding whether to cover treatments.

While offering these calls for broader coverage as part of a broad assessment of obesity management, ICER also urged companies to reduce the costs of weight-loss medicines.

Most people with obesity can’t achieve sustained weight loss through diet and exercise alone, said David Rind, ICER’s chief medical officer in an August 2022 statement. The development of newer obesity treatments represents the achievement of a long-standing goal of medical research, but prices of these new products must be reasonable to allow broad access to them, he noted.

After an extensive process of reviewing studies, engaging in public debate and processing feedback, ICER concluded that semaglutide for weight loss should have an annual cost of  $7,500 to $9,800, based on its potential benefits.

What does academic research say about the benefits and the potential costs of new obesity drugs?

Here are a couple of studies to consider when covering the ongoing story of weight-loss drug costs:

Medicare Part D Coverage of Antiobesity Medications — Challenges and Uncertainty Ahead
Khrysta Baig, Stacie B. Dusetzina, David D. Kim and Ashley A. Leech. New England Journal of Medicine, March 2023

In this Perspective piece, researchers at Vanderbilt University create a series of estimates about how much Medicare may have to spend annually on weight-loss drugs if the program eventually covers these drugs.

These include a high estimate — $268 billion — based on an extreme calculation, one reflecting the potential cost if virtually all people on Medicare who have obesity used semaglutide. In an announcement of the study on the Vanderbilt website, lead author Khrysta Baig described this as a “purely hypothetical scenario,” but one that “ underscores that at current prices, these medications cannot be the only way – or even the main way – we address obesity as a society.”

In a more conservative estimate, Bhaig and coauthors consider a case where only about 10% of those eligible for obesity treatment opted for semaglutide, which would result in $27 billion in new costs.

 (To put these numbers in context, consider that the federal government now spends about $145 billion a year on the entire Part D program.)

It’s likely that all people enrolled in Part D would have to pay higher monthly premiums if Medicare were to cover weight-loss injections, Baig and coauthors write.

Baig and coauthors note that the recent ICER review of weight-loss drugs focused on patients younger than the Medicare population. The balance of benefits and risks associated with weight-loss drugs may be less favorable for older people than the younger ones, making it necessary to study further how these drugs work for people aged 65 and older, they write. For example, research has shown older adults with a high blood sugar level called prediabetes are less likely to develop diabetes than younger adults with this condition.

SELECTing Treatments for Cardiovascular Disease — Obesity in the Spotlight
Amit Khera and Tiffany M. Powell-Wiley. New England Journal of Medicine, Dec. 14, 2023
Semaglutide and Cardiovascular Outcomes in Patients Without Diabetes
A Michael Lincoff, et. al. New England Journal of Medicine, Dec. 14, 2023.

An editorial accompanies the publication of a semaglutide study that drew a lot of coverage in the media. The Semaglutide and Cardiovascular Outcomes in Obesity without Diabetes (SELECT) study was a randomized controlled trial, conducted by Novo Nordisk, which looked at rates of cardiovascular events in people who already had known heart risk and were overweight, but not diabetic. Patients were randomly assigned to receive a once-weekly dose of semaglutide (Wegovy) or a placebo.

In the study, the authors report that of the 8,803 patients who took Wegovy in the trial, 569 (6.5%)  had a heart attack or another cardiovascular event, compared with 701 of the 8801 patients (8.0%) in the placebo group. The mean ​​duration of exposure to semaglutide or placebo in the study was 34.2 months.

The study also reports a mean 9.4% reduction in body weight among patients taking Wegovy, while those on placebo had a mean loss of 0.88%.

The findings suggest Wegovy may be a welcome new treatment option for many people who have coronary disease and are overweight, but are not diabetic, write Khera and Powell-Wiley in their editorial.  

But the duo, both of whom focus on disease prevention in their research, also call for more focus on the prevention and root causes of obesity and on the use of proven treatment approaches other than medication.

“Socioeconomic, environmental, and psychosocial factors contribute to incident obesity, and therefore equity-focused obesity prevention and treatment efforts must target multiple levels,” they write. “For instance, public policy targeting built environment features that limit healthy behaviors can be coupled with clinical care interventions that provide for social needs and access to treatments like semaglutide.”

Additional information:

The nonprofit KFF, formerly known as the Kaiser Family Foundation, has done recent reports looking at the potential for expanded coverage of semaglutide:

Medicaid Utilization and Spending on New Drugs Used for Weight Loss, Sept. 8, 2023

What Could New Anti-Obesity Drugs Mean for Medicare? May 18, 2023

And KFF held an Aug. 4 webinar, New Weight Loss Drugs Raise Issues of Coverage, Cost, Access and Equity, for which the recording is posted here.

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