Weight loss drug coverage would cost Medicare at least $3.1 billion annually
Cost to Medicare over a decade is likely to be in the low to middle tens of billions of dollars, Health Affairs says.
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Expanding Medicare coverage of anti-obesity medicines could increase annual spending by $3.1 to $6.1 billion, according to a new Health Affairs study.
The introduction of highly effective anti-obesity drugs, such as Wegovy, has prompted debate over Medicare Part D's current prohibition of such products, the report said.
Medicare Part D currently does not cover drugs used to treat weight loss unless it is prescribed for other reasons, such as reducing the risk of stroke or heart attack. The FDA recently approved Wegovy for this use, which could lead to Medicare Part D plans covering it for those purposes.
Without insurance, the price tag for medications such as Ozempic, Wegovy and Zepbound is over $1,000 per month, according to GoodRx Health.
Legislative proposals to expand Medicare coverage include the Treat and Reduce Obesity Act of 2023.
In June, the House Ways & Means Committee passed legislation to allow Medicare to cover these drugs for adults 65 and older. The legislation is currently being considered by the House of Representatives.
The bill would also allow for coverage if provided by not only a primary care provider, but if prescribed by a physician assistant, nurse practitioner or approved counseling program provider.
Obesity-indicated GLP-1s are inconsistently covered by private insurers, the report said.
WHY THIS MATTERS
The Health Affairs study asked the question: If Medicare is allowed to cover anti-obesity drugs for the purpose of obesity alone, what would be the cost?
The study was done by Benedic Ippolito, who is affiliated with the American Enterprise Institute and Joseph F. Levy of Johns Hopkins University.
The authors forecast that if anti-obesity drugs were covered in 2025, and if 5% percent of newly eligible patients were prescribed one, annual Part D costs would increase by $3.1 billion annually. If the percentage of patients was doubled to 10%, the price tag could rise by $6.1 billion.
Given that more than 70% of U.S. adults had obesity or were overweight as of 2021, the potential market for these products is large, Health Affairs said.
THE LARGER TREND
Glucagon-like peptide-1 receptor agonists (GLP-1s) have been used to treat diabetes and obesity. Beyond their effects on diabetes, these products have been shown to reduce body weight by more than 15% and improve other clinical outcomes, such as reducing the risk for major adverse cardiovascular events and reducing symptoms of heart failure, Health Affairs said.
Wegovy and Zepbound are now approved for weight management in patients with either a body mass index (BMI) of at least 27 and at least one obesity-related comorbidity, such as high blood pressure and high cholesterol, according to Health Affairs.
The Congressional Budget Office in 2023 said the budgetary effect of passage of the Treat and Reduce Obesity Act of 2023 would depend on the prices of those drugs, as well as any effect of that use on other healthcare spending.
In CBO's assessment, Medicare's coverage of anti-obesity medications at their current prices (accounting for rebates and discounts) would increase overall federal spending. CBO expects that the drug's net cost to the Medicare program would be significant over the next 10 years.
CBO said it expects semaglutide to be selected for price negotiation by the Secretary of Health and Human Services within the next few years, which would lower its price.
ON THE RECORD
"Evaluating the merits of expanding Medicare coverage to include these products requires weighing cost estimates against clinical and nonclinical gains experienced by patients. Although doing so was beyond the scope of our article, some of our findings affect both," the authors said.
Email the writer: SMorse@himss.org
