Nine state Medicaid programs currently cover Wegovy, Novo Nordisk's high-priced weight loss drug, Bloomberg Law reported July 26.
California, Connecticut, Delaware, Michigan, Minnesota, Pennsylvania, Rhode Island, Virginia and Wisconsin's Medicaid programs have Wegovy and similar drugs on preferred drug lists, Bloomberg reported.
Negotiated discounts with manufacturers through the Medicaid Drug Rebate Program allow states to receive the drugs at lower costs than private payers, Antonio Ciaccia, CEO of drug pricing think tank 46brooklyn, told Bloomberg Law. These rebates allow states to receive drugs for 20 percent less than private insurers, and states can negotiate supplemental rebates on top of this, Mr. Ciaccia said.
The drugs can cost upward of $10,000 a year without insurance coverage.
In April, Bloomberg reported that 10 states offer broad coverage of weight-loss drugs through Medicaid, and an additional six states offer limited coverage.
Kate McEvoy, executive director of the National Association of Medicaid Directors, told Becker's Medicaid programs cover a wide range of treatments for obesity and have to compare the costs with the benefits of all treatments.
"I think the central question for Medicaid is: Is this something of need for Medicaid members? That is definitely the case for interventions to help people address obesity, because of the high incidence of obesity and its relationship to chronic conditions," Ms. McEvoy said.
Private insurers often do not cover GLP-1 drugs for weight loss only, though they often cover the same drugs to treat Type 2 diabetes. Ozempic, Trulicity, Victoza and Mounjaro are FDA-approved to treat Type 2 diabetes, and Wegovy and Saxenda are approved for weight loss.
In a June survey from the Pharmaceutical Strategies Group, 49 percent of plans surveyed said they currently cover medications for weight loss, compared to 41 percent of employers.
Some large self-insured employers, including Ascension and the University of Texas, have recently dropped coverage of weight loss drugs, citing high costs and low adherence rates.
Medicare is currently barred from paying for prescription weight loss drugs, though a bill filed in the Senate July 20 aims to lift the ban.
Geoffrey Joyce, associate professor of pharmaceutical and health economics at the University of Southern California in Los Angeles, told Bloomberg as more competitors to Wegovy enter the market, the costs of the drug could decrease.
Mounjaro, manufactured by Eli Lilly, is expected to gain FDA approval to be used for weight loss in the coming months.
Read Bloomberg Law's full report here.