North Carolina treasurer urges state to drop weight loss drug coverage for employees

North Carolina's treasurer, Dale Folwell, is urging the board that oversees the state's employee health plan to end coverage for GLP-1 drugs such as Wegovy and Saxenda, citing high costs.

"It defies logic that Novo Nordisk can sell the exact same product in the Netherlands for $296 per month and in the United States for more than $800 per month," Mr. Folwell said in an Oct. 24 news release. "They should be investigated by the Federal Trade Commission for unfair and deceptive business practices."

North Carolina's health plan provides coverage to more than 740,000 public and state employees, retirees and their dependents. It is currently facing a $4.2 billion funding gap over the next five years.

According to Mr. Falwell, weight-loss drugs are currently used by more than 23,000 members on the health plan with a net cost of more than $800 per member per month. The plan spent $52.3 million on Wegovy and Saxenda specifically during the first half of 2022, accounting for 2.6% of Novo Nordisk's entire North American profits on the two products. Spending on the two drugs is projected to exceed $170 million in 2024, and increase to more than $1 billion over the next six years. 

"We are not questioning the efficacy of the drugs, but we simply can't afford these medications at the manufacturer's current price point," Mr. Folwell said. 

On Oct. 26, the board overseeing the state health plan delayed a vote on whether to continue covering GLP-1s, the News & Observer reported. The board instituted a temporary moratorium for new users however, effective Jan. 1, which is also when the board will resume coverage discussions.

As demand for GLP-1s continues to surge, payers and self-insured employers have consistently ended coverage for the weight loss medications over the last year. Minneapolis-based Hennepin Healthcare is ending coverage for Wegovy and other injectable weight loss drugs for its employee health insurance plan next year, St. Louis-based Ascension dropped coverage for weight loss drugs from its employee health plan in July, and the University of Texas System in Austin ended coverage under its employee and retiree health plans in September, citing high costs and low adherence rates.

GLP-1s come with a steep price tag, costing upward of $10,000 per year without insurance. Private insurers often do not cover GLP-1 drugs for weight loss only, though they have been more likely to cover the drugs when they are prescribed to treat diabetes. Ozempic, Trulicity, Victoza and Mounjaro are FDA approved to treat Type 2 diabetes, and Wegovy and Saxenda are approved for weight loss. 

The country's largest insurer, UnitedHealth Group, told investors in October it wants to lower the price of weight loss drugs, but it needs drug manufacturers such as Novo Nordisk (Ozempic, Wegovy) and Eli Lilly (Mounjaro, Trulicity) to get on board. 

"We're very positive about the potential for another tool in the toolbox to help folks manage their weight," CEO Andrew Witty said. "We recognize that has potential benefits, but we're struggling, and frankly our clients are struggling, with the list prices which have been demanded of these products in the U.S., which are running at about 10 times the level of prices paid in Western Europe." 

"We need the manufacturers to move. It's as simple as that. And we remain extremely open minded to any model that works," Mr. Witty added.


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