State health plans decry weight loss drug costs for employees

North Carolina, Connecticut and Delaware's employee health plans are all grappling with how to cover the high cost of weight loss drugs, with each implementing limitations around coverage of the expensive medications.

As demand for GLP-1s continues to surge, payers and self-insured employers have consistently ended or limited coverage for weight loss medications, or GLP-1s, over the last year, including several major health systems. GLP-1s come with a steep price tag, costing upward of $10,000 per year without insurance. 

In Delaware, there is currently a $15 million funding deficit for the state's employee health plan, which spends an average of $1.2 billion annually. In November, the committee overseeing the plan cited weight loss drugs as a major contributing factor to the budget shortfall, Delaware Public Media reported Nov. 26.

“The projections from our pharmacy benefit manager was that we would likely spend about just shy of $2 million, and instead, it’s well over $7 million," the state's Department of Human Resources Secretary Claire DeMatteis told the outlet.

The state has clinical limitations for weight loss drug coverage, along with requiring proof of a diet and exercise regimen prior to a prescription.

Connecticut's employee health plan is using a lifestyle management program to control the cost of weight loss drugs. 

Since July, state employees seeking GLP-1 drugs for weight loss must enroll in a lifestyle management program called Flyte. Participants can receive personalized treatment plans from Flyte providers, who may prescribe GLP-1 drugs or another course of treatment. As of Nov. 3, 1,501 of Connecticut's more than 265,000 state employees had participated in the Flyte program

In October, North Carolina's treasurer, Dale Folwell, urged 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.

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 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 in a news release. 

On Oct. 26, the board overseeing North Carolina's state health plan instituted a temporary moratorium for coverage of GLP-1s, effective Jan. 1. The decision does not affect employees taking the drugs for diabetes, and discussions on a final decision are expected to resume in 2024, according to a news release from the State Employees Association of North Carolina.

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