The latest GLP-1 findings come as insurers, health systems, state health plans and self-funded employers have publicly grappled with how to cover the expensive medications, with some large organizations limiting coverage or dropping benefits entirely.
“The outrageously high price of Wegovy and other weight loss drugs have the potential to bankrupt Medicare and our entire healthcare system,” Sen. Bernie Sanders said. “The unjustifiably high prices of these weight loss drugs could also cause a massive spike in prescription drug spending that could lead to an historic increase in premiums for Medicare and everyone who has health insurance.”
Weight loss medications such as Ozempic and Wegozy can cost upward of $10,000 a year. In 2022, Medicare spent $5.7 billion on the medications, up from $57 million in 2018, according to KFF. If half of Americans with obesity took weight loss drugs, it would cost $411 billion annually, a May 15 report from Mr. Sanders’ office found.
Commercial insurers have also highlighted the impact GLP-1s are having on profits and member premiums. Most recently, Highmark Health, which operates BCBS affiliates in four states, noted in its first quarter financial report that its health plans continue to face “rising pharmaceutical costs, particularly around GLP-1 drugs.”
Highmark reported $194 million in profit in the first quarter, but individual BCBS companies have seen recent losses in part because of the rising cost of covering weight loss drugs.
Executives at other large insurers such as CVS Health and Cigna have touted the expensive therapies as a growth opportunity for their pharmacy benefits divisions.
“We think the drugs and the treatment protocols represent a positive step forward specifically for diabetics as such. We have coverage within our formulary,” Cigna Group CEO David Cordani told investors in 2023. “But to date, I’d also add that employers have had a more limited appetite to expand coverage beyond clinical diagnoses such as diabetes for certain lifestyle treatments.” In May, the company said the number of employers covering the cost of weight loss drugs is around 50%, a “modest increase” from previous quarters.
Though Medicare is barred from covering GLP-1s for weight loss only, new policies from the FDA and CMS in March led Elevance, Kaiser Permanente and CVS to become the first Medicare plans to cover Wegovy for seniors with certain heart conditions.
Ozempic and Wegovy manufacturer Novo Nordisk said in May it is prepared to work with lawmakers to address “systemic issues so that everyone who can benefit from its medicines is able to get them.” The company said the focus on list prices for GLP-1s is misplaced and unfair, in part citing the $10 billion in upfront investment required to develop the drugs.
Novo Nordisk and Eli Lilly have each recently invested billions to boost production of their weight loss medications.
