Medicare spending could increase between $3.1 billion and $6.1 billion annually if the program covers GLP-1 drugs for weight loss, a study published Aug. 15 in Health Affairs found.
Under current law, Medicare cannot pay for any drug prescribed solely for weight loss.
Researchers modeled two different cost scenarios that could occur if Medicare covers GLP-1 drugs for weight loss. Though Medicare does not cover GLP-1 drugs for weight loss only, it does cover the drugs to treat diabetes.
If Medicare expanded coverage of weight loss drugs, 10.9 million Medicare beneficiaries with obesity or overweight diagnoses would become eligible for the drug, the study's authors estimated.
If 5% of eligible beneficiaries begin using GLP-1 drugs, Medicare costs would increase by $3.1 billion annually, researchers estimated. If 10% of eligible beneficiaries use the drugs, costs would increase by $6.1 billion.
GLP-1 drugs can cost upward of $10,000 per year without insurance. Wegovy and Zepbound are approved to be used for weight loss.
In June, the House Ways and Means Committee advanced a proposal to allow Medicare coverage of weight loss drugs for beneficiaries who were prescribed the drug for at least a year before switching to Medicare.
The introduction of Zepbound is likely to put downward pressure on competitor Wegovy, cutting prices over time, the study's authors wrote. GLP-1 products are also likely to be selected for Medicare price negotiation in the coming years, reducing costs, according to the authors.
A previous study published in the New England Journal of Medicine in 2023, estimated weight loss drug coverage would cost Medicare $26.1 billion annually if 10% of eligible beneficiaries were prescribed the drug.
Though the two studies are not directly comparable, newer, more accurate net price data accounts for much of the difference between the two studies, the authors wrote.
The study was written by researchers at the American Enterprise Institute, a Washington, D.C.-based think tank, and Johns Hopkins University in Baltimore.
Read the full study here.