New GLP-1 drugs to treat Type 2 diabetes and obesity can be expensive, but payer leaders said the costs aren't breaking the bank yet.
GLP-1 drugs, including Ozempic, Trulicity, Victoza and Mounjaro are used to treat Type 2 diabetes. Wegovy and Saxenda are approved for weight loss. The drugs can cost upward of $10,000 annually without insurance coverage.
Payers typically do not cover newer drugs meant for treating obesity but do often cover drugs meant to treat diabetes. GLP-1 drugs marketed for weight loss are typically not covered, though the same drug marketed for diabetes treatment is typically covered.
Executives told investors most use of the drugs is constrained to diabetes care. Some executives saw managing the new expensive therapies as a growth opportunity for pharmaceutical benefit managers.
Here is what five payer leaders had to say about the new drugs in calls with investors in April and May:
Brian Thompson, CEO of UnitedHealthcare: "We have seen an increase in trend in GLP-1s. The overwhelming majority of that is in diabetic care, and it is as we had expected, low single digits in terms of weight loss use. I would say that our on-label usage has been well managed with our authorization requirements. And I think it's important to put it in the context of our overall medical. Keep in mind, pharmacy is about 20 percent of our overall spend in any one therapeutic class. This one certainly included [at] less than 1 percent. So increased [use] year over year, [the] overwhelming majority in diabetic care, well-managed in terms of off-label use and consistent with what we had planned for."
Andrew Witty, CEO of UnitedHealth Group: "First of all, it's good news that we're seeing innovation in areas like weight management. That obviously is going to be an important aspect of consideration for people, particularly with comorbidities. Diabetes is an obvious example of that, number one. Number two, I think as time plays out, what's going to be super critical here is — we need to get focused on the facts and reality of this marketplace. We need to really be clear about which patients really do benefit from these medicines and make sure we properly understand how they're going to use those medicines. So there's a lot still to learn, I think, as these things progress through their final phases. And then finally, of course, we've got to see the prices be affordable, and that's going to be a key element of how this evolves. And obviously, we keep a close eye on the prices we see in Europe. … We're going to be looking for the very best pricing on these medicines, and we're going to advocate on behalf of members and consumers to get that."
David Joyner, president of pharmacy services at CVS Health: "There's a big focus on … advocacy, both in the states and at the federal level, and they're very focused on making sure that they both educate and preserve the tools that [PBMs] have available to us to manage the spend. So whether [it's] biosimilars or the high cost of GLP-1s, is making sure that we continue to actually have the tools in place to drive competition that allows us to reduce cost for our customers."
John Gallina, CFO of Elevance Health: "I do want to make sure people are clear that GLP-1 is [for] both weight loss and diabetes. And for weight loss, we do not cover weight loss drugs, with the exception of a few states where it's required by state law. So that's not really … been part of the conversation and was never part of any of the commentary. …
"And then in terms of the diabetes drugs, certainly, we want to make sure that people who have diabetes that need access to those drugs are getting access to them, but to have the appropriate protocol, so that they're not utilized for purposes that are other than medical necessity for diabetes-type folks."
David Cordani, CEO of the Cigna Group: "By way of headline, we think the drugs and the treatment protocols represent a positive step forward specifically for diabetics as such. We have coverage within our formulary. I would remind you that early on when the first within the class came out, we actually stepped in with some value-based care arrangements with pharmaceutical manufacturers and have seen positive contributions for both the benefit of patients as well as our clients. 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. …
"You should also think about the Cigna Group's portfolio, because of Evernorth, as having some dimension of a natural hedge given the size and sophistication and reach of our pharmacy and specialty pharmacy programs and the breadth of the clients we're able to serve within that portfolio. So we see this as a growth opportunity within the Evernorth portfolio and the clinical depth we have in there in terms of coordinating services for individuals will be helpful in terms of ensuring that the value is delivered. So emerging space in [GLP-1 and new Alzheimer's drugs] some promise, early adoption, some track record in value-based care. And importantly, I would underscore, we have a natural hedge relative to some cost pressure you would think about in the benefit space through our high-performing services space."