Researchers question value of Medicare Part D coverage for obesity drugs

As the push to extend Medicare coverage to weight loss drugs gains momentum, a group of researchers has calculated that the cost could be quite substantial.

If all estimated Medicare beneficiaries with obesity used Novo Nordisk’s semaglutide for weight loss, for example, the cost would exceed the entire Part D budget, according to a study published in the New England Journal of Medicine on Saturday. At 10% uptake, total spending would hover around $26.8 billion for brand-name semaglutide, the researchers wrote, excluding the costs associated with potential use by people who are overweight.

Khrysta Baig

“These are really exciting innovations. They bring a lot of hope to people,” lead author and Vanderbilt PhD student Khrysta Baig told Endpoints News. “The price is very high though, and that makes it so that it’s difficult to deploy them at a large scale. And so decision makers are going to need to be wise about the guidelines for who has access.”

Novo Nordisk won an approval for its GLP-1 therapy semaglutide in obesity back in 2021. The drug, marketed as Wegovy, contains the same active ingredient as the company’s type 2 diabetes drug Ozempic, just at a higher dose. The company was quickly met with “unprecedented demand,” eventually leading to shortages of both drugs and reported off-label use of Ozempic.

Novo Nordisk reported at the end of last year that all dose strengths of Wegovy were back on shelves. However, with a list price of more than $1,300 per package — adding up to an estimated annual cost of around $13,618 after rebates and discounts — access remains an issue. ICER determined back in October that Wegovy’s price would need to be lowered to $7,500 to $9,800 per year to meet its cost-effectiveness threshold, in part because some patients may need to use the drug continuously to maintain their weight loss.

“If the price was different, we probably wouldn’t be having this conversation,” Baig said on Monday.

Lawmakers reintroduced the Treat and Reduce Obesity Act in 2021, which would allow “coverage under Medicare’s prescription drug benefit of drugs used for the treatment of obesity or for weight loss management for individuals who are overweight.”

While the team of researchers from Vanderbilt and the University of Chicago acknowledged that the “burden of obesity and obesity-related conditions is unquestionably high,” they also noted that “it’s likely that Part D premiums would increase to accommodate spending on these products.”

“To the extent that other payers follow Medicare’s lead, such costs could be felt throughout the U.S. health care system,” they wrote. “A thorough understanding of the health benefits and risks associated with antiobesity-medication use, particularly in the Medicare population, is needed to guide coverage and reimbursement decisions so that access is focused on the people most likely to benefit.”

For now, they added: “The value of Medicare coverage of antiobesity medications remains unclear.”

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