A choice of injector pens for the Saxenda weight reduction drug are shown on this photo illustration in Chicago, Illinois, U.S., March 31, 2023.
Jim Vondruska | Reuters
Novo Nordisk‘s obesity drug Wegovy slashed the chance of significant heart problems by 20% in a big clinical trial — a landmark finding that would put more pressure on insurers to cover the blockbuster medication and similar weight reduction treatments.
The information sent weight loss-related stocks soaring on Tuesday, with Novo Nordisk and its primary rival Eli Lilly soaring greater than 15%. Weight Watchers International, which owns a telemedicine firm that prescribes obesity drugs, jumped as much as 24%.
But it surely is probably going that more data of this kind can be mandatory before the U.S. sees increased insurance coverage for obesity drugs.
While the trial results exhibit that obesity drugs can have significant health advantages beyond shedding unwanted kilos, organizations representing U.S. insurers emphasized that the information continues to be preliminary. Additionally they said concerns remain in regards to the high costs involved with covering those medications, that are nearly $1,350 per thirty days for a single patient.
While the initial results “offer potentially encouraging news … it’s unimaginable to judge the efficacy and long-term effectiveness of a prescription drug based solely on a drug manufacturer’s press release,” said David Allen, a spokesperson for America’s Health Insurance Plans, a trade association of medical insurance corporations that cover a whole bunch of tens of millions of American.
“Medical health insurance providers will proceed to research latest evidence because it becomes available,” he added.
Ceci Connolly, CEO of the Alliance of Community Health Plans, acknowledged the promise of the information but said “outrageous prices should give everyone pause.” The organization represents regional, community-based health plans that cover greater than 18 million Americans across the U.S.
Drugs like Wegovy and Novo Nordisk’s diabetes drug Ozempic have skyrocketed in popularity within the U.S. — while drawing increasing investor interest — for helping people achieve dramatic weight reduction over time. Those treatments are generally known as GLP-1s, a category of medication that mimic a hormone produced within the gut to suppress an individual’s appetite.
Eli Lilly and Pfizer are working to roll out their very own GLP-1s in a bid to capitalize on a weight reduction drug market that some analysts project may very well be price as much as $200 billion by 2030. Nearly 40% of U.S. adults are obese.
But insurance coverage for these drugs is a mixed bag: The federal government’s Medicare program, most state Medicaid programs and a few industrial insurance coverage don’t cover the treatments. A few of the nation’s largest insurers, akin to CVS Health‘s Aetna, do.
Meanwhile, more health insurers are pulling back on coverage. A July survey by Found, an organization that gives obesity-care services to 200,000 people, showed that 69% of its patient population do not need insurance coverage for GLP-1 drugs to treat diabetes or weight reduction. The outcomes represent a 50% decline in coverage since December 2022.
Difficult old views of obesity drugs
The brand new data from Novo Nordisk challenges a long-standing narrative driving the hesitancy amongst insurers about covering obesity drugs: that Wegovy and similar treatments are merely lifestyle products that provide a cosmetic, not medical profit.
“There’s now a long-term, large clinical trial that proves that there is a big cardiovascular health profit for patients staying on these drugs,” Jared Holz, Mizuho health-care sector analyst, told CNBC.
“It’s just going to open up the market to a much bigger patient population over time,” he added.
Debra Tyler’s daughter takes her latest medication at home in Killingworth, Conn. She was on successful medication for obesity, nonetheless her family insurance dropped coverage on the drug, leaving the Tylers with difficult financial decisions.
Joe Buglewicz | The Washington Post | Getty Images
The study, which began almost five years ago, followed greater than 17,600 adults with established heart problems who were obese or suffered from obesity. It excluded individuals with a previous history of diabetes.
A weekly injection of Wegovy achieved the trial’s primary objective of reducing the chance of cardiovascular events, akin to heart attacks, strokes and heart condition-related deaths by 20% compared with a placebo.
The brand new Wegovy data mirrors among the reduced morbidity and mortality observed in individuals who undergo bariatric surgery, which involves making changes to the digestive system to assist a patient reduce weight, in accordance with Dr. Eduardo Grunvald, medical director of the UC San Diego Health Center for Advanced Weight Management.
Around 45% of U.S. employers cover that weight reduction procedure, while only 22% cover obesity drugs, in accordance with a 2022 survey released by the International Foundation of Worker Profit Plans.
Grunvald added that the information challenges the “outdated” concept that obesity is “purely a life-style problem or considered one of weak character and lack of willpower, and hence treatment mustn’t be covered.”
High cost to coverage
Then there’s the high cost of the treatments, at greater than $1,000 per patient, per thirty days.
The University of Texas System decided to ratchet down its coverage of those drugs dramatically, noting in July that the associated fee of covering the drugs under two of its plans is greater than $5 million per thirty days, up from around $1.5 million per thirty days 18 months ago, when demand for obesity treatments was lower.
The university is considered one of the most important employers in Texas, with greater than 116,000 employees across the state. Its plans will not cover Wegovy starting Sept. 1.
UTS didn’t immediately reply to a request for comment on whether it would reconsider coverage in light of the Novo Nordisk’s latest data.
“Provided that so many Americans would potentially qualify for these treatments, and the associated fee is so high, widespread coverage could pose a threat to [an insurance] company’s profitability,” UCSD’s Gunvald said.
He noted, nonetheless, that latest drugs entering the obesity market could drive competition and potentially lower prices. For instance, Eli Lilly’s diabetes drug Mounjaro could get approved for weight management over the subsequent 12 months. Other drugmakers are still years away from rolling out their very own medications.
But obesity is a chronic condition, meaning it doesn’t simply go away when a patient loses weight. So patients must proceed to take drugs like Wegovy to maintain the kilos off and maintain other health advantages, which might further strain insurers’ budgets.
“It’s totally difficult to justify that expense since the insurance would never recoup that,” said Dr. Ethan Lazarus, an obesity medicine physician and past president of the Obesity Medicine Association. That group is the most important organization of physicians, nurse practitioners and other health-care providers dedicated to treating obesity.
“I find it unlikely that we’ll prove the cost-effectiveness of those medications at a price of $12,000 a 12 months,” he said.
The price barrier could also be even higher in the general public sector. A recent article within the Latest England Journal of Medicine warned that if just 10% of obese Medicare beneficiaries were to take Wegovy, it could cost this system $27 billion a 12 months.
The federal program had 65 million enrollees as of March and currently doesn’t cover the treatments.
A provision of a 2003 law established that Medicare Part D plans cannot cover drugs used for weight reduction, but this system does cover obesity screening, behavioral counseling and bariatric surgery.
Lazarus noted that a gaggle of bipartisan lawmakers have aintroduced laws that will eliminate the supply, but said its fate in Congress is removed from certain.
Need for more data
Lazarus said there can also be a necessity for more data demonstrating the heart-health advantages of obesity drugs before more insurers determine to cover them.
“I feel we’d like two or three more of those,” he said. “It becomes more compelling if we see it as an effect for the category of medication versus an effect for one company’s drug.”
Eli Lilly is conducting its own study on whether its diabetes drug Mounjaro prevents heart attacks, strokes and other cardiovascular conditions. It’s unclear when the corporate will release its data.
But experts and analysts are already confident that Mounjaro could have similar — if not higher — heart-health advantages as Wegovy.
Wells Fargo analyst Mohit Bansal noted that Wegovy causes around a 17% weight reduction in patients, while Mounjaro causes roughly 22%.
“By that logic, it does seem it could have higher cardiovascular profit,” he told CNBC.