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Millions of Americans and their insurers will be asked to pay for new weight loss drugs that cost over $1,000 a month. But the majority of health plans don’t cover these treatments.
Demand for anti-obesity medications is expected to grow exponentially this year, after a shortage eases up and several new drugs come on the market.
But the drugs cost $1,000 a month or more per person — and they need to be taken indefinitely.
With more than 40% of Americans weighing enough to qualify for these medications — and the majority currently ineligible for coverage — how much prevention can individuals and the country pay for?
“We appreciate that (the pharmaceutical) industry continues to look into” anti-obesity medications, said Dr. Marcus Schabacker, president and CEO of ECRI, a nonprofit trying to improve health care. “It just doesn’t help if it is unaffordable to the majority of patients who need it.”
Health care technology company Komodo Health calculates that more than 2 million prescriptions were written last year for Wegovy, the brand name for the drug semaglutide made by Novo Nordisk, and for tirpzepatide, by Eli Lilly, a diabetes drug that hasn’t yet been approved for weight loss.
These medications are expected to become more widely available this year, with demand for prescriptions projected to climb substantially.
Semaglutide has been shown to help cut someone’s excess weight by about 15% and tirzepatide by 20% — an unprecedented amount for medications. They are also expected to reduce health consequences and therefore medical costs.
“Obesity is this huge medical problem in the United States and here are drugs that are actually working,” said Dr. David Rind, chief medical officer for the Institute for Clinical and Economic Review, which estimates the value of different drugs.
“We’ve been waiting for drugs that do something like this for a really long time.”
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Why this is an issue now
Certainly, not everyone who weighs more than what is considered healthy will want these medications or would benefit from them. And weight loss from the medications, while impressive, will not make heavy people thin. But until recently, there were no drugs capable of helping people lose that kind of weight.
Shortages of Wegovy, driven by supply chain issues, have kept demand limited since it won approval in June 2021.
Now, Novo Nordisk says it has fixed those issues and some doctors say their patients can access the medication. Wegovy’s list price is $1,349.02 a month or over $16,000 a year at the full anti-obesity dose. (The same drug, sold under the brand name Ozempic, sells for a lower cost at a lower dose to treat diabetes.)
Also this year, federal regulators will consider approving tirzepatide, which seems to help people lose even more weight. Since winning approval in May as a treatment for diabetes, Eli Lilly has sold tirzepatide for $1,000 a month under the brand name Mounjaro. Other similar medications are likely to be approved in coming years.
These new anti-obesity medications, like those that treat high blood pressure and cholesterol, must be taken indefinitely, so once people start taking them they will need to continue or risk the pounds creeping back.
Meanwhile, the American Academy of Pediatrics recently changed their guidelines for children with obesity, recommending more aggressive treatments, including medications for children as young as 12. Guidelines released late last year from American Diabetes Association also recommend aggressively treating obesity, including using medications, in patients with diabetes.
The global market for anti-obesity medications is expected to grow by 25% over the next five years, driven largely by demand in North America, according to an analysis by Medi-Tech Insights, a business research firm.
More: How will the obesity epidemic end? With kids.
The cost of obesity
Treating the health effects of obesity costs the U.S. health care system $170 billion a year, according to ECRI.
Americans trying to lose weight spend another $70 billion annually – largely without success, and often “for remedies that are unproven and maybe even counterproductive or dangerous,” Schabacker said.
Weight loss medications are currently overpriced based on the value they provide, but “not dramatically” so, Rind said.
Even though older-generation drugs are less effective, ICER estimates that they provide more long-term value than their cost, by reducing obesity-related illnesses.
For instance, Qsymia, a combination of the drugs phentermine and topiramate, sells for $1,465 a year, but ICER estimates its benefits could justify an annual cost of $3,600 to $4,800.
Semaglutide, by contrast, typically costs consumers $13,618 a year, but brings a value of $7,500 to $9,800, ICER found.
Medications should eventually offset costs by preventing heart attacks, joint surgeries and other expensive therapies, Rind said.
But someone with a very high body mass index – a ratio of weight to height – is more likely to suffer health consequences than someone with a BMI closer to the cutoff threshold for obesity, at 30. So, cost savings will come mostly from a limited group, said Cornell University health economist John Cawley.
“It’s in preventing extreme obesity where the cost savings lie,” he said.
Why weight loss treatment hasn’t been covered so far
It made some sense in the past for insurance companies not to cover anti-obesity medications, Rind said. That’s because many drugs only promoted weight loss of about 5%, the lower limit of what will make a difference in someone’s health.
And a number of approved weight loss medications were taken off the market when they proved dangerous. In 2022, the Food and Drug Administration withdrew the weight loss drug lorcaserin, sold as Belviq, because of an increased risk of cancer among people who took the drug long-term. One of the drugs in the combination known as fen-phen (a combination of fenfluramine and phentermine) was famously withdrawn in 1997 for damaging patients’ heart valves.
“If every decade or two obesity treatments turn out to be killing people it make sense why somebody said they wouldn’t cover them,” Rind said.
But now that there are effective medications, the lack of coverage doesn’t make medical sense.
“Nobody would ask anybody who has hypertension to exercise and not give them a beta blocker or another approved drug,” Schabacker said. “If those Americans who quality for treatment would be covered under insurance plans or Medicare/Medicaid, it would contribute to lowering the health care costs for secondary diseases, such as hypertension, diabetes and muscular-skeletal diseases.”
Bias also drives this lack of coverage, he and the others said.
“Obesity is perceived as a choice, a consequence of people’s actions and therefore less worthy of coverage than even other conditions linked to diet, like Type 2 diabetes and high blood pressure,” Cawley said.
National surveys indicate that the vast majority of people who have obesity try to lose weight. “It’s not a lack of effort,” he said.
Decades of research now shows that human biology fights to regain lost pounds, slowing metabolism, for instance, when someone loses weight. Yet the perception still lingers that patients should be able to help themselves.
“We have ever better evidence that losing weight with diet and exercise does not work for 95% of people; pretending that it does makes no sense,” he said.
Rethinking Obesity:
If spotty health insurance coverage for anti-obesity medications is allowed to continue, it will likely worsen economic and ethnic disparities, especially among children, Cawley said.
“Teens and young adults whose parents have health insurance will get coverage. Others won’t,” he said.
Obesity is more common among low-income women, though not low-income men, he said.
People with low incomes and fewer food options rely more heavily on inexpensive, highly processed foods, which tend to promote obesity, Schabacker said.
“This aggravates the obesity issue and makes it even worse by not providing appropriate treatment for it, despite the fact that it’s available,” he said.
Who will pay for these medications?
Right now, the burden of paying for weight loss treatments typically falls to the patient. The majority of health plans don’t cover the cost of weight loss medications and government programs like Medicare do not.
Novo Nordisk, in a recent presentation to investors, said 40 million American adults have at least some insurance coverage for Wegovy. (Roughly 108 million U.S. adults meet the definition for having obesity.)
“Coverage policies can be very confusing and thus lead people to give up on getting these medicines from their drug plans — even when they might be covered,” said Ted Kyle, founder of ConscienHealth and former chair of the Obesity Action Coalition, a 75,000-member nonprofit that works to empower people living with obesity.
The lack of coverage at least partially explains why only about 2% of Americans with obesity have historically been treated with either weight loss medications or surgery.
Once multiple weight loss drugs come on the market there will be some competition and prices could moderate somewhat, said Rind, also an internist at Beth Israel Deaconess Medical Center. But if one drug seems to be better and becomes the one everyone wants, “that one will keep costing a lot.”
The arrival of these new expensive medications might also be a boon to less expensive, less effective drugs already on the market, he said. “We may also see some attempt to have patients use the most affordable drugs first.”
Rind’s organization, ICER, has recommended that Medicare begin paying for anti-obesity medications.
Commercial insurers should cover the medications, too, he said. But while it seems like they’d save money if people lose weight, these cost offsets will happen many years in the future, by which point the patient may have switched coverage plans.
Patent protections will keep low-cost generics off the market for at least two decades.
Maybe, Rind said, insurers and drug companies will reach a deal he described as a “Netflix plan,” where insurers will set a dollar amount and manufacturers will provide as much as they’re willing for that sum.
As with preventive care, Cawley said, the government could also mandate that all health insurers cover cost-effective weight loss treatments, which would reduce disparities.
He also said that insurers often use incentives to get policyholders to avoid wasteful spending. Cheaper weight loss medications could be made available without a co-pay, but the newer ones could cost patients more out-of-pocket.
This would “at least make consumers think twice before going for the more expensive option.”
Contact Karen Weintraub at kweintraub@usatoday.com.
Health and patient safety coverage at USA TODAY is made possible in part by a grant from the Masimo Foundation for Ethics, Innovation and Competition in Healthcare. The Masimo Foundation does not provide editorial input.
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