Sanders: Weight loss drugs could bankrupt healthcare system

Weight loss drugs have the potential to bankrupt the U.S. healthcare system, according to a May 15 report from Sen. Bernie Sanders' office.

Mr. Sanders chairs the Senate Committee on Health, Education, Labor, and Pensions, which opened an investigation into Novo Nordisk's list prices for Ozempic and Wegovy in April.

Medicare total spending hit $5.7 billion in 2022 for GLP-1s, up from $57 million in 2018, according to a March analysis from KFF.

"Today's report makes it crystal clear: The outrageously high price of Wegovy and other weight loss drugs have the potential to bankrupt Medicare and our entire healthcare system," Mr. Sanders said. "The unjustifiably high prices of these weight loss drugs could also cause a massive spike in prescription drug spending that could lead to an historic increase in premiums for Medicare and everyone who has health insurance."

Novo Nordisk charges $969 per month for Ozempic in the U.S., compared to $155 in Canada, $122 in Italy, $71 in France and $59 in Germany. The Danish drug manufacturer lists Wegovy for $1,349 per month in the U.S. 

"It's easy to oversimplify the science that goes into understanding disease and developing and producing new treatments, as well as the intricacies of U.S. and global healthcare systems," a Novo Nordisk spokesperson told Becker's in April. "However, the public debate doesn't always take into account this extremely complex reality."

Four key report findings:

1. If half of Americans with obesity took weight loss drugs, it would cost $411 billion annually. 

2. If half of all Medicare and Medicaid enrollees with obesity took weight loss drugs, it would cost the government $166 billion every year.

3. Weight loss drugs could raise total annual prescription drug spend by Americans to $1 trillion.

4. If Wegovy was sold in the U.S. for the same price as it is in Denmark ($186 a month), the U.S. healthcare system could save up to $317 billion dollars annually if half of adults with obesity took the drug. Medicare and Medicaid could save $128 billion per year under those conditions.

Wider context

Ozempic, Trulicity, Victoza and Mounjaro are approved to treat Type 2 diabetes, though these drugs are prescribed off-label for weight loss. Wegovy and Saxenda are specifically approved for weight loss. 

Medicare is barred from covering GLP-1s for weight loss only. In March, the FDA approved Wegovy for obese and overweight adults with heart disease; 3.6 million Medicare beneficiaries are in the expanded patient population. The same month, Elevance Health, Kaiser Permanente and CVS Health said they will cover Wegovy for Medicare members with certain heart conditions — CMS also issued guidance in March that allows Part D plans to cover anti-obesity medications if approved for additional health benefits and used for those conditions. 

Five state Medicaid programs provide unrestricted coverage of Wegovy and Saxenda. The country's largest Medicaid managed care organization, Centene, said in April that few other states are implementing similar policies.

Notably, state health plans and self-insured employers have publicly grappled with how to cover the expensive medications, with some large organizations dropping coverage entirely.

In April, North Carolina's State Health Plan stopped covering weight loss drugs for public employees. The health plan spent $52.3 million on Wegovy and Saxenda specifically during the first half of 2022, accounting for 2.6% of Novo Nordisk's North American profits on the two products. Spending on the two drugs was projected to exceed $170 million in 2024, and increase to more than $1 billion over the next six years. In contrast, Illinois is expanding coverage of weight loss drugs to state employees in July, a move that could cost the state up to $210 million annually.

Health systems such as St. Louis-based Ascension and Rochester, Minn.-based Mayo Clinic have recently ended or limited coverage for weight loss drugs through their employee health plans. Some Blue Cross Blue Shield companies have reported recent losses in part because of the rising cost of covering weight loss drugs.

Cigna executives told investors in May that the number of employers covering the cost of weight loss drugs is around 50%, a "modest increase" from previous quarters. 

The country's largest insurer, UnitedHealth, said in October that it wants to lower the price of GLP-1s, but it needs drug manufacturers to get on board.

"We're very positive about the potential for another tool in the toolbox to help folks manage their weight," UnitedHealth Group CEO Andrew Witty said. "We recognize that has potential benefits, but we're struggling, and frankly our clients are struggling, with the list prices which have been demanded of these products in the U.S., which are running at about 10 times the level of prices paid in Western Europe." 

"We need the manufacturers to move. It's as simple as that. And we remain extremely open minded to any model that works," he said.

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