North Carolina state health plan drops weight loss drug coverage; to incur $54M rebate loss

North Carolina's state health plan dropped new coverage for weight loss drugs Jan. 1, a decision that is expected to cost the state $54 million in lost drug rebates, WRAL News reported Jan. 12.

In October, the board overseeing North Carolina's state health plan instituted a moratorium on coverage of new prescriptions for GLP-1s. The decision does not affect employees taking the drugs for diabetes.

North Carolina's treasurer, Dale Folwell, had urged the state board to end coverage for GLP-1 drugs such as Wegovy and Saxenda, citing high costs. The state's health plan provides coverage to more than 740,000 public and state employees, retirees and their dependents. It is currently facing a $4.2 billion funding gap over the next five years.

According to Mr. Falwell, weight-loss drugs have a net cost of more than $800 per member per month. The plan spent $52.3 million on Wegovy and Saxenda specifically during the first half of 2022, accounting for 2.6% of Novo Nordisk's entire 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.

According to WRAL, GLP-1 prescriptions under the state health plan grew to 25,000 by the end of 2023, leading to spending of about $100 million for the drugs, or 10% of all prescription drug spend. With the state board's decision not to cover new GLP-1 prescriptions, the plan will not qualify for a 40% rebate from the manufacturer, Novo Nordisk, and the plan's PBM, CVS Caremark, causing the price of GLP-1 prescriptions to increase $54 million in 2024.

“We remain confident in our ability to deliver a solution to the State Health Plan that provides coverage for weight-loss drugs while delivering meaningful discounts,” a CVS Caremark spokesperson told WRAL.

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