The anti-diabetic medication Ozempic (semaglutide) made by Danish pharmaceutical company Novo Nordisk” is being touted for its weightloss capabilities as well, a phenomenon that is causing supply shortages and patients finding out their insurers may not cover the cost.
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Demand for anti-obesity medications is expected to grow exponentially this year as a shortage eases 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 now 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 that works 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, and demand for prescriptions is 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.”
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 interruptions, have kept demand limited since it won approval in June 2021.
Now, Novo Nordisk says, it has fixed those problems, and some doctors say their patients can access the medication. Wegovy’s list price is $1,349.02 a month, or more than $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.
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.
Treating the health effects of obesity costs the U.S. health care system $170 billion a year, according to ECRI.
It made some sense in the past for insurance companies not to cover anti-obesity medications, Rind said. That’s because many drugs promoted weight loss of only 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.
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.”
If spotty health insurance coverage for anti-obesity medications is allowed to continue, it will probably worsen economic and ethnic disparities, especially among children, said Cornell University health economist John Cawley.
“Teens and young adults whose parents have health insurance will get coverage. Others won’t,” he said.
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 neither do government programs like Medicare.
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.)
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.”
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 as if 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.
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