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- Wegovy has shown significant effectiveness in reducing cardiovascular risks, but insurance coverage remains limited.
- The high cost of Wegovy, around $1,350 per month, is a major barrier for insurers and patients.
- Insurance coverage for Wegovy and similar weight loss drugs is inconsistent across different plans and providers.
- Some insurers and employers are reluctant to cover Wegovy due to concerns about long-term financial strain on health plans.
- The potential market for Wegovy is estimated at 100 million people or more, making it challenging for insurers to absorb the costs.
- Novo Nordisk, Wegovy’s manufacturer, is advocating for broader insurance coverage, including Medicare.
- Some entities, like the state of North Carolina, have scaled back coverage due to financial concerns.
- Insurers are exploring cost-control measures such as step therapy, BMI-based eligibility rules, and spending caps.
- Patients without insurance coverage may have options such as employer requests, Medigap plans, or state Medicaid programs.
- Insurance companies often require prior authorization for Wegovy coverage, which can delay treatment.
Many insurance companies and employers are reluctant to cover Wegovy, due to its high monthly cost of around $1,350 and concerns about long-term financial strain on health plans.
Economic impact on employers
The economic impact of covering weight loss drugs like Wegovy on employers is significant and complex. A survey by healthcare advocacy firm Accade revealed that 43% of employers are considering covering GLP-1 receptor agonist medications in 2024, up from 25% in 2023.
However, the high costs of these drugs, reaching up to $1,000 per month per patient, have led some employers to implement restrictions or cease coverage entirely. For instance, North Carolina’s state health insurance plan for public employees stopped covering Wegovy and Saxenda due to projected costs exceeding $1 billion within six years.
To manage expenses, some employers offer limited coverage, implement clinical lifestyle programs, or impose body mass index thresholds for drug eligibility.
Despite these challenges, many employers recognize potential benefits, including improved employee health and satisfaction with insurance packages. The situation highlights the delicate balance employers must strike between providing comprehensive health benefits and managing escalating healthcare costs.
Medicare and legislative hurdles
Medicare’s recent decision to cover Wegovy for certain beneficiaries with cardiovascular disease and obesity or overweight has raised significant questions about the affordability and accessibility of novel medications.
The Centers for Medicare & Medicaid Services (CMS) announced that Medicare Part D plans can now cover Wegovy for overweight or obese patients with established cardiovascular disease. However, this coverage is not extended to beneficiaries seeking the drug solely for weight loss.
The high cost of Wegovy, currently listed at $1,349.02 per month, poses challenges for both Medicare and beneficiaries. While the Inflation Reduction Act will implement an annual out-of-pocket cap of $2,000 for Medicare Part D drugs starting in 2025, adding such an expensive drug to plan formularies could potentially drive up Part D premiums in future years.
Legislative hurdles remain, as Congress would need to act to broaden coverage for obesity therapies aimed at chronic weight management.
Comparative cost analysis with other treatments
Wegovy’s monthly wholesale price of $1,349 is significantly higher than many other weight loss treatments in the U.S. and internationally. Compared to its diabetes counterpart, Ozempic, Wegovy is priced about 58% higher despite containing the same active ingredient, semaglutide.
This price difference is attributed to the higher dosage in Wegovy (9.6mg vs 4mg in Ozempic). In contrast, older weight loss medications and interventions are considerably less expensive.
For instance, nutrition and exercise programs, while less effective, come at a fraction of the cost. Even other GLP-1 agonists like Trulicity (dulaglutide) and Saxenda (liraglutide) are priced lower at around $977 and $1,349 per month, respectively.
However, Wegovy’s effectiveness in achieving 15% average weight loss over 68 weeks, compared to 5-10% with older treatments, raises questions about its long-term value despite the high upfront costs.