Hope seems to have emerged in America’s battle of the bulge with the FDA’s 2017 approval of Novo Nordisk’s once weekly injection Ozempic, which quickly became known for its off-label success as a weight-loss drug, despite its indication for type 2 diabetes. The ensuing years brought Wegovy, with its weight loss indication.  These products were closely followed by Lilly’s Mounjaro (type 2 diabetes) and Zepbound (weight loss).

In 2024, Wegovy was approved for a second indication, to reduce the risk of major adverse cardiovascular events (cardiovascular death, non-fatal myocardial infarction, or non-fatal stroke) in adults with established cardiovascular disease and either obesity or overweight.

Recently, Lilly reported results from a phase 3 clinical trial aimed at adults with obesity and obstructive sleep apnea, which found that tirzepatide (the main ingredient in Mounjaro and Zepbound) reduces symptom severity by nearly two-thirds.[1] Additionally, as of June 2024, Lilly had several tirzepatide clinical trials in the works, including:

• Enrolling participants in a study of tirzepatide impact on participants with overweight or obesity (with or without diabetes) and chronic kidney disease.[2]–[3]
• Collaboration with University of Melbourne to study if tirzepatide can reduce the number of participants with obesity and knee osteoarthritis who require a knee replacement.[4]

Will an increase in non-weight-loss indications for these products translate to more payer coverage?  A recent survey estimates that only about 25% of employer-sponsored health plans cover the GLP-1 drugs that are indicated for weight loss.  Although the Affordable Care Act (ACA) requires individual and small group health plans to cover at least one drug in every United States Pharmacopeia (USP) category and class, the current USP MMG guidelines do not include a weight loss category so ACA plans are not currently required to cover the GLP-1s for weight loss. Similarly, for purposes of Medicaid coverage, each state may determine their own coverage rules when it comes to weight loss medications, which most state plans exclude. Medicare Part D does not currently cover weight loss medications,[5] but Medicare Part D plans can cover GLP-1 medications for other approved indications such as diabetes or prevention of heart attacks.[6]

Juxtapose the general lack of weight loss drug coverage with the fact that obesity is a major epidemic that costs the US billions in lost productivity and medical costs per year. When factoring common obesity comorbidities, such as hypertension, dyslipidemia, type 2 diabetes mellitus, obstructive sleep apnea, and cardiovascular disease, this total cost estimate rises exponentially. A 2023 report estimates the total annual cost of obesity and overweight to employers and employees to be over $400 billion. Nearly half of this cost is attributed to direct spend of $147 billion in medical costs ($90 billion for employers, $57 billion for employees), $31 billion in disability payments, and $5 billion in worker’s compensation. Indirectly, obesity and overweight are estimated to contribute $240 billion in lost productivity (absenteeism and presenteeism). While it is tempting and sometimes necessary in the short-term to focus on reducing immediate drug spend, it may behoove payers to factor in the avoidance of potential future trends caused by common obesity comorbidities. Nonetheless, the majority of Medicare Part D, state, and employer plans are choosing to cover GLP-1 drugs only when the indication is for something other than weight loss.[7]

This “choice” is likely necessitated by the rising cost of GLP-1 coverage due to the volume of obese and overweight people in the general population, leading payers to focus on providing coverage for other costly obesity comorbidity indications (e.g. diabetes, sleep apnea, osteoarthritis, etc.). For one example where payer coverage of GLP-1 drugs for weight loss was deemed not financially feasible, the North Carolina State Employee Health Plan estimated that coverage for weight loss indication would reach $1 billion by 2030, nearly twice the amount of member premiums, and chose instead to cover these products only for those members who also have diabetes.[8]

Therefore, as more obesity comorbidities are approved as effective GLP-1 drug indications, we would expect to see additional employer, state, and federal coverage for these drugs. In turn, we would expect improvement in both obesity levels and the multiple accompanying comorbidities, thereby in the longer-term exponentially lowering overall medical and pharmaceutical costs to the payer. For one example of how GLP-1 drugs have the potential to provide multiple bangs for the buck, researchers estimate that about 70% of people who have obstructive sleep apnea also have obesity.[9] Research also shows that obstructive sleep apnea can increase the risk of cardiovascular disease, type 2 diabetes, mood disorders, and cancer.[10] For payers that provide both pharmacy and medical coverage (especially when these payers are self-insured employers), it may make more sense to include GLP-1 drugs on their formularies, from both a reduction in long-term plan costs and increased productivity perspective.  With the large potential patient population, expanded indications, and rising payer costs, PHSL will continue to watch the GLP-1 bubble as it continues to inflate.

 

[1] “Zepbound and Mounjaro improve sleep apnea symptoms, Eli Lilly shows,” April 23, 2024. https://www.medicalnewstoday.com/articles/zepbound-mounjaro-improves-sleep-apnea-symptoms

[2] “A Study of Tirzepatide (LY3298176) in Participants With Overweight or Obesity and Chronic Kidney Disease With or Without Type 2 Diabetes (TREASURE-CKD),” Last Update Posted May 21,2024. https://clinicaltrials.gov/study/NCT05536804

[3] “A Study of Tirzepatide (LY3298176) in Participants With Overweight or Obesity and Chronic Kidney Disease With or Without Type 2 Diabetes (TREASURE-CKD),” last accessed June 14, 2024. https://trials.lilly.com/en-US/trial/360461

[4] “Subcutaneous Tirzepatide Once-weekly in Patients With Obesity and Knee Osteoarthritis (STOP KNEE-OA) (STOP KNEE-OA),” Last Update Posted January, 16, 2024. https://clinicaltrials.gov/study/NCT06191848

[5] “Does Health Insurance Cover Drugs Used for Weight Loss such as Ozempic, Wegovy, Mounjaro, and Zepbound?” April 26, 2024. https://www.healthinsurance.org/faqs/does-health-insurance-cover-drugs-used-for-weight-loss-such-as-ozempic-wegovy-mounjaro-and-zepbound/

[6] “Medicare plans can now cover Wegovy for patients at risk of heart disease.” March 22, 2024. https://www.npr.org/sections/health-shots/2024/03/22/1240170094/wegovy-medicare-part-d-weight-loss-drugs

[7] “Assessing the Economic Impact of Obesity and Overweight on Employers,” February 2024. https://www.globaldata.com/health-economics/US/Employers/Overweight-Obesity-Impact-on-Employers.pdf

[8] “Does Health Insurance Cover Drugs Used for Weight Loss such as Ozempic, Wegovy, Mounjaro, and Zepbound?” April 26, 2024. https://www.healthinsurance.org/faqs/does-health-insurance-cover-drugs-used-for-weight-loss-such-as-ozempic-wegovy-mounjaro-and-zepbound/

[9] “Obesity and Obstructive Sleep Apnea,” May 5, 2017. https://obesitymedicine.org/blog/obesity-and-sleep-apnea/

[10] “Zepbound and Mounjaro improve sleep apnea symptoms, Eli Lilly shows,” April 23, 2024. https://www.medicalnewstoday.com/articles/zepbound-mounjaro-improves-sleep-apnea-symptoms

 

Posted June 17, 2024