What to Know About Weight Loss Drugs Coverage

Weight loss drugs are estimated to become a $100 billion global business by 2030 according to Goldman Sachs Research.

The most popular FDA approved weight loss drug label is Wegovy, capturing about 85% of the on-label chronic weight management market in May this year. Demand is so strong that the manufacturer Novo Nordisk struggled with supply.

In November, the FDA approved Zepbound, manufactured by Eli Lilly, that would directly compete with Wegovy.

Where are we with weight loss drug coverage?

There is limited coverage for weight loss drugs, however, insurers are facing high demand to expand their policies to include this medication. Adding to the pressure, the American Medical Association (AMA) is urging for health insurance coverage parity, to ensure everyone can have access to anti-obesity medication. Here’s where we’re at with coverage:

Medicare: The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 currently blocks coverage, where it considers obesity as a lifestyle choice rather than a medical condition.

A reintroduced bill, the Treat and Reduce Obesity Act, aims to overturn the prohibition and has received bipartisan support. Still, it could take some time before it can be put to vote due to factors like challenges in the fiscal climate, as well as the upcoming US presidential election in 2024.

The Congressional Budget Office is yet to release a cost estimate for legislation that would expand Medicare access, but it has noted it will study the cost savings from improved health outcomes from reducing obesity, for example, whether there are savings from reduced hospitalizations from cardiac arrests.

Medicaid: Like Medicare, the 2003 law allows exclusion of weight loss drugs from coverage but some states are choosing to cover. As of November, nine states have added Novo Nordisk’s Wegovy to its preferred drug lists via negotiated manufacturer discounts. In the short-term, our colleagues in Goldman Sachs Research are expecting more states to ramp up coverage with some restrictive measures.

Commercial health insurance: About 75% of the total market demand for weight loss drugs come from the commercially insured population, adding pressure to employers to consider expanding their health insurance coverage. The high drug price, however, remains a key barrier.

So far, Goldman Sachs Research found only three insurers (FEP, Highmark, and BCBS Michigan) out of the top 10 provides coverage. Insurers most likely will wait for a tidal moment before providing broader access, which could either come in the form of more standardized coverage decisions; adoption by Medicare; or until weight loss is deemed an “essential benefit” as defined under the Affordable Care Act.

How much does it cost?

Goldman Sachs Research expects the FDA approval of Eli Lilly’s Zepbound to promote competition. It could help payers negotiate a lower price for treatment. Eli Lilly announced the list price to be $1,059.87 and expects the medication to be available in the US by the end of 2023.

The following are wholesale acquisition prices (before supplier rebates, discounts) of anti-obesity medication as of October 19, 2023. Note Mounjaro, Saxenda, Ozempic are typically labels prescribed to manage weight of patients with Type 2 diabetes.

How to save on weight loss treatment

With limited coverage, most patients will likely be paying for treatment out of pocket and the costs can add up.  But there are still methods to save – here are four ways to consider:

1. Patient Assistance Programs (PAP)

Drug manufacturers may offer assistant programs if you qualify that could offer no cost or reduced cost for selected medications. NovoCare, Lilly Cares, and PAN Foundation websites have information on how to qualify and apply.

2. Manufacturer Savings Card

Manufacturers typically offer savings cards that act as a copay with insurers for patients with private or commercial health insurance. Depending on whether your insurer covers the weight loss medication, some manufacturers could offer affordable price plans.

For instance, Eli Lilly’s Zepbound could cost $25 a month for commercially insured patients who have coverage for the brand, or $550 a month if the insurance doesn’t cover Zepbound.

3. Health Savings Account (HSA) or Flexible Spending Account (FSA)

If your insurance doesn’t cover weight loss medication, you may want to think about using pre-tax money to cover the out-of-pocket medication costs.  For example, increasing your monthly contributions into HSA or FSA accounts may be one option to consider.

Just be mindful of the contribution maximums: $3,850 for HSA, and $3,050 for FSA for self-only accounts in 2023. For each household, you can contribute up to $7,750 for HSA, and $5,000 for FSA.

4. Prescription Savings Card

Prescription savings card companies like GoodRx and SingleCare may offer coupons and discounts with participating pharmacies on their platform. Check their websites for more information.