The IRA, Medicare and the High Costs of GLP-1 Drugs Like Wegovy

Wegovy prices

Pictured: A pharmacist ringing up a prescription medication/iStock, MJ_Prototype

GLP-1 drugs were again in the news this week. Sen. Bernie Sanders (I-Vt.), chair of the Senate health committee, blasted Novo Nordisk for the “outrageous” cost of its Ozempic (semaglutide) type 2 diabetes medication and its sister weight-loss drug Wegovy. Sanders said the Danish drugmaker is charging Americans nearly $1,000 a month for Ozempic, while the same exact product can be purchased for just $155 a month in Canada and $59 in Germany. Another reminder that the U.S. pays the highest prices in the world for many prescription drugs.

The progressive firebrand’s solution: Novo Nordisk should lower the U.S. list price of Ozempic and Wegovy to no more than what the company charges in Canada. In this election year, it’s the kind of political agenda shared by former President Donald Trump as he seeks a second term in the Oval Office, with drug prices in other countries becoming the benchmark for determining fair prices here.

The high costs of GLP-1 drugs is an issue that will continue to fester amid surging demand for these blockbusters. Recent endorsements from celebrities like Oprah Winfrey are helping to make weight-loss medications like Wegovy and Eli Lilly’s Zepbound mainstream, with GLP-1 agonists set to surpass PD-1 antagonists as the best-selling drugs in 2024, according to data analytics firm GlobalData.

What this means for Novo and Lilly is huge profits as millions of Americans with obesity who seek these drugs will be unable to afford them. In the case of Novo, which made nearly $15 billion in profits last year, Sanders wants the drugmaker to “do the right thing with respect to Ozempic and Wegovy” and lower the U.S. prices like it did with insulin products.

With all due respect to Sanders, that’s not going to happen. We’re talking about a Big Pharma cash cow, and Novo wants to milk it. Let’s be honest: lower Wegovy prices are more likely to result from the Inflation Reduction Act’s Drug Price Negotiation Program. And that might not be that far off. An analysis last week from the Congressional Budget Office predicts that the Centers for Medicare and Medicaid Services (CMS) will select Wegovy for drug price negotiations under the Inflation Reduction Act (IRA) “within the next few years.”

The other policy change that’s desperately needed to allow more Americans to get their hands on Wegovy and Zepbound relates to a provision in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 that prohibits Medicare Part D plans from covering drugs used for weight loss. While Medicare currently covers some obesity treatments such as intensive behavioral therapy and bariatric surgery, it does not cover anti-obesity medications. This creates a gap in the continuum of care for older adults who are obese.

CMS last week said that Medicare will cover Wegovy under its Part D drug program for patients with overweight or obesity who have preexisting heart disease. It’s a good start, but the coverage must be expanded. Bipartisan legislation, the Treat and Reduce Obesity Act, has been introduced to do that.       

Last week, I wrote that the time has come for Medicare to make weight-loss drugs available to those who need them and to address this country’s obesity epidemic by covering these potentially transformative medications. I’m doubling down on that assertion. Sanders argues that the “outrageously high price has the potential to bankrupt Medicare,” but CMS could leverage the IRA to reduce the high costs of drugs like Wegovy.

Obesity in the U.S. already costs our healthcare system nearly $173 billion annually. Including weight-loss drugs in Medicare coverage would help seniors to better manage their weight and reduce the health risks associated with obesity such as high blood pressure, high cholesterol, heart disease and type 2 diabetes. It’s time to cut the fat in this country, literally and fiscally.

Greg Slabodkin is the news editor at BioSpace. You can reach him at greg.slabodkin@biospace.com. Follow him on LinkedIn.     

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