Costly weight-loss drugs are draining the NC State Health Plan. Can coverage continue? [The Charlotte Observer]

When just a few thousand state employees took Novo Nordisk’s weight loss drugs in 2021, the $1,350 monthly list price was steep but manageable for the NC State Health Plan.

After all, the blockbuster obesity drugs showed “game-changing” results. People taking Wegovy lost about 15% of their body weight. Clinical trials showed weekly injections could stave off diabetes and severe heart disease. Doctors hailed the drug as a breakthrough in obesity treatment.

But spending on these drugs has spiraled out of control now that more than 23,000 of NCSHP’s members take Wegovy and its less effective predecessor Saxenda, said Treasurer Dale Folwell, who oversees the state health plan.

The plan spent more on Wegovy than any other medication this year, the plan’s pharmacy benefit manager told the board of trustees in August.

At this pace, the State Health Plan would have to raise monthly premiums by $50 for 570,000 members in order to cover the projected costs of the medications, according to an analysis from NCSHP’s actuary.

“We’re on a trajectory of the health plan being financially under siege because of this one product,” Folwell said.

This month, NCSHP leaders are expected to reconsider how, or whether, the plan will cover these obesity medications moving forward in a decision that is likely to impact tens of thousands of state employees.

The future of weight-loss drug coverage in limbo

In other states, public employee health plans have already started to pull back coverage of anti-obesity drugs like Wegovy and Saxenda.

The health insurance plan for University of Michigan employees announced earlier this year that it would raise copays for the drugs in order to incentivize members to pick cheaper, although less effective, medications instead.

The plan for the University of Texas employees removed coverage for Wegovy and Saxenda on Sept. 1, citing “unsustainable costs” without a meaningful reduction in health care spending from obesity complications.

This summer, Connecticut’s state health plan announced it would only cover weight-loss prescriptions written by doctors from a single, approved obesity treatment company.

NCSHP is now considering its own options. As one of the largest state health plans in the U.S., North Carolina’s health plan is facing this problem at another scale.

In the first half of this year, about 2% of U.S. prescriptions for these obesity drugs came from North Carolina State Health Plan members alone. According to an NCSHP analysis, the plan’s spending on Wegovy and Saxenda accounted for nearly 3% of Novo Nordisk’s North American sales of the medications in the same time period.

At an August health plan meeting, the NCSHP director asked to hold off on adding a new diabetes medication (which could be used off-label for weight loss) to the list of covered medications while leadership reviews the entire class of drugs, a spokesperson for the Treasurer’s office said.

“We have no choice but to do what’s in the best interest of our members,” Folwell said. “And if that includes taking advice and best practices from other states…then we will do that.”

A spokesperson for Novo Nordisk declined to comment on the ongoing review or individual sales statistics from the state health plan.

Obesity specialists have urged the state health plan to keep these medications accessible to their patients, who would likely see the benefits of the drugs reversed if their injections became unaffordable.

On average, patients who stop the injections gain back about half of the weight they lost on the medications within a few years, said Dr. Andrea Coviello, the director of UNC School of Medicine’s Weight Management Program.

Dr. Kajal Zalavadia, a Raleigh obesity medicine specialist, said in a recent NCSHP meeting that scaling back coverage of these drugs could put thousands of state employees back at risk of developing obesity-related complications, like heart disease and diabetes.

“It’s very short-sighted to cut off or reduce access to these effective anti-obesity medications,” she said. “It makes thousands of your employees sicker.”

Does Wegovy spending pay off in the long run?

Novo Nordisk lobbyists have argued that the upfront cost of their drugs pays off in the long run because patients on the medications are less likely to develop other costly chronic conditions like Type 2 diabetes and heart disease.

“All of these obesity treatments do have costs associated but there’s a lot of health economic benefits,” the representative for the pharmaceutical company said at a recent State Health Plan meeting.

NCSHP argues the longer-term savings aren’t nearly enough to offset the cost, especially given that members would have to take the expensive drugs in perpetuity in order to maintain the health benefits.

An independent analysis from the Institute for Clinical and Economic Review, a nonprofit that reviews US prescription drug pricing, found Wegovy is not cost-effective at its current price.

Coviello cautioned that cost-effectiveness, which quantifies the monetary value of life, is based on subjective measures that are open to interpretation.

The NCSHP’s own analysis of current research found there were “no studies that show a positive return on investment.”

“If there were significant savings in medical claims to offset the high pharmacy costs, most plans would cover these drugs, but that has yet to be proven,” the report concluded.

State health plan leaders will discuss the future of these medications at the next Board of Trustees meeting on Oct. 26.

Teddy Rosenbluth covers science and health care for The News & Observer in a position funded by Duke Health and the Burroughs Wellcome Fund. The N&O maintains full editorial control of the work.

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