Biden wants Medicare, Medicaid to cover pricey weight loss drugs such as Wegovy
The Biden administration Tuesday announced plans to provide coverage for a class of costly anti-obesity medications including Wegovy and Zepbound for those enrolled in Medicare and Medicaid.
Medicare, the federal health program for adults 65 and older, has been prohibited by law from covering weight loss drugs for older Americans who are obese but do not have diabetes or heart disease.
Under a rule proposed by the U.S. Department of Health and Human Services, the Biden administration estimates that 3.4 million Americans on Medicare would be eligible for the drugs beginning in 2026, which can retail for over $1,000 a month. While some states currently cover obesity drugs for Medicaid enrollees, most do not. The proposed rule would make an estimated 4 million Medicaid recipients eligible for coverage.
Centers for Medicare & Medicaid officials estimated the anti-obesity drugs would cost Medicare and Medicaid about $40 billion over a decade. States would be expected to pay for about $3.8 billion of that total amount for Medicaid enrollees.
CMS officials acknowledged the proposed rule, which requires a lengthy process of collecting public comments and review, would need to be finalized after President-elect Donald Trump takes office next year. Trump has nominated Robert F. Kennedy Jr. to lead HHS, and Kennedy has said in media interviews that he wants Americans to focus on their diets rather than relying on medication.
Americans have struggled to afford the blockbuster class of weight loss medications called GLP-1, or glucagon-like peptide-1, receptor agonists. The drugs were first used to treat diabetes but drugmakers have introduced newer brands such as Wegogy and Zepbound approved for people with obesity.
"This is a tremendous positive step on the part of the White House and CMS to ensure that Medicaid and Medicare enrollees, who often disproportionately face the brunt of obesity, will receive coverage for anti-obesity medications," said Dr. Fatima Cody Stanford, an obesity medicine specialist at Massachusetts General Hospital and Harvard Medical School in Boston.
The drugs are expensive. For example, the list price for Novo Nordisk's weight loss drug Wegovy is $1,349 monthly. By comparison, the drug sells for $186 in Denmark, $140 in Germany, and $92 in the United Kingdom, according to documents presented during a Senate Committee on Health, Education, Labor and Pensions hearing in September.
During the September hearing, senators grilled the top executive of Novo Nordisk about why the Danish company charges Americans far more for Wegovy and the diabetes drug Ozempic than it does patients in Europe.
Novo Nordisk's CEO said U.S. prices are influenced by health insurance companies and drug-pricing middlemen called pharmacy benefit managers. He added that coupons and other discounts significantly reduce out-of-pocket costs for most people.
Employers who provide health insurance benefits for workers and private insurance companies largely cover diabetes drugs such as Ozempic.
Ozempic and Wegovy, from Novo Nordisk, are based on the GLP-1 drug semaglutide, though Wegovy is typically given at a higher dose. Zepbound and the diabetes drug Mounjaro are both made by Eli Lilly and are based on the drug tirzepatide, which is both a GLP-1 and has a second mode of action that appears to make them even more effective for weight loss.
A survey shared last week by the benefits consultant Mercer said 44% of all large employers this year covered GLP-1 drugs for obesity, up from 41% last year.
The Biden administration officials did not immediately say how much it would cost taxpayers to extend coverage of the weight loss medication to millions of Americans. Biden administration officials said obesity drug coverage would slash out-of-pocket costs for Medicare enrollees seeking these prescription drugs by up to 95%.
Earlier this year, North Carolina's health insurance program for state employees discontinued coverage for the prescription weight loss medications Wegovy and Saxenda because of high costs.
In addition to covering anti-obesity drugs, the Biden administration's proposed rule aims to crack down on insurers' use of prior authorizations to deny care for Americans enrolled in private Medicare plans.
CMS officials said private Medicare plans overturn 80% of denials when those claims are appealed. However, less than 4% of rejected claims are appealed – an indication enrollees might not contest inappropriate denials.
Meena Seshamani, CMS Deputy Administrator and Director of the Center for Medicare said this highlights how people are denied care for which they qualify.
"What this means is that more patients could likely have access to care if inappropriate prior authorization did not block it," she said.
Contributing: Karen Weintraub