GLP-1 insurance coverage faces budget barrier despite drug value
University of Mississippi researchers say Ozempic, Wegovy and Zepbound can be cost-effective while still straining insurer budgets.
By Lucas Ferreira · Science & Environment Writer
3 min read
GLP-1 insurance coverage remains limited for many patients even as independent reviewers find drugs such as Ozempic, Wegovy and Zepbound can be worth their price. University of Mississippi researchers say the central problem is scale: millions of people could qualify, and insurers would face large new costs if coverage became broad.
An analysis by the Institute for Clinical and Economic Review, a nonprofit group that evaluates medical treatments, found GLP-1 drugs to be cost-effective, according to the University of Mississippi. That means the health gains tied to the drugs can justify their current prices under standard value measures.
Sujith Ramachandran, an associate professor of pharmacy administration at the University of Mississippi, wrote about the issue with colleagues in the Journal of Managed Care and Specialty Pharmacy. He said the ICER finding supports the drugs’ value to society, while also showing why insurers worry about the total bill.
Why do insurers limit GLP-1 insurance coverage?
A drug can be cost-effective and still be difficult for an insurance plan to afford. Cost-effectiveness weighs health benefits against price; affordability asks whether a payer can cover the treatment for all likely users within its budget.
The eligible population is large. The Centers for Disease Control and Prevention says about 40% of Americans have obesity, and University of Mississippi researchers said even limited uptake among that group could create billions of dollars in added insurance spending.
Ramachandran said ICER uses an annual budget impact threshold of $821 million to flag when a drug’s adoption could strain spending. GLP-1 drugs exceed that threshold even when projected use is lower, according to the University of Mississippi.
Long-term savings are still uncertain
Backers of wider coverage argue that treating obesity could reduce later costs tied to cardiovascular, liver and kidney conditions. Ramachandran said current data have not yet shown that those expected savings materialize.
Persistence is part of the problem. According to the University of Mississippi, many patients discontinue GLP-1 drugs within a year because of cost, gastrointestinal side effects or because they reach a target weight. After stopping, many regain some or all of the weight they lost.
Ramachandran said insurers are more likely to see lasting financial benefit if patients maintain weight loss and keep the related health risks lower. The University of Mississippi said that may require coverage longer than the six-month or one-year limits used by many plans.
What support do GLP-1 patients need?
Ramachandran said clinical trials did not test GLP-1 drugs against doing nothing. They compared lifestyle management with lifestyle management plus the medication.
That distinction matters for coverage design, according to the researchers. Patients may need access to nutrition counseling, exercise support and other services alongside a weekly medication if insurers want results closer to those seen in trials.
Researchers warn against compounded alternatives
When brand-name GLP-1 drugs are not covered, patients may look to lower-cost compounded versions. Liang-Yuan Lin, a University of Mississippi doctoral candidate in pharmacy administration who studies compounded drug pharmacies, said those products do not go through the same rigorous review as drugs approved by the U.S. Food and Drug Administration.
Lin said the FDA has issued warning letters related to compounded GLP-1 products and has found websites selling unapproved ingredients or incorrect ingredients. She said patients may also be unable to verify where listed ingredients came from or how they were handled.
Lin and Ramachandran said patients should talk with a physician before starting a GLP-1 drug and should remain under medical supervision while using one. A doctor can monitor side effects, check safety concerns and help confirm whether the medication is FDA-approved.
Ramachandran said coverage appears to be expanding for some conditions, including diabetes, sleep apnea, extremely high body mass index or combinations of those factors. For other uses, he said insurance access is likely to become tighter.
This story draws on original reporting from ScienceDaily.