Another provision would subject weight-loss drugs to the new law’s inflation rebate that aims to limit annual increases in drug prices. At the earliest, a negotiated price for semaglutide, for example, would not be available before 2027 (based on FDA approval in late 2017) and not before 2031 for tirzepatide (based on FDA approval in 2022). If covered by Medicare, weight loss drugs could be among the limited number of drugs that will be subject to Medicare’s new drug price negotiation authority, but not for several years. The Inflation Reduction Act of 2022 could help lessen the cost impact of weight loss drugs on Medicare and Part D enrollee out-of-pocket spending. Without Medicare coverage, Black beneficiaries may be least able to afford these new drugs, given their substantially lower incomes and assets than White beneficiaries. Moreover, the rate of obesity is highest among Black Medicare beneficiaries compared to beneficiaries in other racial and ethnic groups (Figure 1). The annual cost of Wegovy is unaffordable for many Medicare beneficiaries. Maintaining the status quo, however, could raise both access and equity concerns, given the current price. Of note, these estimates do not account for potential reductions in Medicare spending that could occur if weight loss drugs reduce medical spending associated with other diseases, such as heart disease. For context, total annual Part D spending in 2021 was $98 billion. Higher take-up rates would mean higher Medicare spending. According to a recent study, if 10% of Medicare beneficiaries with obesity use Wegovy, the annual cost to Medicare could be $13.6 billion (based on a 19% obesity rate from traditional Medicare diagnoses in 2021) to $26.8 billion (based on a 41.5% obesity rate from survey data for adults ages 60 and older). Wegovy, for example, has an annual estimated net price of $13,600. Lifting the current law prohibition on coverage of weight-loss drugs would come at a cost to Medicare, given the high price and expected demand. So far, a similar bill has not been introduced in the current Congress. 596), that would authorize Part D coverage of medications when used for the treatment of obesity or weight loss management in overweight individuals with related comorbidities. A bipartisan group of lawmakers proposed legislation in the 117 th Congress, the Treat and Reduce Obesity Act ( H.R. This push for expanded coverage under Medicare and other insurance plans is taking place despite some uncertainty about the risks associated with their use. With evidence that GLP-1s lead to significant weight loss and may offer additional health benefits to people with medical conditions exacerbated by excess weight, manufacturers of these drugs and other stakeholders are pushing for a change in law to allow coverage under Medicare. The 2003 law that established the Medicare Part D prescription drug benefit explicitly prohibits Part D plans from covering drugs used for weight loss, along with some other types of drugs, including agents used for cosmetic purposes or hair growth, fertility drugs, and drugs prescribed to treat sexual or erectile dysfunction. Medicare coverage of obesity services and treatments currently includes obesity screening, behavioral counseling, and bariatric surgery, but not drugs that are prescribed for weight loss. In this piece, we discuss Medicare coverage of obesity treatments, the potential cost implications if Medicare covers anti-obesity drugs, and how the Inflation Reduction Act could potentially address these cost concerns. But they are also expensive, and not covered by Medicare when used for weight loss. Initially approved to treat type 2 diabetes, these drugs, known as GLP-1 (glucagon-like peptide-1) agonists, including Novo Nordisk’s Ozempic and Wegovy (semaglutide) and Eli Lilly’s Mounjaro (tirzepatide), are also highly effective weight loss agents. A relatively new class of medications is generating excitement in the medical community and among people with obesity and others who struggle to lose weight.
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