Gina Kolata reports for The New York Times that the cost of weight-loss drugs is not what it seems. People must take them throughout their lives, and weight-loss drugs have list prices of as much as $1,300 every four weeks. Ozempic, Wegovy and drugs like them could literally mean a huge increase in people’s health insurance premiums.
One epidemiologist projects that if prices for these weight-loss drugs are not controlled, they could increase health care spending by 50 percent! What’s interesting is that it is not only the drug manufacturers that are raking in the profits from these drugs. The health insurance companies and pharmacy benefit managers are profiting wildly from them as well.
The weight-loss drug manufacturers pump up the list price of the drug so that they can then give a major rebate to the pharmacy benefit managers and insurers as a financial incentive to promote and cover them. The insurers and PBMs pocket these rebates or most of the rebates rather than pass them along to consumers.
Net prices for the weight-loss drugs are, according to the conservative American Enterprise Institute, AEI, much less than the list prices. The AEI believes that the net price for Ozempic is just $300, $650 less than its list price. Similarly, AEI believes the net price for Wegovy is $700 or $650 less than its list price.
The weight-loss drugs are unaffordable to many Americans because they cannot afford the copays even with insurance, they have no health insurance, or their insurance does not cover them. Medicare does not cover weight-loss drugs for weight-loss. However, it does cover the drugs for people with diabetes. Medicaid rarely covers the drugs.
Novo Nordisk, a Danish company, expects to generate $11 billion in revenue this year from Ozempic and another $4 billion from Wegovy. Some might argue that the price for these drugs is fair because treating obesity, with its risk of diabetes, kidney failure, heart attacks and strokes, can be very expensive. No other wealthy country pays prices anywhere near as high as Americans.
Here’s more from Just Care:
- Why doesn’t Medicare cover Ozempic and other drugs for weight loss?
- Even with Medicare, you’ll spend a lot on health care
- 2024: Medicare Part D coverage and costs
- 2023: Five things to think about when choosing between traditional Medicare and a Medicare Advantage plan
- Case study: Costco saves one couple hundreds of dollars over Medicare Part D
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