GLP-1 drugs, like Wegovy, Ozempic and Zepbound, are helping millions of Americans lose weight. At the same time, because they are so expensive, they are driving up the cost of everyone’s health insurance premiums. Luca Maini, a health care policy professor at Harvard Medical School explains for the Harvard Gazette that 30 percent of the increase in health insurance premiums this year is attributable to the cost of GLP-1s.
Today, about 12 percent of Americans are taking a GLP-1 weight-loss drug. And, that number could increase over time as about 25 percent of Americans could benefit from these drugs. Because these drugs are brand-name and there is no generic alternative, manufacturers have virtual monopoly price-setting power over them, so they cost a lot. The new Wegovy pill costs $150 a month.
Medicare does not yet cover GLP-1 for people who need it exclusively for weight loss. Medicare is launching a pilot program in 2027 that will permit Part D insurers to cover these drugs for weight loss. If Part D insurers choose to cover GLP-1s for weight-loss, both Medicare spending and Medicare Part D prescription drug premiums are expected to increase substantially.
According to Maini, it is “unprecedented” that so many Americans–one in four–could benefit from a drug and that the drug is high-cost, with no generic alternative. Statins are the only other drugs that are used as widely as the GLP-1s, and they are available as generics. The hepatitis C drug also took a financial toll on the health care system, but it is not as widely needed as the GLP-1s and was rationed.
Maini believes that the GLP-1s shouldn’t cause insurers to raise premiums further by a significant amount. They are meant to be taken over the long-term. But, he thinks that because they have some challenging side effects, people might stop taking them, which could bring down insurance premiums a bit. Moreover, the GLP-1s could help improve other chronic conditions such as heart health, which in turn could reduce health care spending and rein in premiums.
Of note, in five years time, the GLP-1 drugs will lose their patents and generic alternatives will be available, reducing their costs substantially.
Here’s more from Just Care:
- Will Medicare continue negotiating drug prices?
- Will FDA approval of Wegovy to treat heart conditions mean more people with Medicare can fill a weight-loss prescription?
- Medicare will cover weight-loss drugs in 2027
- 2026: Medicare drug coverage and costs
- Medicare Part D drug coverage stunts are rampant
