New medications that treat obesity and manage weight have sparked growing interest in the United States, where obesity rates are at an estimated 41%. If efforts are successful to expand Medicare Part D to cover these drugs, premiums could soar, according to economists with Vanderbilt University and the University of Chicago.
New anti-obesity medications have resulted in weight loss from 15% to 20% in clinical trials. But their prices can be 20 times higher than older drugs, and they may require lifetime use, the authors reported.
“The budgetary effects of covering anti-obesity medications under Medicare Part D are likely to be substantial,” they wrote in the New England Journal of Medicine.
U.S. Medicare beneficiaries aged 60 years and older with 10% uptake could send total annual Part D spending to $1.32 billion for generic versions of phentermine and topiramate, or $27 billion for semaglutide (Wegovy), a brand-name drug, the authors reported.
This would amount to 20% of net total 2019 Part D spending by beneficiaries and the Medicare program, they estimated.
Questions about the drugs’ cost-effectiveness are another concern, the authors added. Even with discounted pricing, “the budgetary effects for Medicare could be substantial,” they wrote. And for older adults, health risks associated with the drugs may be higher than those faced by younger adults, they noted.
“The burden of obesity and obesity-related conditions is unquestionably high, but the value of Medicare coverage of anti-obesity medications remains unclear,” Leech and colleagues wrote. “… To the extent that other payers follow Medicare’s lead, such costs could be felt throughout the U.S. healthcare system.”
Efforts to expand coverage
Medicare is prohibited from covering weight loss prescriptions, although the same drugs may be covered for other purposes. The Treat and Reduce Obesity Act, introduced in March 2021, aims to expand Part D coverage for drugs for obesity and weight management. But Congress and Medicare should act cautiously on this matter, the authors wrote.
Considering the high level of public interest and uncertainty about costs, long-term benefits and safety, “it would be prudent for Congress and the Centers for Medicare & Medicaid Services to carefully consider the potential trade-offs associated with anti-obesity-medication coverage and use for Medicare beneficiaries,” the authors concluded.
Shades of Aduhelm saga?
Similar questions arose after the Alzheimer’s disease drug aducanumab (Aduhelm) was approved by the Food and Drug Administration in June 2021.
Aduhelm was the first new drug approved to treat Alzheimer’s in two decades and elicited much excitement about its promise in the patient-provider community. But estimates based on the drug’s initial price raised Medicare’s monthly Part B premium by about $22 to $170.10. Drugmaker Biogen subsequently cut Aduhelm’s original $56,000 cost per patient in half, but a subsequent premium reduction could not be made until 2023.
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