More than 40% of American adults are obese, costing the health-care system $173 billion a year. Related conditions including heart disease, stroke, type 2 diabetes and some cancers are among the leading causes of preventable death in the U.S. But while drugmakers have developed astonishingly effective medications for weight loss, they’re not covered by Medicare.
Should the government help foot the bill?
When Medicare’s prescription-drug program was created two decades ago, it was prohibited by law from covering weight-loss drugs, which were seen as largely cosmetic. Congress also worried about health risks after several popular diet pills were taken off the market. The obesity narrative has shifted in recent years to reduce stigma, and newer drugs appear to be safer.
The American Medical Association recognized obesity as a disease in 2013.
One result is that pressure is now mounting on Congress to allow Medicare to cover weight-loss drugs, such as Novo Nordisk A/S’s Wegovy. Expanding coverage would open up a huge, lucrative market that some analysts estimate will reach $150 billion a year globally, rivaling cancer treatments. Even at $900 or more a month out of pocket, demand has been surging — to the extent that Novo recently paused its ads for Wegovy to alleviate potential shortages.
That high price has become a sticking point for insurers. Weight-loss drugs are lifelong medications. And even as more competitors enter the market, manufacturers have little incentive to reduce prices. Market share is guarded by intermediaries who get bigger fees for more expensive branded drugs — perversely driving prices up. A typical employer’s drug spending could rise by more than 50% if just half of eligible employees took Wegovy, according to one estimate. For Medicare, covering semaglutide for every eligible beneficiary could cost $268 billion a year, almost doubling the total Part D budget and surpassing total excess health-care spending associated with obesity for people of all ages.
The potential for wider savings remains unclear. It’s possible that private insurers and employers will bear the brunt of costs — thereby raising premiums — while Medicare ultimately benefits from lower spending on other obesity-related conditions. A second challenge is the lack of research on long-term health effects, particularly for older adults.
Further study is clearly needed, and measures that encourage healthy eating and exercise should remain core to obesity prevention. But given the scale of potential health benefits, some coverage is a good idea. Lower prices, meanwhile, may not be far off: Semaglutide should be eligible for Medicare’s drug price negotiations, which would take effect by 2027. An oral version of the drug, which has delivered promising results, could also be cheaper to produce than the current injectable.
A prudent first step, then, would be offering coverage to a subset of Medicare beneficiaries — for example, adopting qualifications similar to those for bariatric surgery.
While the current high costs and unknown long-term health effects are good reason to proceed with care, the potential for life-changing treatment of a deadly disease should be welcomed as a significant milestone.
Bloomberg Opinion/Tribune News Service
